SHETLAND is in pole position to grab a GBP15 billion slice of North Sea decommissioning following a deal between Aker Kvaerner of Norway and Shetland Decommissioning Company (SDC).
The deal, which also involves Lerwick-based SBS Logistics and Onyx UK, paves the way for a multi-million pound, world-class decommissioning base at Lerwick.
"Decommissioning creates tremendous potential for employment in Shetland, " said Allan Wishart, chief executive of SDC. "Initially, we'll create an additional 40 jobs but the future potential is massive."
Wishart said that in Norway, the Eldoyane decommissioning base at Stord (between Bergen and Stavanger) is now home to 27 companies.
Lerwick Port Authority, of which Wishart is chief executive, is playing a major role in transforming the Greenhead base to handle deepwater vessels needed to transport parts of the massive steel platforms in the North Sea.
"We're very much in pole position to bring a lot of decommissioning work to Shetland, " said Wishart.
Aker Kvaerner has just relocated global decommissioning expert Kare Kristing to Aberdeen from Norway to prepare for the first wave of decommissioning in the UK Continental Shelf (UKCS). He plans to hire 25 structural engineers to work on innovative designs for the safe removal of platforms, pipelines and other infrastructure. Kristing, UK director of decommissioning, has previously worked on major contracts including the removal of Conoco Phillips's Maureen infrastructure and Total's Frigg gas installations which straddle the UK and Norwegian sectors. Shetland will process some 20,000 tonnes of steel from Frigg, its first major decommission.
Kristing said there are 660 oil and gas installations in the North Sea of which 361 are in the UKCS. So far only a handful of small, shallow water steel platforms and subsea installations have been decommissioned but larger platforms will reach the end of their life from 2006 to 2030 and beyond.
High oil prices have resulted in decommissioning delays but tendering for the first big contract will begin in February.
Kristing said: "There will be a decommissioning boom. This is a market which will be worth GBP1bn to GBP1.5bn a year for 15 to 20 years ahead."
He will lead Aker Kvaerner's bid to decommission BP's North West Hutton platform.
The contract, worth an estimated GBP120 million, will mark the first major decommissioning job in the UKCS.
Kristing said it will pose technical challenges and stringent environmental standards will emphasise recycling requirements. He said that 99.5% of materials were recycled or reused from the Maureen field.
Murdo Maciver, operations director Shetland for SBS Logistics, a shareholder in the Shetland Decommissioning Company, said SBS is investing an initial GBP1m in the Greenhead base in a collaborative venture with Lerwick Port Authority, Shetland Island Council, and the local enterprise council.
"We're putting in a state-ofthe-art facility, future investment will be substantial. It'll put it at Shetland at the forefront of an evolving industry, " Maciver said.
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