BP accommodation contract continues despite £500 million project being dropped

Shetland FM is continuing its three-year accommodation contract with BP, despite the oil giant deciding to drop plans for a £500 million gas sweetening plant.

The oil giant announced last week that it will “not now proceed” with the project.

It would have brought three years’ work for about 500 workers with 33 full-time posts when fully operational.

The firm said it remains supportive of Sullom Voe Terminal, however due to the business climate and “revised west of Shetland sour gas production modelling work” partners had decided there was a more cost effective solution than the new plant.

BP said it will focus on enhancing and possibly expanding the gas sweetening capability of the existing SVT site. However, it said this would not mean more jobs

In March Shetland FM won a new three-year contract from BP to provide accommodation for rotational and shift staff and some contractors. Under the deal the company, which took control of the Sella Ness accommodation site in February 2015, will provide dinner, bed and breakfast for BP staff and contractors.

Shetland FM executive chairman Frank Strang said the news would not impact on the three-year BP deal.

On the decision to pull the gas sweetening plant Mr Strang said: “We have been in discussions with BP and Petrofac for quite a while about accommodating the workers on the gas sweetening plant, but we have known for a while, one it was going to stall and two, they were looking to other alternatives.

“We had basically taken out of the project equation the project numbers until such a time as they were confirmed or otherwise.

“So yes we had planned for it, and yes we are not surprised, but he have got enough contracted business to keep us going for the next couple of years.”

Mr Strang said that “reading between the lines” while the gas plant was not going ahead “something is going to happen in the requirement for the Shetland supply chain”.

Last week Shetland MSP Tavish Scott wanted to know if UK regulator the Oil and Gas Authority had looked at the decision.

OGA spokeswoman Leona Minellas said: “Sullom Voe is a critical piece of infrastructure and securing a viable long term future for the terminal is an immediate priority for the Oil and Gas Authority.

“We are continuing to work with all owners and users to ensure appropriate investment to support ongoing oil and gas production.”