ENGINEERING company PD&MS Energy and fabrication specialist Harlen are investing £2.5 million into a new rig repair and subsea fabrication facility.

The companies have been operating in tandem on a short-term lease from a yard at the Port of Dundee.

Now they are taking a longer term option on a larger site on Princess Alexandra Wharf at the port.

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The 38,750 sq ft facility has been fitted out for a range of work across the energy sector including rig and vessel repair and upgrades.

Around £1m has been spent fitting out the workshop space with a further £1.5m pencilled in to be spent during the next three years.

The yard will support around 50 full-time jobs although that could rise to as many as 260 during specific projects.

Around £8m of offshore asset servicing work is expected to be handled at the site during its first year in operation.

Aberdeen-based PD&MS will handle project management elements in the business while Harlen, which has its headquarters in the Dyce area of Aberdeen and was founded in 1980, will take on fabrication works.

Dave MacKay, executive chairman of PD&MS Energy, said: "The buoyant offshore market and our extremely robust order book have given us the confidence to invest significantly in these new premises as well as expanding our offering in the growing decommissioning sector.

"This new workshop offers more space to house our growing workforce and improved infrastructure, allowing us to gear up for further new business going forward."

Mr MacKay said PD&MS, which was established in 2002 is also looking for further office space in Aberdeen for around 400 staff as part of its growth plan.

Bruce Gill, managing director of Harlen, said: "This facility increases not just our physical capacity and capability in supporting PD&MS in the rig repair market, its quayside location will allow Harlen to extend its offerings in subsea equipment, topside module, accommodation modules and large-scale fabrication sectors.

"There are only a handful of companies in Scotland that can fabricate such significant pieces of offshore equipment and this investment places Harlen among the top players."

Matt North, port manager at the Port of Dundee said: "We are delighted that both PD&MS and Harlen are investing in the Port of Dundee.

"Dundee is quickly becoming known as the leading port in Scotland which provides a comprehensive and experienced supply chain to support all North Sea vessel calls for maintenance, repair and decommissioning.

"We will continue to work with both companies to attract further business to the Port and ultimately to secure further jobs for the city."

The move is another step forward in Dundee's regeneration which appears to be gathering pace as its mammoth waterfront project, which will eventually hold the V&A museum, starts to take shape.

German entrepreneur Hermann Twickler's fast growing PressureFab is one of the most successful manufacturing businesses to set up in Dundee in recent years.

The award winning Mr Twickler has quickly established a long list of North Sea customers being served from premises in the City of Discovery.

Earlier this year PressureFab bought Fife based Houston's in a move to secure more work in the subsea sector.