The council must start fighting for new oil business for Sullom Voe from companies which are gearing up to tap huge oil and gas fields west of Shetland.
Council harbour board chairman Alastair Cooper wants talks to begin now with operators like Chevron which has a big programme of activities around Shetland that could greatly expand production at the terminal for decades to come if the business could be won.
In particular, Mr Cooper covets oil from the Rosebank-Lochnagar oil and gas field which is said to be one of the biggest fields in the UK sector and would rival the Schiehallion field in importance to Sullom Voe if its oil is piped or shipped to the terminal.
He reminded the harbour board on Wednesday that the council had moved in early on Total to persuade it to bring Laggan-Tormore gas production through Shetland, which was achieved despite the opposition of some parties, including the UK government, which initially favoured other options.
Head of ports and harbours Roger Moore said the council hoped to talk to oil companies soon to promote Sullom Voe.
The call for action comes as the port of Sullom Voe is set to become a sleepy place this summer with few tankers calling due to the number of major oilfields closing down for maintenance.
As well as the shutdown of the Schiehallion and Clair fields to the west, the Ninian and Magnus fields in the East Shetland Basin will cease production to take full advantage of the summer weather window for repairs and improvements to be done. The lull will deprive Sullom Voe of most of its throughput, making tanker visits even fewer and far between.
BP terminal manager Lindsay Boswell told the harbour board the summer shutdowns were as expected, having been previously forecast by the industry.
The Russian ship-to-ship oil transfer business which has been a recent boost to port earnings has also ended until next winter, when the port will have had to acquire a special government licence for the trade. Sullom Voe will also not be seeing any more gas tankers after the final one called this week.
The council employs 133 people in the ports and harbours division to man tugs, pilot boats and run shore operations. Mr Cooper said: “We’re going to have a quiet summer.”
He said the council should be speaking to Chevron now to try to influence its plans for Rosebank-Lochnagar, which lies in the Faroe-Shetland Channel about 81 miles north-west of Eshaness.
The field is expected to produce an initial 75,000 barrels of light oil a day when production starts in 2017 or earlier, which is more than any existing west of Shetland field is currently managing.
Chevron and field partners Statoil, OMB and DONG are already looking at commissioning a circular floating platform for the field from the Norwegian company Sevan in which to store the oil at sea for shuttle tankers. Other engineering feasibility studies on the field are also being done this year as momentum gathers.
Chevron is looking to carry out more exploration drilling in the Cambo field later this year, which lies south-west of Rosebank-Lochnagar. Another plan creating excitement in the industry is Chevron’s exploration of the Lagavulin field about 125 miles north-west of Shetland where it intends carrying out test wells. Industry commentators Petroleum Economist believe that could lead to a surge in exploration activity in the Atlantic Margin.
One of the fields which is expected to make use of the new Total gas pipeline from west of Shetland when it is ready in 2014 is Faroe Petroleum’s Glenlivet gas field. There is a host of other developments on the horizon for the province, not all of them gas. BP is looking to double oil production from the Clair oilfield from sinking new wells and building two connecting platforms, which Mr Cooper expects to be piped to Sullom Voe.
Others include Chrysaor’s Solan oil field, which could come on stream next year about 84 miles west of Bigton, and also Tobermory, Torridon, Suilven, Cardhu, Tornado, Freya and Fulla.
Mr Boswell said the terminal was always keen to attract new business and would of course support the council in its efforts at persuasion. He said contact had already been made with Chevron by the terminal operators on a couple of occasions.
The harbour board remains worried about BP’s plans to replace the floating production ship Schiehallion with a larger craft to be built at a cost of £1.3 billion, as reported previously and confirmed by BP in March. The fear is that BP will do as it did with oil from Foinaven field west of Shetland which used to be sent to Flotta in Orkney by shuttle tanker but now goes straight to market.
The contract to handle Schiehallion oil is up for renewal in 2012 and a new storage ship has been spoken about for 2015. Mr Boswell did not offer the board any inside information on BP’s intentions.