Schiehallion oil field to shut down for £3 billion redevelopment next month

Sullom Voe Terminal will continue to receive shipments from the Schiehallion oilfield until the middle of next month, despite reports that this week would herald the last delivery from the field ahead of a major overhaul.

BP have said the final load from the much-valued resource 100 miles west of the isles was due to arrive in mid-April, when Schiehallion would shut down for its £3 billion redevelopment.

It could take up to three years for BP to bring its new, highly sophisticated 270-metre floating production, storage and operating vessel (FPSO), to the field to restart production. That vessel is still under development.

Even when it does arrive there is no guarantee that the shipments will be brought to Sullom Voe in the long term, although the vessel will continue to serve the port for an initial period.

A BP spokesman yesterday said the new FPSO was due to export to Sullom Voe in the “initial stages” of production. He insisted no final decisions had been taken on “long-term future export options”.

He said: “We are still assessing the options and until we reach the point of making a decision on a preferred long-term export option then it would be inappropriate to speculate.”

The new vessel has been designed to be capable of processing oil onboard to separate off the high percentage of seawater in Schiehallion oil – a task currently carried out in giant storage tanks at Sullom Voe.

That could prove a worrying development for the port as having no Schiehallion means the council stands to lose 40 per cent of its throughput. Councillors have already agreed to increase harbour charges at Sullom Voe by 30 per cent to help stem the losses.

The news is far removed from Schiehallion’s high output in past times. Once one of the UK’s biggest producing fields, Schiehallion has supplied over 400 million barrels to Shetland since its opening 15 years ago.

But staff at the SIC ports and harbours department say they are not taking the problem lying down. Attention is now turning to BP’s Clair Ridge project, which has 640 million barrels of oil within reach. Oil from that project should start reaching Sullom Voe in 2016.

Harbourmaster Colin Reeves said BP was busy clearing out the last of the oil and water from the 30-year-old FPSO.

He said: “They are basically just cleaning up the vessel prior to it going off service. It’s somewhere between two and three years that they are expecting to get the new FPSO on site. It is being built at the moment.”

Mr Reeves admitted losing Scheihallion would come as a blow to the port, but he regarded the anticipated oil coming from the Clair Ridge as a positive development.

He said: “There are fewer tankers than we’ve had. We do have the possibility of getting Clair Ridge coming in the next couple of years, so it’s not all bad news but there is certainly a dip for the next couple of years.

“We’re hoping it will pick up again after that, and we’re hoping we will get Schiehallion back again once the new FPSO’s on site, but that’s not confirmed yet.

“It’s a fairly damp crude oil they get out of Schiehallion. That’s why it comes to Sullom Voe so the waters can be taken away. They’re hoping the new FPSO will be able to do that, but until they’ve got it on site and tried it no-one really knows.”