Shetland to get £500m gas processing plant

A £500m onshore gas processing plant is to be built on the Shetland Islands after a deal was signed this morning at the Department of Energy and Climate Change. The […]

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By Kelvin Ross

A £500m onshore gas processing plant is to be built on the Shetland Islands after a deal was signed this morning at the Department of Energy and Climate Change.

The contract has been awarded to oil & gas facilities service provider Petrofac by Total Exploration & Production UK and Dong Energy.

Petrofac will develop the plant at Sullom Voe, which will transport gas from Total’s Laggan and Tormore fields to Total’s St Fergus Gas Terminal in Aberdeenshire. Work will start almost immediately with first gas expected from the project in 2014.

The contract was signed this morning as DECC unveiled a new round of oil and gas exploration licences, proving that the North Sea remains a vibrant location for energy players.

DECC today said that 144 licences to extract oil and gas from UK waters have been offered in the 26th licensing round.

Energy Minister Charles Hendry said: “It’s encouraging to see the healthy level of interest there is from industry to make the most of the UK’s still substantial resources of oil and gas.

“Whilst in the long-term, we want to decarbonise our energy system, we have moved swiftly to offer these licences as we must realise the optimum value from the UK’s energy resources and ensure secure energy supplies.

“We remain absolutely vigilant and determined to ensure that exploration in our waters is done safely and with minimal impact to the environment.”

The UK’s oil and gas sector currently provides around 60% of the country’s energy and brings in £30bn a year to country’s balance of trade. It is by far the largest single industrial UK investor and directly and indirectly supports over 450,000 jobs throughout the economy.

Petrofac, the international oil & gas facilities service provider, has been awarded a contract worth in excess of £500 million by Total E&P UK Limited (Total) for the development of a gas processing plant on the Shetland Islands.