Council / SIC committed to running port of Sullom Voe ‘financially sustainably’
SHETLAND Islands Council has denied it may have to subsidise the port of Sullom Voe in the future rather than drawing large surpluses to fund council services.
In an article written for Shetland News last month, former councillor Jonathan Wills said the continuing downturn of tanker traffic at the port might soon result in a situation where the council’s harbour account could be “subsidising the oil companies to use our harbour.”
He wrote: “The original idea was that the owners of the Sullom Voe Terminal would take it to pieces, take it away and reinstate the land when they’d finished with it. I seem to remember a planning condition to that effect.
“In the meantime the search continues, urgently, to find alternative industries”, he wrote, suggesting that “if this search does not produce results before the council’s harbour goes into the red, something else is likely to happen and it would not be pleasant.”
Neither the council’s chief executive Maggie Sandison nor the chair of the council’s harbour board Robert Thomson agrees with his analysis though.
While there is no dispute that the downturn of oil activity at Sullom Voe Terminal has an impact on council finances, its conclusions and the work underway to mitigate the consequences are however viewed differently.
Thomson said the council was committed to running the port sustainably, while Sandison said the SIC was in discussions with the oil industry but could not give any details.
“The ongoing decline in the volume of oil passing through Sullom Voe Terminal is not something new,” Thomson said.
“It is a well-established trend that has been ongoing for decades. Longevity of operations has been mitigated in part by new field developments and field life extensions, that have supported safe and financially sustainable operations.
“This approach secures an income for the council, supports hundreds of local jobs and preserves an export route for connected oil fields.
“Looking ahead, several new developments are under consideration which could help support terminal operations into the future. These include initiatives such as carbon storage and e-fuels.
“Whilst these developments are still some years away, there is cautious optimism that at least some could become revenue generating for the port.”
The North Isles councillor added that the national policy of not issuing new oil and gas licences was certainly contributing to the decline of traffic.
“However, from a personal perspective, it is disappointing that national governments remain reluctant to support further exploration of oil developments, whether in existing or new fields,” he told Shetland News.
“This support could enhance the UK’s energy security and potentially increase production through Sullom Voe Terminal.
“While the need for an energy transition is accepted, this takes time. While we still need oil should we not prioritise local production, rather than transport it halfway around the planet?
Sandison said: “Whilst there is a clear impact on SIC income from the downturn in oil activity, I don’t agree with the conclusions that Dr Wills has drawn.
“Our discussions with the industry are subject to confidentiality agreements and I am not at liberty to discuss this further at this stage.”
The SIC chief executive told Shetland News in September that the harbour “will never operate at a loss”.
Sandison said they have been “repeatedly clear” with the oil industry that activities at the harbour, which is owned and operated by the council, will not continue if the SIC is not making a profit from it.
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