ANYONE on the shores of the Cromarty Firth last week would have seen it: a vast, garish orange tower moving slowly through the winter water, like some science-fiction rocket dock that got lost on its way to Mars. Even its name, the Borgsten Dolphin, has Isaac Asimov written all over it.
In reality this ageing oil rig was heading north from the Nigg fabrication yard to the port of Invergordon, having spent the past few months being refurbished. After some extra touches in Invergordon, it will resume its return journey to the North Sea to begin a new lease of life.
For people who like getting their hands dirty, these are exciting times in the eastern Highlands. Nigg might still be a long way from the days when it employed 5000 at the height of the oil and gas boom, but it has been taken promising steps forward since being taken over by local group Global Energy in 2011.
Loading article content
On the back of a resurgence in oil and gas work, chairman Roy MacGregor, who controls the company, has quadrupled the number of jobs on the site to about 800. Global reckons it has won enough fabrication and repair work to add another 400 jobs during this year. Now that the Borgsten Dolphin has vacated the dry dock another big rig will be taking up a three-month residency in a few days' time.
While these contracts pile up, Nigg was party to a contrasting announcement from Alex Salmond at the Offshore Wind and Supply Chain conference in Aberdeen last Tuesday. The First Minister unveiled to delegates memoranda of understanding (MoUs) between local development agency Highlands and Islands Enterprise (HIE), the Nigg yard and the ports of Invergordon, Ardersier and Kishorn.
He said: "These ports are ideally positioned to become key hubs for the deployment of offshore wind, wave and tidal energy – across manufacturing, assembly, operations and maintenance – and the new MoUs underpin the importance that we attach to ensuring that all of Scotland wins from the renewables revolution."
The MoUs reflect a commitment by HIE to back the four sites with things such as financial help and fast-track planning. They are reckoning on needing about £100 million to upgrade their facilities to be able to cope with making and handling the kit needed for offshore wind farms and eventually other types of marine energy.
With plans already afoot to build 10GW of offshore wind farms in Scotland, equating to about 1500 giant turbines and foundations, this is what it costs to seize the huge manufacturing opportunity going begging with the foreign suppliers.
While the ports made all the right noises welcoming this vote of confidence, observers are puzzling over what was said by Salmond. HIE's longstanding efforts and investments in renewables at Nigg as well as the ports of Arnish near Skye and Machrihanish in Argyll make it clear that the agency was strongly committed to the sector anyway.
One theory is that it was an expression of political affection for the Highlands, whose businesses sometimes feel they suffer because their region relies on HIE for development and not Scottish Enterprise, which has close ties to inward investment agency Scottish Development International (SDI).
Though the latter two agencies would strongly disagree, the Highland ports have certainly not enjoyed the same early success in offshore wind as those in the central belt. Edinburgh's port of Leith has signed MoUs with Gamesa of Spain and Areva of France to build manufacturing bases. Similarly Mitsubishi is tied to Dundee and Samsung to Methil in Fife – albeit that MoUs are a good way short of contracts, which will not come until turbines are ordered in a couple of years' time.
None of the Highland sites has equivalent agreements yet. Aside from theories of SDI neglect, another reason might be that most offshore wind farms are planned for further down the east coasts of Scotland and England. The only offshore wind farms heading for the Highlands are Beatrice and Moray Offshore, both in the Moray Firth with about 2GW of capacity between them.
Another contributing factor might be the Highland sites themselves. Like Nigg, Kishorn and Ardersier were both massive players in oil and gas back in the day, employing thousands.
The Kishorn yard on the west coast closed in 1988 after owner Howard Doris went out of business. Blessed with 80-metre water depths with no peer in Scotland, it first stepped out of retirement in 2006 when it was taken over by haulage/construction companies Leiths (Scotland) and Ferguson Transport.
Leiths has been developing an adjacent sandstone quarry, which is well-suited to making strong concrete, while Ferguson uses parts of the port for handling timber and fish-farming equipment.
Having spotted the opportunity in offshore wind, the two are seeking planning permission for building concrete foundations for offshore turbines. They are hoping to attract interest from suppliers to projects well outside the area, though some think they may have to wait until the industry gets going in the west.
Two big farms are planned off Islay and Tiree respectively by SSE and Scottish Power, but both are lagging behind the east. In time they are likely to be followed by more Western Isles farms and commercial-scale wave and tidal projects, but not until the 2020s at the earliest.
Ardersier, near Inverness and formerly known as the McDermott yard, closed its doors in 2000. It was subsequently taken over by the Whiteness Property Company, a group of local investors.
It secured planning permission to build several thousand houses, a luxury hotel and a marina. It flattened the entire site, but luckily or unluckily the financial crash intervened before it started building.
When Scottish Enterprise published its National Renewables Infrastructure Plan in 2010, outlining the best sites and their requirements for getting into renewables manufacturing, Ardersier and Kishorn scored much lower than Nigg in the league table of Scottish ports. Kishorn lost marks for being in the wrong location. Ardersier lost marks for lacking deep-water facilities and lacking a development timetable, reflecting owners still licking their wounds and considering options.
Nigg scored third only to Leith and Dundee and would have been top had it not been marked down for its location. At the time it was being held back by having joint owners in Texas conglomerate KBR and local landowner the Wakelyn Trust, which could not agree the best way forward.
HIE and Highland Council developed a masterplan to turn it into a big renewables operation, threatening compulsory purchase. But Global Energy bought it before this came to pass. It got a £2.6m package of public funds to help pay for £12m of refurbishments aimed at work in both renewables and oil and gas.
The authorities will hardly be complaining with so many jobs since created, but they have all been about oil and gas. Nigg is not quite full, but it is not far off.
Whether HIE foresaw this or simply wanted to maximise its chances of success in renewables, it began talking to the Whiteness investors at Ardersier some time ago. Partly on the back of these conversations, the company changed its name to Port of Ardersier and hired chief executive Stephen Gobbi, a well-regarded senior Peel Ports veteran, with a view to building a port dedicated to renewables. It is now looking for public assistance for a £25m infrastructure investment, which looks to be in the bag following Salmond's announcement. Gobbi stresses that the port is big enough to cope with all four of the manufacturers that have signed MoUs in the central belt.
This leaves only Invergordon, a smaller port north of Nigg whose owner is Cromarty Port Authority. As with the Borgsten Dolphin, Invergordon and Nigg regularly work together. Invergordon is full almost to capacity with oil and gas work, but it is keen to play a role in renewables by offering secondary services like materials-handling and maintenance. It has a £20m expansion plan with this in mind. That this too now looks like getting public assistance seems to have put the port ahead of secondary rivals such as Wick and Buckie.
Some suspect the main reason for last week's announcement was to subtly signal a change in priorities in the Highlands. One well-placed source says: "Nigg is doing its thing. Kishorn is in the wrong location at the moment. The announcement is driven by Ardersier. I suspect that if HIE are doing something for one port, they have to be seen to be doing something for the other major ports too."
Calum Davidson, director of energy at HIE, denies Ardersier is now the priority. "Ardersier, Nigg and Invergordon have complementary strengths," he says. "Ardersier can dedicate itself to renewables. Nigg is very busy with oil and gas, but a very large site. Other parts of the supply chain can be co-located there. Invergordon specialises in mobilising and demobilising large vessels. We are talking about a cluster."
This does not make Nigg sound like the renewables manufacturing powerhouse HIE previously intended. Equally, it points to Nigg's advantage over Ardersier in its existing facilities. Another source adds these make Nigg much better placed for support and logistics, while Ardersier is really only suited to pure manufacturing.
The bigger question is whether manufacturers will be prepared to locate in the north. Some still insist that most of the action will take place further south in order to serve the greatest number of wind farms in a narrow radius.
Ardersier's Gobbi strongly disagrees. "The space requirements are very high for offshore renewables. They will more than fill Ardersier. In fact we believe we won't have enough space."
Davidson adds: "The turbine guys are very interested in the central belt ports, but if you are looking at the requirements for Scottish wind farms and large concrete-and-metal foundation structures, it's clear that you need a lot more quayside, fabrication and laydown space. That's why we are working with these ports to try and take this forward."
The Highland ports can be grateful that they had a day in the sun last week. All will watch with interest to see what happens next.