News / Sullom Voe harbour charges hike
HARBOUR charges at Sullom Voe Terminal are set to rocket as Shetland Islands Council tries to avoid running the port at a loss.
Council officials have told councillors that there was a risk of subsidising the oil industry should charges not be increased by 30 per cent as of next financial year.
The SIC’s income from operating the oil port has collapsed in 2012/13 after production at the Schiehallion oil field was suspended resulting in a 40 percent drop in the throughput at Sullom Voe.
For years, the operation of the port of Sullom Voe created healthy profits and bolstered the council’s reserves.
But since the amount of oil shipped at Sullom Voe has started declining rapidly the local authority finds it increasingly difficult to generate a return from the port.
In a report before councillors on Thursday, finance chief James Gray said: “The terminal operator still requires a 24 hour, 7 days a week harbour operation to facilitate tanker movements.
“This means that there is a requirement to continue to incur a high level of fixed cost expenditure to maintain this level of service, but the income has dropped significantly to finance it.”
He added that even with an increase in charges of 30 per cent, the port is expected to earn almost £3 million less than in 2012/13.
The oil industry has already expressed its dissatisfaction with the development, warning that such a price hike would drive away future business and send out the wrong message to companies investing in the West of Shetland oil and gas fields.
If councillors approve the proposals the charge for handling tankers entering the port of Sullom Voe rises to £1.25 per gross tonne per visit as of April this year.
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