Oil giants at loggerheads over Laggan-Tormore gas plant works

Disputes between Sullom Voe terminal operators BP and its new neighbours Total have seen the French company make major changes to its Laggan-Tormore gas plant at massive extra cost.

The unexpected difficulties mean Total will have to build its own 21.2 MegaWatt power station for its £500,000 million gas plant after failing to reach agreement about buying electricity from the terminal power station run by Fortum. A planning application to Shetland Islands Council is being finalised.

Total has also had to shift its offshore gas pipeline from its intended landfall point at the head of Orka Voe. It is understood the two oil companies failed to agree legal liability for potential environmental problems arising from laying pipes in an area which was once sea but was filled in with all manner of materials when Sullom Voe was built.

Instead Total’s pipes are now being laid up and down the  hillside to the east of the voe, despite possible blockage problems for the flow of gas and the almost-freezing liquid condensate that comes with it.

In a third example of agreeing to disagree at the last minute, Total is to build its own effluent water-cleaning and discharge system after the wheels came off its plan to connect to BP’s existing system.

There is peace and co-operation between the oil giants on at least one point with Total still planning to sell BP its oil-like condensate which will be piped across to the rival terminal for storage in the crude oil tanks.

The unexpected hurdles have not dented Total’s enthusiasm and its momentum in pursuing its Shetland project. The gas plant will bring in vast commercial quantities of west of Shetland gas to process and pipe onwards to the St Fergus gas terminal and into the national gas grid.

The bustling construction site was opened up to the media on Thursday afternoon to coincide with a guided tour and project update requested by councillors from Shetland Islands Council. However, only five elected members turned up on the free bus from the Town Hall: Florence Grains, Jim Henry, Andrew Hughson, Allison Duncan and Allan Wishart.

Currently there are 210 people working in the islands on the project, including Irish, Italian, Dutch, Spanish and French.

Nearly 208,000 working hours have gone in so far, starting with Irish contractors Roadbridge building an impressive highway through peat up to four or five metres deep.

The extracted peat amounts to about 650,000 cubic metres and is being stored in two enormous peat bunkers, each the size of 80 full-size Olympic swimming pools.

One of the stores is now full and the other close to capacity. The intention is to preserve the peat there until the gas plant becomes redundant and the site reinstated to wild hillside, preferably without massive loss of carbon dioxide pollution into the atmosphere.

The pipe-laying ship Audacia is currently operating in Yell Sound with the first 18-inch concrete-coated gas pipe to Laggan-Tormore, which will go as far as 90 miles offshore. It is designed to withstand fishing boat trawls with having to be buried.

The activity in Yell Sound has to be finished by 15^th June for the seal-pupping season. The company Allseas’ work on laying the second pipe will begin in September. A third eight-inch pipe, which will be buried, will carry an anti-freeze-type liquid to stop the big pipes bunging up. A two-inch pipe attached to it will help operators at the gas plant control the subsea manifolds offshore.

The last earthworks is due to be completed in July then building work on the gas plant will get under way under the management of Petrofac, which got access this month to start making preparations. The company has pledged to interview every unemployed person in Shetland with a  view to offering them work.

Across at Sella Ness the so-called pioneer camp is due to be ready by 18^th May to house the 75 people working for Malthus which is building the multi-coloured accommodation block nearby with beds for up to 848 people.

They will be living in relative luxury as work camps go with a shop, library, IT room, restaurant, gym, bar and football pitch . The first of those beds is meant to be available by 19^th July and the last by the end of October.

Currently the workforce is billeted in hotels, bed and breakfasts and private rented houses all over the Mainland. Each week, as part of a zero-tolerance approach, several site employees are selected at random for testing to see if they are under the influence of drink or drugs at work.

Total’s problems with its oil industry neighbours go back to the start of the project when BP turned down its request to use the existing terminal’s access road, again requiring the newcomer to obtain more land and build its own 1.5 mile road over the hill to its site, east of BP’s sprawling oil and gas complex.

The power station that is now going to have to be built will be the most expensive unforseen cost for Total. Four 5.3MW gas turbines, fitted with heat recovery systems, will power the new terminal and process and compress the gas flowing in from offshore. It means Shetland will have three fossil fuel-burning power stations within a 30-mile radius, further worsening its already dismal carbon footprint.

Total’s engineering interface manager Gawaine Appleby told the visiting politicans and media on Thursday the problem related to difficulties getting long-term agreement on the cost and availability of power from Sullom Voe’s station, including how vulnerable Total would be to blackouts if it was not high enough up the chain to avoid getting cut off first.

He said there would be spare generating capacity at Total’s power station but at present there is no plan to sell excess power on. The 100MW-rated power station in Sullom Voe sells power to Scottish and Southern for the Shetland grid.

Mr Appleby said the lack of agreements with BP meant Total was losing out on the “synergies” it hoped to achieve in its gas plant project and instead has had to come up with its own “stand alone strategy”.

He revealed that Total is also no longer going to sell BP its low pressure gas from Laggan-Tormore. It will be recompressed and put into its own gas export system.

He joked: “They are our new neighbours and we’re getting on very well!”

A full feature on the Total plant can be read in next Friday’s print edition of The Shetland Times.