Britain’s biggest and toughest gas field project is bringing its own particular challenges and economic benefits for the energy-rich Highlands and Islands of Scotland.
It is also stimulating new approaches to environmental sustainability.
Development of the Laggan-Tormore gas fields and an integrated onshore Shetland Gas Plant together represent the most strategic investments in Shetland since the Sullom Voe oil terminal was established during the 1970s.
Lead developer Total E&P UK Limited, with its investment partner Dong E&P (UK) Ltd, will invest close to £2.5billion to produce gas from the deep and difficult sea area known as the West of Shetland Atlantic Frontier Region.
Extensive subsea infrastructure will be put in place offshore, linking to a £500million gas processing plant to be constructed on the Shetland mainland, and enabling production to commence during 2014.
First discovered 20 years ago, Laggan and Tormore are considered to be medium-sized and small to medium-sized gas fields respectively. Together, however, they combine to form the cornerstone of this pivotal UK energy industry investment.
Originally thought too small to develop when first discovered, the Laggan field was drilled in 2004 and three years later a well was drilled in the Tormore field. After detailed development engineering studies, the Laggan-Tormore Project got the final go-ahead in March 2010.
The fields lie some considerable distance from the west coast of Shetland – 125 kilometres to Laggan and a further 16 kilometres south west to Tormore.
Described by Total as the harshest environment in the UK, the project’s location and depths of 600 metres present the project development teams with challenging conditions to put in place the subsea production infrastructure.
However, considerable output is anticipated from the Laggan-Tormore reservoirs. Together they hold 1trillion cubic feet of gas, plus some condensates, equivalent to about 230million barrels of oil. When fully operational, a daily 500million cubic feet of gas will be produced (93,000 barrels of oil equivalent).
Beyond these two fields, the entire West of Shetland area may yield 2.5billion barrels of oil equivalent, making up 17% of the UK’s remaining oil and gas reserves according to the Department of Energy and Climate Change.
The subsea, onshore and other infrastructure created to support Laggan-Tormore will also make future investments in further gas resource developments West of Shetland more attractive.
The £500m Shetland Gas Plant, being built beside the existing Sullom Voe oil terminal, will process the fields’ output. It will employ 60-70 personnel when operational and Total will provide a technician apprenticeships programme, run by industry workforce development body OPITO, to train 15 young Shetlanders for employment at the plant over the first three years.
Development of the 250,000m2 plant, along with the preparation of the gas fields and the 30-year operational lifespan of the investment, will bolster the islands’ economy by potentially around £200million, estimates Shetland Islands Council Convenor Sandy Cluness.
Employment in plant construction, beginning during late 2011, will rise to a peak of about 700 during 2012 and temporary accommodation will be built to house the workers until 2014 at the nearby Sella Ness Industrial Estate. The utility and other services will be then left in place for use by future businesses locating on the estate.
Supply chain businesses in the Highlands and Islands are already benefiting from the Laggan-Tormore Project.
Both Orkney Research Centre for Archaeology (ORCA) and consultancy Xodus Aurora (also located in Orkney) have been assisting Total to research and define an Environmental Impact Assessment, focusing on the route the new gas pipeline will follow through coastal and offshore waters. The work will identify any important archaeological remains, for which Total would then prepare safeguarding measures.
ORCA has performed a similar role for the onshore areas also, as well as providing the archaeologists exploring the historical findings at the greenfield gas plant site (see below, History Uncovered).
Meanwhile, the region's energy trade body Energy North has facilitated two meetings in Shetland between its local members and Total, including a supply chain opportunities presentation from Petrofac, Total's lead contractor for the gas plant construction.
Petrofac cited opportunities including provision of concrete and quarry materials, surfacing sub-contracts, and other services from waste management to security, and catering.
A remarkable aspect of this colossal investment project is Total’s undertaking to remove, store, monitor and sustain a massive volume of peat from the construction site.
As a condition to planning permission for the plant, some 260,000 cubic metres of peat will be dug up and stored on-site for the duration of the plant’s operating life, and then replaced on decommissioning as part of returning the area to its original condition.
Though this long-term management of excavated peat is an unproven process as yet, the approach contrasts sharply with that of some decades ago, when the peat removed for construction of the Sullom Voe oil terminal was simply dumped into the sea.
Already, peat excavation has revealed a new site of considerable historical interest in the form of a main building and associated structures thought to be 4-5,000 years old. Samples are being analysed to help determine the purpose of some of the buildings, while the archaeologists will explore and dismantle other parts of the find, recording findings before the gas plant’s construction.
TOTAL E&P UK Limited is one of the largest operators in the UK sector of the North Sea, in terms of production and reserves. It is one of the largest exploration and production subsidiaries of the TOTAL Group, the world’s fifth-largest international oil and gas producer, with operations in 130 countries.
Present in the UK since 1962, TOTAL E&P UK has produced more than 1,600 million barrels of oil equivalent from the UKCS. It currently produces some 220,000 barrels of oil equivalent daily, comprising almost 10% of the TOTAL Group’s entire output.