Energy Decomissioning

Shetland

The Highlands and Islands has a significant early foothold in the emergent oil and gas decommissioning sector – a multi-billion pound market poised for large-scale growth in the next few years.

In the decommissioning vanguard is Shetland – the region’s most northerly but well-placed island group.

As one of the few suitable UK locations for this type of work, Shetland has already established a significant presence in an expected 30-year, £50 billion marketplace.

In what will be a competitive landscape, with facilities in Norway, Holland and Teesside all seeking to secure work, the Northern Isles have an ideal combination of deep water experience and skills to take a major slice of this growing opportunity.

A massive market

It is now over 40 years since oil was first struck in the North Sea, and although there are still prospects to extract major reserves over the next 40 years, many of the early fields, and the massive offshore infrastructure that goes with them, are reaching the end of their life.

In the coming decades, as fields cease production and oil rigs become redundant, there will be a steady pipeline of major oil industry hardware which needs brought to shore, dismantled and disposed of.

The Shell Brent Delta platform, for example, is the first of four major rigs on the oil giant’s former flagship Brent oil and gas field which will need to be decommissioned.

Delta ceased production in 2011. The rest of the field (platforms Brent Alpha, Bravo and Charlie) continues to produce oil and gas although these platforms are scheduled to cease production between 2014 and 2015.

In total, the North Sea contains more than 600 offshore oil and gas installations, of which 470 are in the UK Continental Shelf waters, along with more than 10,000km of pipelines and around 5,000 wells. Of the installations in UK water:

•    10 per cent are floating structures;
•    30 per cent  are sub-sea;
•    50 per cent are small steel;
•    10 per cent are large steel or concrete.


Over 90 per cent of these structures will be brought back to shore for re-use, recycling or other disposal. The remaining very large steel or concrete installations will be assessed individually for technical and safety feasibility of complete removal as the preferred solution. Also requiring decommissioning in time will be 15 onshore terminals.

Shetland's strength

Whilst Teeside and Holland are well placed for the oil platforms of the southern North Sea, Shetland and Norway are perfectly positioned for the massive deep water platforms, such as the Shell Brent Delta, in the northern North Sea and the Atlantic – by far the largest slice of the £47.5bn market.

It is a specialised market, and any bidder must meet stringent environmental and safety guidelines, and those doing it need experience, equipment and proximity.

Shetland has all three. Towing distances from the field to shore are such that movement operations are expensive, to put it simply, the shorter the distance, the better.

In addition to proximity, deep water is key. Most preferred techniques involve towing the platform as near to shore as possible and either lifting major components direct on to the quay, or on to barges and then to the quay.

Lerwick harbour is ideal.  With two entrances, the sheltered, deep-water port is open to shipping in all weathers and operates 24 hours a day, handling over 5000 vessels per year.

A major dredging project at Lerwick’s north harbour in 2008 deepened access channels for larger vessels and provides deep water (over 45 metres) inside port limits in both
its north and south approaches – making it ideal for deballasting and lifts close to berths.

One Shetland firm, Peterson SBS – the initials stand for Shetland Base Services – already has a considerable track record. Their strength is in heavy lifting, built up over nearly 40 years in oil and gas. Working with Veolia Environmental Services, a £multi-billion waste management business, they are keen to take a slice of the new market.

In 2007 they brought ashore part of Total’s TCP2 tonne module support frame – weighting 8,730 tonnes – in one of the largest single decommissioning lifts yet in the North Sea. See the Frigg decommissioning project snapshot for the full story.

Peterson SBS and Veolia have now tabled plans to at least double the size of their decommissioning facility at Greenhead – already a vast 20,000m2 – to offer one of the largest specialist sites in the UK.

At the same time Lerwick Port Authority has begun procurement to build a major deepwater quay at Dales Voe, which would be leased long-term by decommissioning specialists AF Decom Offshore UK.

Each of the proposed facilities would be a major coup for the islands and would put Shetland in a leading position for the years ahead.

It is not yet established which project will go ahead, but whatever the future holds, Shetland will be well placed to gasp the decommissioning opportunity and capitalise on the next chapter of Scotland’s unfolding oil and gas story.

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