The proposed new gas sweetening plant for BP’s Sullom Voe terminal has been put on hold due to the fall in global oil prices.
The £500 million project would have meant around three years’ work for up to 500 workers, and was given planning permission in June 2014.
But construction was postponed more than once, although local company DITT had been preparing the ground at the site. Now, with the news of that the gas sweetening plant is being put on hold, up to 12 workers face redundancy.
BP stated: “Initial site preparation works for the Sullom Voe gas sweetening plant are now complete.
“As you would expect, in the current climate, SVGS [Sullom Voe Gas Sweetening] partners have requested that all options be reviewed to see if further cost reductions or efficiencies can be identified.
“We expect that the focus of the project will shift to invest in, and maximise use of, existing equipment and potentially undertake additional sweetening offshore.”
Local councillor Alastair Cooper said: “This is no surprise, but it’s taken BP a while to tell us. It’s a pity because the community could have done with the work. But with the oil price what it is, the industry is looking at every way it can to save money.
“It will have a short-term effect on local contractors, and if they don’t do it in future there will be a loss of work for both Shetland and mainland workers.”
DITT director Peter Tait said about 20 men had been been preparing the site, and the “tidying-up” work was due to finish this month.
Referring to the gas sweetening plant being put on hold, Mr Tait said: “It’s disappointing, but we’re still recruiting in other parts of the business.”
The development was to remove hydrogen sulphide from incoming gas. The “sweetened” gas would then continue by pipeline to the Magnus field, 100 miles north-east of Shetland and Britain’s most northerly oil field, to be injected to improve oil recovery rates.
When fully operational the sweetening plant had been expected to employ 33 full-time workers.