Oil giant Total set to win approval for £500 million gas plant at Sullom Voe

Oil company Total is set to get planning approval for its £500 million gas plant at Sullom Voe, helping clear the way for the sanctioning of the £2 billion Laggan/Tormore field development by the company’s executives next month.

If Shetland Islands Council nods the development through its planning board on Wednesday work on building the access road and clearing peat from the site could get under way as soon as April.

In her report planning officer Janet Barclay Smith recommends approval with a string of environmental conditions to deal with concerns about wildlife and the mass of excavated peat which will be kept and reused to reinstate the site once the gas has run out.

However, it emerged on Thursday that Total is resisting an approach from the council to set up a community fund to benefit the people in the Delting area most affected by the noise, dust, workers and traffic during the construction phase.

Councillors have been told that discussions “met some resistance and to date no conclusions have been reached”. The head of planning Iain McDiarmid is seeking permission to pursue the matter.

The report states: “For a development of this scale it would be normal practice for a developer to provide some form of local community benefit, separate from any financial benefits that may be forthcoming from the lease of the land, targeted at the community most affected. It is envisaged that payment from any community fund established would provide financial assistance for any environmental/community projects proposed within the area.”

Up to 500 workers will be needed to build Total’s complex at the height of its construction phase and 60-70 permanent jobs will be created for the expected start-up time of June 2014. The plant operators will remotely control and operate the subsea wells 24 hours a day as well as running and maintaining the plant and flare stack on land.

Total’s project will make Shetland the staging post for gas travelling from future west of Shetland fields to the St Fergus gas terminal near Peterhead before pumping into the national gas grid.

The site chosen for the gas plant is on part-council-owned land to the east of the existing oil terminal, across the Burn of Crooksetter. It will be a separate terminal although it will share the oil terminal’s fire, rescue and medical services. Much of the complex will not be easy to see from outside the terminal although the flare stack will be prominent.

The works are expected to involve digging out 236,000 cubic metres of peat from the hillside, none of which will be removed from site. In what has been described as an innovative approach to peat management, it is to be packed into three large stores at the bottom of the plant site, held in by retaining walls and kept wet. Once the terminal has closed the peat will be laid down again.

The planners have concluded that there is “no absolute certainty” that the peat will be suitable for use in restoring the site and Total is required to do more work on its plan to satisfy the conditions of planning approval.

Ms Barclay Smith states that if the peat is not suitable for reuse it will have to be removed from the site and disposed of either in Shetland or elsewhere and additional peat would have to be imported into the site, possibly with significant impacts.

“The extraction of peat for restoration and the disposal of unusable peat from the site to a location remote from the site will be likely to require planning permission in its own right,” she tells councillors. “It is therefore imperative that the condition of the peat in the peat stores is monitored and if necessary managed to ensure its viability as a material for future reinstatement.”

Peat from digging the access road was to be used alongside it as a drainage “berm” to soak up surface water and for screening off lochs used by birds. But Sepa and Scottish Natural Heritage objected and it will be put in the peat stores instead.

Total intends bringing in 135,000 cubic metres of rock aggregate by sea as well as concrete and all the building materials using the old council-owned construction jetty at Sullom Voe.

The oil company is already an associate member of the Shetland Oil Terminal Environmental Advisory Group (Soteag) which has monitored environmental effects of Sullom Voe since before it started production. The company is to take full membership and ensure that its terminal is monitored in the same way.

The Laggan/Tormore fields have the potential to pump the gas equivalent of 100,000 barrels a day through Sullom Voe from 2013, which is around one-third of current oil throughput at the terminal. Production is expected to last 15-18 years.

Pipes from 87 miles offshore will come down Yell Sound and ashore at Orka Voe. Once processed, the gas will go through a new overland pipeline to Firth and out the voe, where the Brent oil pipeline comes ashore from the North Sea. It will join into the Frigg pipeline 145 miles offshore to go to St Fergus.

Although the gas would not generate any tanker traffic the light oil condensate removed in the gas plant would provide the terminal with an extra 10,000-15,000 barrels a day to store and ship out.

Last month the UK government agreed to offer tax breaks of up to £160 million to companies like Total for exploiting the strategically important gas fields in deep water west of Shetland.

Total has also taken over the Tobermory gas field west of Shetland, which is not yet in production. It intends connecting Tobermory to the Laggan-Tormore pipeline to Sullom Voe.
There are already two pipelines into the terminal from the west – the 22-inch oil pipe from the Clair field and the 20-inch West of Shetland gas pipe from Foinaven, the gas from which is pumped back out into the Magnus field to push more oil from it.