News / Total deal postponed
A DEAL between French oil and gas giant Total and Shetland Islands Council on importing the first gas from the new fields being discovered west of Shetland has been postponed.
Both sides had planned to hold a signing ceremony with UK energy minister Lord Hunt in Lerwick on Thursday.
However that event has been postponed after councillors in Shetland failed to reach an agreement on a settlement with the company.
The SIC is understood to be looking for a rent agreement and is hoping for a royalty on the gas that will be piped from the £2 billion Laggan/Tormore gas development 75 miles west of Shetland to a new gas processing plant next to the existing Sullom Voe oil terminal and then on to St Fergus.
Councillors met for three hours in private with officials and their legal advisers this morning (Tuesday), but adjourned the meeting having failed to agree with what the oil company had put on the table.
Lawyers for both sides will continue negotiations over the next few days to resolve various outstanding issues in the hope that a new signing ceremony can be set up in the very near future.
Total want to start work on constructing the £500 million gas plant next month and the UK government is desperate to shore up the country’s energy security with any available gas supplies. Production is scheduled to start in 2014.
Meanwhile the council is looking to boost its own coffers to replace the declining oil funds from Sullom Voe terminal, which are forcing it to impose cuts in service that are unwelcome in a community which has enjoyed considerable wealth for the past 30 years.
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