Shetland Gas Plant was formally opened today by energy secretary Amber Rudd addressing a host of Total top brass and local and national politicians.
Ms Rudd said that SGP played an important role in the UK’s energy jigsaw, providing seven or eight percent of British gas requirements – or about enough for the whole of Scotland. SGP was a ray of optimism at difficult time for the market.
She emphasised that gas was one part of the mix, along with renewables – she all but confirmed rumours an announcement on a forthcoming renewables auction would be made next month, but there is still uncertainty whether Viking Wind Farm and other island on-shore wind projects will be allowed to bid on this.
The energy secretary confirmed she had had representations from local MPs about the importance of the wind farm for the future of Shetland’s economy and said that she “was aware of the value local people put on it”, but could not yet say if will be in the pool of projects permitted to bid in the auction.
Instead, she stressed the UK’s record in developing more offshore wind energy than the rest of Europe put together.
Speaking after unveiling a plaque in the gas plant dining hall, Ms Rudd said that the £3.5bn plant and associated offshore infrastructure was a “triumph for the area” and a “fantastic investment into the UK oil and gas industry” and played a major part in energy security.
She also fielded criticism she had shown a lack of commitment to Scotland by failing to come north at a time that the offshore sector was suffering in Scotland, by saying people were more interested in outcomes than attendances.
Total chief executive and chairman Patrick Pouyanné said that the UK was perhaps unique in Europe in the incentives that it had offered since the oil price slump but called for a relaxation of corporation tax.
He also said that gas and oil had to keep being technologically innovative if it was to weather the downturn in prices and keep growing and investing in the North Sea and west of Shetland fields. Gas and renewables such as solar had a crucial part to play in a low carbon energy mix and was helping to move away from reliance on coal.
He said that energy companies must prepare for the future and shift their image from that of the “bad boys” to being seen as part of the solution. As such, energy companies should emulate the exploratory spirit of the Vikings and pioneer change.
Ms Rudd said later that the long-term future of UK gas production would be assured as the government has embraced the, highly controversial, process of fracking.
The speakers emphasised the toughness and difficulty of the conditions that SGP had been built under and conceded that these had not been fully accounted for while congratulating the efforts of the partners, including the Laggan Tormore partners Dong Energy and SSE as well as principal contractors Petrofac and its subcontractors.
Total UK managing director Elizabeth Proust said safety had been a constant factor during the construction of the plant and in 16 million man-hours of work there had been no fatalities and only a few serious injuries; for that she congratulated the client, contractors and everyone involved.
The plant was on top form production wise for the tour of guests with 15.5m standard cubic metres of gas being output – up 10 per cent on planned production. Guests and reporters were also informed that the flare will be extinguished once a battery of compressors is fully commissioned, reducing the carbon output of the plant’s operation.
So keen was Total to emphasise its safety credentials that all visitors were invited to report any breaches of safety they might notice as they were whisked around the site on bus.
A unique feature of the plant is the massive bunds that are being used to store 700,000 cubic metrest of peat that will be used to reinstate the site once its working life is over. These peat dumps are as deep below the ground as they extend above.
Another is the amount of mono-ethylene glycol (Meg) anti-freeze that is injected offshore to keep the mix of gas and condensate, which would otherwise freeze in the pipes, flowing. A large part of the plant is devoted to recovering the expensive Meg which is re-injected at the well heads.
More in this week’s Shetland Times.