New £300 million plan for Sullom Voe terminal

Shetland is set for a new oil boom at Sullom Voe with improvements costing up to £300 million which could keep the terminal open another 30 years or more.

Around 200 extra workers will have to be drafted in for a list of projects estimated to last up to five years.

The BP plan has yet to get final sanction from the 28 oil companies which own the terminal. But if it goes ahead as expected it would ready Sullom Voe for staying open until possibly 2050 or beyond. At one time it was expected to close by 2000.

Terminal manager Arthur Spence said yesterday: “The future is starting to look a lot brighter for Sullom Voe and the terminal has to be here for many years to come.”

The new wave of activity is mainly to get ready for increased oil from West of Shetland. It means there could be well over 1,000 workers engaged between Sullom Voe and Total’s Shetland Gas Plant in the peak year of activity, expected to be 2014.

At the moment BP has about 200 employees while 400 contractor workers are on site running the power station, main­taining jetties and refurbishing oil tanks.

Mr Spence revealed BP was looking at building a workers’ camp or chartering a floating accommodation barge or a combination of both to house extra people over a three-to-five year period.

The work programme includes: ● an overhaul of the terminal’s ageing plant and pipework; ● construction of a large gas-cleaning plant; ● a temporary two-storey office block at Sella Ness; ● completion of the Project Aurora gas plant; ● refurbishment of the power station by owners Fortum; ● refurbishment of 16 giant oil storage tanks and removal of decommissioned plant.

The proposed projects were confirmed this week by Mr Spence.  He told The Shetland Times: “To me, it’s a very important time for Sullom Voe. We’re on the decline east of Shetland but west of Shetland is picking up and so we’re planning this major upgrade of the facility.”
However, he remained cautious about making promises.

“We’re still in very early stages of this – understanding what we need to do – and we haven’t got final partner approval yet.”

The terminal has been receiving oil for 34 years but is a shadow of its former self. Its 1980s heyday saw up to 1.6 million barrels of oil a day pumping through the Ninian and Brent pipeline systems.

These days only about 150,000 barrels a day come from the Northern North Sea, east of Shetland, while Schiehallion and Clair in the West of Shetland sector yield around 100,000 barrels a day.

The terminal only produced 9.2 million tonnes of oil last year but since its opening it had seen 1.07 billion tonnes – one-third of the UK’s entire offshore oil production.

There are encouraging signs West of Shetland with a wave of new exploration getting under way following tax changes for oil companies.

BP and other companies at Sullom Voe have been sizing up the future and gauging what needs to be done to keep existing business and attract more.

The big prize on the horizon at the moment is the Clair Ridge development involving two new platforms.

It is already in the bag for the terminal with the oil to come through the existing pipe to Sullom Voe from late 2016. It could last at least 25 years, taking the terminal into the 2040s.