Oil company Total officially marked the start of work on its £2.5 billion Laggan-Tormore gas development today with a peat-cutting ceremony in Shetland by a minister from the new UK coalition government.
The gas pipeline from the west of Shetland fields to a new £500 million gas processing plant at Sullom Voe is expected to encourage the exploitation of other Atlantic frontier fields which hold an estimated 20 per cent of the UK’s remaining oil and gas reserves.
David Mundell, the only Tory MP in Scotland, got to grips with a traditional Shetland tushkar to cast a peat at Firths Voe, where Total’s pipeline will exit Shetland on its way to the St Fergus gas terminal and the UK national gas grid from 2014.
The minister received coaching in his use of the tushkar from Shetland MSP Tavish Scott of the Liberal Democrats, providing the first solid proof in Shetland that the former political enemies can work together in their coalition government.
“Well done minister,” Mr Scott said as Mr Mundell produced a usable peat at the third or fourth attempt. It was stashed in a carrier bag for display in Total’s HQ in Aberdeen along with the specially commissioned tushkar made by Hillswick blacksmith Bruce Wilcock.
The minister joked that the sharp-edged instrument might be useful in London to coax recalcitrant backbenchers into line in the new coalition. Fittingly, the man whose new job it is to do just that – local MP Alistair Carmichael, the deputy chief whip – was looking on from the hillside.
Mr Mundell has visited Shetland on a number of occasions in the past, mainly through his former work with BT. He said he was honoured to be asked to perform the ceremony for Laggan-Tormore. “It’s a very important development not just for Shetland, not just for Scotland but for the United Kingdom.”
The event was meant to be held at the new road into the gas plant site next to Sullom Voe but landowner Bryden Nicolson refused access to government and council representatives due to a dispute about unpaid compensation for culling sheep.
The re-arranged ceremony passed off without incident but afterwards it became known that another landowner, Charlie Laurenson, was unhappy about land at Firth being used without permission. Total had been led to believe the site, close to the road at the head of the voe at Firth, was council-owned or common grazings land.
The area has special significance for the Conservatives, it being the home of former Chancellor Norman Lamont’s ancestors in the appropriately named croft of Loot, a few hundred years from where the peat-cutting ceremony took place.
Afterwards, back in Lerwick, Total staged a £35-a-bottle champagne reception in Shetland Museum followed by lunch in the museum’s celebrated restaurant with speeches by Total’s senior vice-president for North Europe, Patrice de Viviès, and Mr Mundell.
Monsieur Viviès said it had been quite a journey getting to this stage, 20 years after the Laggan gas field was first discovered but proved too small to develop at the time. Now it had moved from an impossibility to an exciting reality – and one which was likely to prompt a new wave of exploration and development.
The invited party of around 30 included local councillors and officials, Lord Lieutenant John Scott and representatives from Lerwick Port Authority and the police and fire services.
Council convener Sandy Cluness welcomed the landmark day for the west of Shetland province. “There is so much gas out there that if they are able to link into this particular project then we could have gas coming for the next 30 or 40 years which would be fantastic for Shetland.”
The council estimates the development will bring around £200 million into the Shetland economy during its 30-year lifespan. As well as a rental for the gas plant site the council extracted a levy from Total which will vary according to the amount of gas going through the plant and its value.
Mr Cluness said he believed the agreement suited both parties and if production increased it would mean more benefit for Shetland. He said: “I think Total’s aim will be to try and get as many other companies to feed into their pipeline as possible. It will be worth a fair bit to the council but the main benefit will be the community as a whole. Just as in the earlier Sullom Voe days there will be big spin-offs.”
Work is already well under way on building the road into the gas plant site. The contract was won by Irish company Roadbridge which has a team of workers and a fleet of earth-moving vehicles on the hillside at Garth. Around 700 workers will be needed at the height of construction work, housed in a special camp at Sella Ness, and 70 permanent jobs will be created in the gas plant.
Total is already offering five Shetland apprenticeships a year to train engineers to work in the plant and Mr Viviès said he hoped other islanders would be tempted back to Shetland by the opportunities. The company has established a headquarters in the former Shetland Towage offices at Sella Ness.
Mr Viviès said Total was committed to using local suppliers and services wherever possible and he promised the company would be a good neighbour. “Over the next four years Total’s presence will be felt across the islands,” he said.