Energy Decomissioning

Introduction

The Highlands and Islands, through an international consortium operating in Shetland, has a head start in this multi-billion pound market, having won and run key contracts in Europe’s first major oil field decommissioning project.

Valued at up to £25 billion pounds, for the facilities servicing the UK Continental Shelf alone, a significant new industry is set to emerge and stay with us for decades to come.

Snapshots of the specialist contracts completed by the Shetland Decommissioning Consortium demonstrate the expertise and supply chain integrity established to match the new sector’s demands.

A Head Start in the Highlands and Islands

The Highlands and Islands has a significant early foothold in the emergent oil and gas decommissioning market 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 – where an international business consortium has already completed some hefty specialist projects and major development work is in hand to further expand capacity.

The consortium’s success, and its facilities at Greenhead, Lerwick, have put the islands on the map as one of the UK’s elite centres of expertise and capability in this field. Now the base is to be extended and enhanced to attract bigger and more demanding contract opportunities.

Key to this will be construction works, in 2010, to increase Greenhead’s berthing capacity by a third and install a 1,000 tonne capacity heavy lift pad to complement the base’s 20,000 square metre licensed decommissioning area.

Boasting nine metres of quayside water depth, suitable for barge-delivered decommissioning structures, it is the home of the Shetland Decommissioning Consortium. Core members are Lerwick Port Authority, base operators Peterson SBS, and waste management and decommissioning specialists Veolia Environmental Services.

Together, these businesses and a range of local sub-contractors have cut their teeth on two contracts from the massive Frigg Cessation Project, breaking-down multi-thousand tonne structures in Europe’s first major oil field decommissioning project (see Shetland Project Snapshots under internal links on right-hand-side of this page).

As one of the few suitable UK locations for this type of work – and one or more other Highlands and Islands locations could also be developed for this – the upcoming market projections are attractive.

A Massive Market

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

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

Over 90% 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.

Looking further afield, across not only the North Sea but other western European waters also, the number of marine installations almost doubles. OSPAR, a grouping of 15 countries monitoring marine environment issues in the north-east Atlantic, registered 1,169 offshore installations, at July 2009. Just over half of these (601), are sub-sea steel installations, with 497 fixed steel structures and 21 gravity-based concrete installations.