Shetland recommended as location for ultra-deep water decommissioning port

Lerwick - Image credit: swifant via Wikimedia Commons

Shetland looks set to get more oil and gas decommissioning work after it has been identified as the ideal location for the UK’s first ultra-deep water port.

Lerwick’s Dales Voe was chosen a UK-wide feasibility study by Ernst and Young as the most cost-effective location for decommissioning work such as dismantling oil rigs.

The news came as Veolia-Peterson also announced it had signed a contract to provide ‘dismantlement and disposal’ services for a significant decommissioning project at Dales Voe.

The creation of an ultra-deep water port was one of the Scottish Government’s commitments in this year’s programme for government.

It is expected such a port would open access to new market areas, act as a hub for other locations and provide business to the Scottish supply chain.

Energy Minister Paul Wheelhouse revealed the chosen location during a visit to Shetland for an Oil & Gas Authority roundtable event.

He said: “This year’s Programme for Government reaffirms the Scottish Government’s commitment to establishing an ultra-deep water port in Scotland.

“Following an extensive feasibility study, which explored a number of UK-wide options, including a number of Scottish sites, Dales Voe was identified as the optimal location with potential for a deep water facility.

“I believe investment in a deep water port will unlock the potential for Scotland to secure the largest decommissioning contracts that require the largest heavy lift vessels currently in operation in the North Sea.

“A deep water port in Scotland will bring significant benefits not only for a single location, but as a key part of an integrated and networked Scotland wide decommissioning offering, with wider opportunities realised through the supply chain.

“We will continue to engage with industry to measure expected demand and to ensure that investment in a deep water facility will bring the widest possible economic benefit and most substantive boost to the decommissioning supply chain in Scotland.”

Gunther Newcombe, Director of Operations at the Oil and Gas Authority, said: “The OGA is working with operators to develop area plans, to the east and west of Shetland, to maximise value, and welcomes all parties contributing to build a regional vision which will maximize the value of current developments and stimulate future opportunities.

“Shetland could play an important role in this vision as well as becoming a decommissioning centre of expertise”.

The news has been welcomed by Northern Isles politicians.

In a joint statement, Tavish Scott, MSP for Shetland, and Alistair Carmichael, MP for Orkney and Shetland, said: “We warmly welcome this proposal which will cement Shetland’s position as the decommissioning capital of the UK.

“The islands location makes Shetland the logical place for further decommissioning work from the northern North Sea and the ultra-deep water proposal should get support.

“With the dual capacity to handle projects quayside and in water Shetland can maximise the opportunities presented by decommissioning in the future.

“We congratulate all of the partners for their continuing work, in particular, Lerwick Port Authority, Peterson and Veolia.”