News / Decommissioning cash a major boon for harbour
INVESTMENTS of more than £20 million into decommissioning facilities at Lerwick Harbour were announced on Wednesday.
Lerwick Port Authority will spend £12.5 million to lengthen the quay at Dales Voe South to 130 metres and to strengthen its load bearing capability.
Meanwhile energy logistics firm Peterson is set to invest £8.64 million to expand its existing decommissioning capability at the port.
The firm’s expansion plans are expected to create as many as 67 new and highly skilled jobs, while the work on the quay infrastructure will safeguard a further 50 jobs at the port.
LPA chief executive Sandra Laurenson said the quay extension project replaces earlier plans to develop the Dales Voe pier into a major decommissioning base with Norwegian consortium AF Gruppen, which was announced in May 2012.
She said: “We are very busy at the moment with offshore construction building new oil and gas fields, but looking ahead it is difficult to see beyond 2017/18.
“The Schiehallion redevelopment will come to an end and the Solan field is being build at the moment.
“There are other operators we are talking to at the moment in the northern North Sea and West of Shetland, but to provide continuity of work for the port we need to look beyond these construction projects.
“Perhaps the next big thing might be decommissioning and we need to make sure that we are in the best position to be able to bid for that work.”
Laurenson added that the government had been keen to “future-proof” the LPA investment by ensuring it is strong enough to be used as a base for decommissioning.
Supporting both projects with public money, the Scottish Government said the investments would help secure Shetland its place as a global decommissioning centre of excellence.
Finance secretary John Swinney said: “The Scottish Government is committed to investing in the necessary infrastructure to support decommissioning activity in Scotland.
“This is demonstrated through the public support provided to these two projects of strategic importance, enabling Scotland to compete with Norway in winning contracts for lucrative decommissioning work.”
Both projects are supported by the Scottish Government and economic development agency Highlands and Islands Enterprise (HIE).
The LPA will receive almost £2.4 million in financial support (£870,584 from HIE, £324,416 from the European Regional Development Fund (ERDF), and £1.2 million from the Scottish Government.
Peterson has been awarded £628,000 through HIE plus a further £1.1m of “regional selective assistance” from Scottish Enterprise.
Peterson Offshore director Murdo MacIver added: “This support shall secure and enhance Shetland’s position to become a leading hub for decommissioning works in the Northern North Sea.
“Along with our partner Veolia, we already have valuable experience in the completion of a number of decommissioning projects and we believe this experience, matched with greater facilities will earn Shetland the position as a world leader.”
The North Sea oil and gas decommissioning industry is estimated to be worth between £30 billion and £40 billion in the coming decades.
Laurenson said the port authority was confident to be able to award the quay extension contract early in 2015 with a view to complete the project in spring 2016.
The LPA is also expected to award the contract for building the new L-shaped Holmsgarth North jetty next month.
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