Petrofac to create 500 construction jobs in Shetland

 

Author - Mark Williamson © The Herald Originally published: 28/10/2010

Petrofac has won a £500 million contract to develop a plant on Shetland to process the output from two giant gas fields, which is expected to create 500 construction jobs on the islands.

The oil services giant has been engaged by Total to build a plant to handle the output from the Laggan and Tormore fields. These lie around 90 miles north-west of Shetland.

Work is scheduled to begin this month on the plant, next to the giant Sullom Voe oil terminal on the main island. First gas is expected in the second quarter 2014.

Petrofac said as many as 800 people will be employed on the project. A spokesman for the company said it is anticipated that around 500 new positions will be created on Shetland next year to support the construction phase.

Total expects the plant to employ around 70 people when it is operational. It will provide an important source of jobs for Shetland and income for the islands’ authority for years.

The fields contain gas and condensate equivalent to 230 million barrels of oil.

Made in 2004 and 2007 respectively, the Laggan and Tormore discoveries showed there is still plenty to play for in the North Sea. The deepwater west of Shetland has been attracting increasing interest from a number of oil and gas majors. Advances in drilling and pipeline technology mean it is now possible to develop some fields that would have been considered uneconomic in the past.

Laggan and Tormore lie in 2000 feet of water. This is the deepest water in which a gas field has been found on the United Kingdom Continental Shelf (UKCS).

Welcoming news that the £2.5 billion development of the fields would go ahead, in March the former business secretary Lord Mandelson said it would be a major technical challenge to operate in such deep waters.

Earlier this month Subsea 7 won a $250m contract from Total to lay miles of pipelines and underwater systems for the fields.

The infrastructure installed for Laggan and Tormore might be used to transform the economics of other fields in the area.

On its website Total says: “Laggan-Tormore is a strategic development opening up the West of Shetland for future development.”

The French oil and gas giant believes West of Shetland has the potential to produce 2.5 billion barrels of oil equivalent. It reckons the area holds around 17% of the UK’s remaining oil and gas reserves.

The latest North Sea licensing round reflected strong interest in the mature North Sea from international oil and gas firms.

The Department of Energy and Climate Change announced that 144 licences have been offered to applicants in the 26th Licensing Round. These cover 268 blocks. A further 99 blocks are under consideration, pending the results of environmental assessments.

Some 83 companies were offered licences including seven that are new to the UKCS. Total was offered six licences, while BP and Shell were allotted five and four licences respectively.