News / Total deal agreed
COUNCILLORS in Shetland last night (Thursday) cleared the way for a new dawn in
Britain’s energy future by agreeing a deal on the lease of land at Sullom
Voe with French oil and gas giant Total.
Total will start work on building a new processing plant to handle gas to be piped in from the Laggan/Tormore field 75 miles west of Shetland before being exported to the Scottish mainland at St Fergus via the Frigg pipeline.
Talks with Shetland Islands Council on a lease of the land began on Tuesday morning and only ended at 5.30pm yesterday afternoon (Thursday). The lease agreement will be tied to the amount and the price of gas that flows through the islands.
SIC convener Sandy Cluness said the Total gas plant would inject £200 million into the islands’ economy over the next 30 years, providing 1,000 construction jobs and up to 70 permanent jobs after production starts in 2014.
Mr Cluness said: “This is probably the most important development for Shetland since the arrival of oil at Sullom Voe terminal more than 30 years ago. It has been calculated that the new plant will be worth £200 million to the islands over the period.
“It’s taken so long to agree because it is a long term lease and there are so many conditions in terms of the environment and employment and other things. Total have been very supportive throughout this process and they are keen to come here, so it is a good deal all round.
“I am very relieved because it has taken some time to reach this point, but I have to pay tribute to Total because these have been good negotiations.”
Shetland North councillor Alastair Cooper has been working with the council dealing with the oil industry for the past 30 years. He said the agreement was of great significance for the islands’ economy.
“This means a great deal to Shetland. It provides a new income stream for the local authority, it provides confidence for the young folk in Shetland in that we have up to 70 jobs in the area for the next 30 or 40 years.”
He said that the new plant would help the existing oil terminal at Sullom Voe by sharing costs, helping that complex to become more viable as oil throughput from the North Sea continues to decline.
More importantly for the council it will help them deal with tightening government budgets during the current recession, which have already seen them looking for substantial savings in the coming year.
There are also other developers opening up smaller fields to the west of Shetland which will be able to use Total’s pipeline to export their gas.
“This is the highway that we needed out to the west of Shetland to give access to other fields which we believe are out there waiting to be opened up,” Mr Cooper said.
The UK government must now sanction the development with a signing ceremony expected to take place in Lerwick shortly.
UK energy minister Lord Hunt had been due in Shetland yesterday, but his visit was postponed until the council reached an agreement with the oil company.
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