Energy / Discussions still ongoing over future of Clair oil export
A FINAL decision has still not been made on whether oil from the Clair field will continue to come through Sullom Voe Terminal in the long-term.
Shetland Islands Council (SIC) chief executive Maggie Sandison said discussions are ongoing with Sullom Voe Terminal (SVT) operator EnQuest and BP, on behalf of Clair partners.
This came with warnings that if BP decided to stop sending oil through SVT and bypass Shetland then the terminal could have to close its doors much earlier than anticipated.
Oil from the Clair field has been exported to Sullom Voe Terminal for around 20 years, and in 2019 BP said production from the field is expected to continue for at least another four decades.
Exports from SVT through the Port of Sullom Voe earn Shetland Islands Council around £6 million to £8 million a year, according to a risk register published by the SIC.
Speaking at a recent meeting of the full council, Sandison said Clair owners still have not formally confirmed that the “long term solution for their future production will definitely be Sullom Voe Terminal”.
“There are ongoing discussions about the long term use of Sullom Voe Terminal with both EnQuest and BP, and I’m not in a position to say we’ve concluded that yet,” she added.
The matter was raised when depute leader Gary Robinson questioned some of the details about the topic in the SIC’s risk register.
It said: “If SVT cannot secure long term business on a satisfactory commercial basis then there is a risk that the terminal would close in the medium term, perhaps around 2025.”
The risk register also said that West of Shetland volumes are “forecast to increase significantly over the coming years and be sustained for a considerable period of time, c2050-60”.
Sandison said the 2025 figure should likely be the mid-2030s instead.
“Without that [Clair] decision, that essentially leaves Shetland with just the east of Shetland oil production going through Sullom Voe, which does potentially mean that mid-30s date being a possibility,” she added.
When the news of the Clair review was revealed in 2019, the SIC’s risk register said back then that without oil from the field coming through SVT then there was a risk that the terminal could close in 2025.
The risk register entry, last reviewed on 10 February, adds: “The council has recognised that there is a significant review process being carried out at the moment between Clair and SVT.
“Discussions have been held with both parties and further discussions sought with the UK Oil & Gas Authority (OGA). An internal/ external project team has been established to focus on this issue and specific items of technical advice are being considered with legal, financial and technical advisors.
“Engagement has been initiated through the Sullom Voe Association and council SVA directors are being kept informed of developments as a sounding board.
“Further reports on progress and plans will be brought to council through appropriate channels to ensure commercial confidentiality.”
A spokesperson for BP confirmed that discussions were ongoing.
A representative for EnQuest said the company would not be commenting on the topic.
One other new oil and gas development northwest of Shetland is in the works – the controversial Rosebank.
However, Rosebank will use a floating production storage and offloading unit rather than exporting oil directly by pipeline.
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