Decommissioning: A huge opportunity on the horizon

Shetland has a long record of completing nationally significant energy industry infrastructure developments.

The Sullom Voe ­Terminal was built in the North Mainland in the 1970s, ushering an era of employment and investment across the isles.

Sullom Voe was a crucial gateway that paved the way for massive offshore developments in the North Sea and later to the West of Shetland. The positive economic benefits of that transformation are still felt today.

Fast forward several decades and the Shetland Gas Plant, completed in 2016, is a close neighbour to the oil terminal. At the time the gas plant was the largest construction project since the creation of venues for the London Olympic Games.

Now, as fossil fuels are replaced with renewable energy, another huge development is under way. The 103-turbine Viking Energy Wind Farm being built in the Central Mainland is set to become the largest onshore provider of renewable energy anywhere in the UK.

Meanwhile, proposals are being developed to reconfigure older infrastructure like that at Sullom Voe to create a clean energy hub. It would use onshore and offshore renewable energy to electrify offshore installations and power the production of green hydrogen on an industrial scale.

It is another example of Shetland’s ambition and desire to be at the forefront of emerging energy industries. But construction, extraction and production are not the only energy sectors where Shetland has expertise. The isles are also ideally-placed to capitalise on another burgeoning new industry – decommissioning.

A decommissioning hub

Development work is well under way to ensure Shetland is ready to embrace the opportunities in the coming decade as offshore oil platforms reach the end of their productive life.

Hundreds of platforms will have to be removed from the marine environments where they have been located for decades. Given the scale of the work that is no easy task. But Shetland has distinct natural advantages in accommodating the huge installations. The islands' location, at the heart of North Sea and West of Shetland oil and gas fields means Shetland is strategically well placed.

Not only that, the main port in Lerwick has already created deep water capacity and has the potential to add an ultra-deep-water quay to its portfolio.

Preparatory work is under way to pave the way for investment that could total around £40 million, creating many work opportunities for Shetland’s businesses, supply chain and contractors. It would also open up the harbour to bigger and more efficient vessels.

Lerwick Harbour has already welcomed one of the world’s biggest ships when the Pioneering Spirit operated by Allseas, arrived in August 2020 with the Ninian North platform on board. That decommissioning project is progressing well

An ultra-deep-water quay

The natural deep water, strong quaysides and the fact that there is plenty of space backing the quaysides makes Lerwick an ideal harbour for future decommissioning.

If the infrastructure is developed to the right timetable LPA chief executive Calum Grains is confident more lucrative work will come the harbour’s way.

Captain Grains said: “We have a vision and a strategy to build an ultra-deep-water quay. That will be the next step and would allow another type of vessel to come alongside the quay.”

Currently there are no ports in the UK that offer that kind of quayside, meaning much work is lost to Norway. With an anticipated rise in the number of platforms being decommissioned Lerwick Port Authority believes now is the time to capitalise by investing in this growing sector before it peaks in the coming years, giving Shetland the capability to compete with international yards.

“The ultra-deep-water quay would ideally need to be built by 2024/25 as it is market driven and finance driven,” said Capt. Grains.

“We are trying to work towards a timeline of 2025. There is a four-year lead-in for design and procurement works.

“There’s quite an increase in the market for anticipated decommissioning projects in 2024/25. For us to be able to capture that we would like to have the facility ready.

“It’s very much a balance for us to get the facility and having the market to use it. Too soon we won’t get the finance but wait too long and we will miss out.

“We are spending a lot of time trying to get the planning and programme for the ultra-deep quay in place.”

It all places Lerwick in a strong position.

In the short term the existing facility at Dales Voe, where Ninian North is being decommissioned, allows Shetland to accept projects far bigger than most UK ports can handle.

If the ultra-deep-water quay reaches fruition, that possibility will be amplified with even bigger, more lucrative work in the pipeline.

Capt. Grains added: “If we get the ultra-deep-water quay, Lerwick will be able to accommodate the whole decommissioning process from the small pieces to the largest.

“The ultra-deep-water quay will be 24m alongside. That’s double what we have at the moment.”

Importantly, Lerwick would be the only UK port with such capacity. That would pave the way for efficient methods to be used – cutting costs, time, and carbon emissions.

“It’s mostly to do with the types of ship used,” Capt. Grains explains. “At the moment we can take parts of platforms on a barge 8-9m depth. Or we can take a whole platform ashore on a barge.

“An ultra-deep-water quay will free up the use of crane ships to lift straight on to the quayside. We can remove the need for a barge transfer so there will be less costs; less risk; less lifting at sea and will allow Lerwick to become more efficient.

“These quays will also reduce emissions. The ships lifting at sea to the barges all use fuel. If we can have crane ships lifting that will reduce emissions.

“Closeness to the fields means less time at sea, that means less fuel so we can expend less emissions. The transition to net zero is a big thing that everybody involved in decommissioning is looking at as crucial.”

Supporting the renewables revolution

The potential environmental and economic benefits don’t stop there.

A renewables revolution is already under way, with the waters around Shetland likely to play a significant role in generating clean energy via offshore windfarms.

Currently there is no capacity locally for the immense turbine turbine towers, blades and foundation structures to be delivered, stored and prepared for installation.

New ultra-deep-water quayside infrastructure could be a game-changer for that industry, and helps explain why governments and Crown Estate Scotland are keen to play a part in securing investment.

“The ultra deep water quayside is one of the projects taken forward in the Islands Growth Deal. That’s £100 million investment of Scottish and UK governments between Shetland, Orkney and the Western Isles.”

Around £35 million is expected to come Shetland’s way in the next 10 years. The ultra-deep-water proposals are identified as one of the projects that should be taken forward.

“We are also working with Crown Estate Scotland who are very interested in being a funding partner and development partner.

“They can see the benefits to coastal areas and ports of Scotland. It’s not only for one sector. It must be more versatile than that. Our proposed quay will be deepest in the country so we can look forward to the next generation of renewables. That is where the Crown Estate are really very interested.”