Energy / Energy transition set to keep Sullom Voe Terminal running for decades
THE COMPANY behind plans to turn parts of the Sullom Voe Terminal into a net zero hub says the long-term project has the potential to become a world leading site for industrial decarbonisation.
Speaking to Shetland News this week Gavin Templeton, the chief executive of Veri Energy, a wholly owned subsidiary of terminal operator EnQuest, said the company was trying to turn the declining oil business into a growth opportunity based on clean energy that could extend the life of the terminal by many more decades.
Templeton, who has been in post since October last year, described Shetland, and in particular the Sullom Voe site, as a “microcosm” with all the necessary infrastructure and skills already in place.
And as the oil and gas continues to decline and a large part of the North Sea basin is in line to become uneconomical, the race is on to turn projects such a carbon capture and storage (CCS) as well as green hydrogen production into viable businesses, he said.
“It is recognition that renewables are a growth industry, and oil is in decline,” the Veri chief executive said.
“EnQuest and Veri recognise that there is an opportunity here, and it is an opportunity to bring the people with us.
“The challenge is to act quickly to develop a viable business: to ensure that as oil declines further we are not losing those jobs but retain these jobs.
“I am focused on bringing those jobs across to those new opportunities that exist.
“Local jobs and skills are the price. I want to say [to local people] we got a viable business here and we want you to get involved.”
However, the energy transition is a challenging one, and according to Templeton it is long-term and certainly not linear: “It’s lumpy and bumpy; so it’s incumbent on me and the team to focus on delivering projects that can demonstrate that there is a future here.”
As such, Templeton said the company was hoping to be ready to start injecting CO2 from industrial processes into its Thistle oil field reservoir before the end of the decade.
The company also hopes to initially have two large wind turbines operational on the Sullom Voe site by late 2027/early 2028 as part of efforts to decarbonise the terminal, reduce its running cost.
Producing green hydrogen from wind energy and developing e-fuels that could be trialled in the local marine market is another of the company’s key projects in repurposing the large industrial site.
Sullom Voe Terminal is also set to be connected to the local/national electricity grid via an underground cable as the onsite gas-fired power plant is due to be switched off and decommissioned.
Photo: Courtesy of BP
Templeton said Veri Energy was confident it could develop its ambitious carbon capture and storage project at market conditions and without additional financial help from government.
In May 2023, EnQuest/Veri received four carbon storage licences from the North Sea Transition Authority in the regulator’s first UK offshore carbon storage licensing round.
Since then the company has been working on plans to ship carbon dioxide from large industrial emitters to Sullom Voe, process it and the pump it for long-term storage under the North Sea.
The company signed a Memorandum of Understanding (MoU) with the Severnside Carbon Capture and Shipping Hub (7CO2) at the end of last year to explore CO2 from the Avonmouth Cluster emitter being sent to Sullom Voe.
Templeton said the Sullom Voe site was the ideal location to develop the technology which could make a significant contribution in reducing the UK’s carbon footprint.
However, he said a lot of work and analysis was required to make it all happen before 2030.
“Four or five years from now is still pretty ambitious in terms of the undertaking that you have to do. The advantage that we got is that some of the infrastructure is there already both at the port level and the pipelines,” Templeton said.
“That gives us some tailwind in terms of what we are doing but there is still a huge amount of work both on the commercial site and on the engineering site that need to be completed.
“This is a waste management business, and we think we can do it in a way that is profitable,” he said.
Ultimately, Veri is hoping to be able to inject as much as 10 million tonnes a year into disused oil reservoirs, but that is a long-term ambition and Templeton is mindful that achieving net zero is a “journey that will take us decades”.
“I have aspirations to make this a world leading site for industrial decarbonisation,” he said, and added he wanted to see some smaller projects coming to fruition soon to demonstrate that it can be done.
“We have a real chance to put that into practice – there is nothing to suggest that there is an end to Sullom Voe Terminal.”
When asked how recent geo-political upheavals and the Trump presidency might undermine the quest for net zero, Templeton said he was relaxed.
“Greener power is cheaper power,” he said. “So, if something is cheaper it will succeed.
“Renewable energy is now the cheapest form of energy in many places, and the reliability of battery technology improves all the time. The economics speak for themselves; and this is why I am quite confident that this is a blip.”
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