Talks are continuing between oil company Total and Shetland Islands Council to try to reach a deal to allow the planned £500 million gas terminal to be built on community-owned land next to Sullom Voe.
An agreement on the terms of a lease had been expected by last Friday for councillors to sanction on Tuesday and a UK energy minister, Lord Hunt, was due to be present for the formal signing in Shetland on Thursday. However, councillors are not satisfied with the terms Total is prepared to agree to and have backed further negotiations.
The council is understood to be seeking not just a set rent but an additional element based on the amount of gas going through the new terminal, linked to gas prices, which would secure at least a tiny percentage of Total’s profits from lucrative west of Shetland gas production.
Although the gas terminal will initially handle production from Total’s Laggan-Tormore field, ultimately it is expected to process a far larger volume of gas as other promising west of Shetland gas fields come on stream.
Councillors met in private with their advisers for three hours on Tuesday to consider details of the recent negotiations. In a brief statement issued the following morning convener Sandy Cluness said councillors had agreed to continue working with Total in the coming days “towards the best outcome that can reasonably be achieved for the Shetland community”.
It is understood that once a deal has been done with Total, the council will seek to sell the site to Shetland Charitable Trust to avoid being penalised by the government for earning income as a landowner. The rent paid by Total would be handed over by the council to the charitable trust to boost community funds. The rest of the proposed gas terminal site and access road is owned by farmers Bryden Nicolson and the Hunter family of Scatsta. The council granted planning permission for the development last month.
At the start of Tuesday’s council meeting, before the public was excluded, there was a terse exchange between Mr Cluness and councillor Jonathan Wills who was unhappy that the report from officials regarding the deal negotiations had not been sent out at least three days in advance.
Dr Wills said he had received the pages only five minutes ago and was not happy discussing the issue until he had read the report properly. He proposed adjourning the meeting for an hour. A visibly angry Mr Cluness proceeded with the motion to exclude the public, saying that there might have to be an adjournment anyway because discussions were still ongoing with Total.
It has emerged that a plan by Total to have a workers’ camp on council land at Sella Ness to house the incoming construction workforce of up to 1,000 people was scrapped because of budget cutbacks of around £300,000 in the overall project.
The camp would have been built by Shetland Charitable Trust’s property company Slap. Instead, Total has decided it will not need special worker accommodation until the second and third years of the construction phase and it has yet to specify whether that will be in the form of a ship, accommodation platform or huts on land.