Lerwick Harbour defies North Sea gloom to announce £12m quay contract

Plans for significant further expansion of Lerwick Harbour’s extensive deep-water facilities for the offshore oil and gas industry have advanced with the award of a major contract to extend the quay at Dales Voe South to support subsea developments and decommissioning.

Lerwick Port Authority has commissioned the Scottish business unit of civil engineering contractor BAM Nuttall as main contractor for an £11.95 million investment to lengthen the quay to 130 metres. Part of the Dutch construction group Royal BAM, BAM Nuttall specialises in complex marine construction, with a strong track record working around Scotland and on the Western and Northern Isles.

Lerwick has been servicing the offshore industry for over 50 years and now also has an established reputation as a location for decommissioning. The extended quay will provide deep-water, versatile berthing and heavy load capacity to take an offshore structure in a single lift, with a substantial, expanded laydown area.

Captain Calum Grains, Port Authority Deputy Chief Executive and Harbourmaster, said: “The contract marks an important step in further developing Lerwick’s role as a leading centre of offshore industry operations. Dales Voe South is another value-added expansion and reflects our confidence in future activity, including ongoing subsea projects, particularly west of Shetland, and the developing decommissioning and offshore renewable markets.”

As previously announced, the Scottish Government and agency, Highlands and Islands Enterprise, are providing £2.39 million in grant for the project, with Bank of Scotland supporting the Port Authority’s investment.

Work will begin in April, with completion due in April 2016. At peak, BAM expects up to 40 people to be employed directly in the construction of the new facility, with wider benefits spreading to local suppliers and subcontractors.

Commenting on the contract award, BAM Nuttall’s Business Unit Manager for Scotland, Dougie Grant said: ‘We’ve been tracking the proposals for Dales Voe for over a year now and we’re delighted to have been chosen by the Port Authority as their construction partner. We understand the positive impact this scale of investment can have locally and we look forward to engaging proactively with the Shetland community to ensure this benefit is fully realised.”

Civil Engineers, Arch Henderson LLP, is responsible for design and project management of one of the largest infrastructure developments in recent years in the Port Authority’s on-going programme.

The contract will extend the quay by around 75 metres, with a load-bearing capacity of 60 tonnes per square metre, making it unique in Scotland. It will have 12.5 metres water depth alongside, like the existing quay, amongst the deepest of its type in Scotland. The sheltered voe, located between oil basins east and west Shetland, has 24-hour access to the North Sea.

The extension will be complemented by increased, adjacent laydown for equipment and materials. A phased expansion underway in recent years will total 45,000 square metres by 2016.

Lerwick hits half-century of oil related work

This week marks a milestone for Lerwick Harbour in its involvement with the North Sea oil and gas industry.

Fifty years ago, two seismic survey ships operating east of Shetland sought shelter in the port - and they are believed to have been the first oil-related vessels to call at the start of Shetland's transformational and ongoing relationship with the industry.

1964: The Dutch seismic survey ship Runmond III

The Shetland Times of Friday 3 July 1964 reports that vessels, Cedar Creek from the USA and Runmond III, from Holland, surveying for Western Geophysical on behalf of a British ‘petroleum’ company, had been stormbound in Lerwick the previous weekend (27-28 June). They later headed for Norway.

This year also marks the 50th anniversary of the UK Government’s passing of the Continental Shelf Act, the First Round of Licensing of blocks for exploration and the first well drilled.

The first wells were drilled east of Shetland in 1971 and a first well to the west in 1972. The impetus for a major role for Lerwick Harbour came in the 1970s with the development of East Shetland Basin fields, including Brent and Ninian.

Lerwick Port Authority Harbourmaster, Captain Calum Grains, explained: “Oil-related vessels weren’t recorded separately from general ships through the 1960s. Only with increasing activity in the ‘70s were they categorised and counted by their types.

“Research by our staff and recollections from the then shipping agent at Hay & Co led to these two vessels which are believed to be the first oil-related ships into Lerwick.

“By way of comparison, Cedar Creek, at 151 gross tonnes, is around the size of the port’s current vessel, Kebister. The then fairly new stern trawler, Runmond III, at 241 gross tonnes, is comparable to a modern local white-fish vessel. Seismic ships now calling at Lerwick can be significantly larger - some Ramform vessels weigh in at over 10,000 tonnes.”

Since oil vessels were first categorised in the port’s records in the 1970s, around 40,000 have called at Lerwick which developed as a leading support centre.

Captain Grains added: “No-one could have guessed then what these two vessels heralded for Shetland in oil and gas activity and the impact on the economy and community over the next five decades. Or that, 50 years on, development would still be continuing onshore and offshore, with years of production to come – and that we would still be investing in the port to make the most of more new opportunities.”

2014: The Ramform Challenger

The offshore industry is a major beneficiary of investment by the Port Authority which is proposing to spend another £30 million-plus in the next few years. Development over the decades means Lerwick now has almost 4,000 metres of quay, including over 1,300 metres of deep-water berthing, and 130,000 square metres of laydown.

Future capital projects will include another 1,800 metres of quay.

Bright forecast between Met Office and North Sea oil and gas industry

Oil & Gas UK health & safety director Robert Paterson says weather data reports, obtained from over 104 oil and gas platforms and mobile installations across the North Sea in real time, enable forecasters to predict and analyse weather patterns more accurately and provide bespoke  forecasting advice.  “Helimet is an internet-based weather data network originally designed to share data between UK offshore installations and helicopter operators. This collaboration is a great example of how cutting edge data technology, driven by the oil and gas industry can be of great value to other areas.” Mr Paterson said.  Helimet uses a network of automated weather stations located on offshore oil and gas platforms and mobile installations. They provide detailed reports of cloud, visibility and weather and in some instances, information of wave conditions. These data are fed into a network allowing more accurate definition of the weather across the North Sea, an area prone to adverse weather conditions.   “The safety of the offshore workforce is the absolute priority for the offshore oil and gas industry. Up to date and accurate weather forecasting allows the managers of installations in the North Sea to operate in a safe environment and the helicopter pilots to fly as safely as possible.“ He added.  CHC Helicopter’s regional flight operations manager Jon Hopkinson says tracking and evaluating weather is critical to the helicopter operator’s daily operations. “This system provides up-to-the-minute weather data. This analysis is an important part of the thorough flight planning each pilot does before every flight, across all of our UK operations.” Mr Hopkinson said. Met Office Metocean Advisor John Mitchell says data from Helimet makes a significant contribution to the Met Office’s ability to accurately monitor and provide weather advice.  “Accurate guidance is critical to the safe and efficient operation of not only the oil and gas industry but also the wider offshore renewables, shipping and aviation activity. In addition, coastal communities will benefit through the more accurate analysis of wave activity and potentially damaging surge events as recently experienced along the east coast of England.” Mr Mitchell said.

RWE Dea UK acquires licence shares for blocks west of Shetland

RWE Dea has signed an agreement to farm-in to Licences P1932 and P2074, which will allow the company to participate in the drilling of the Mustard prospect in the UK Continental Shelf (UKCS), West of Shetland. The well is planned to spud in 2015.

The UK subsidiary of German oil company RWE Dea AG is acquiring a share of 25% from Chrysaor CNS Limited in blocks 202/4, 202/5, 203/1a, 205/26c and 205/27. Mustard is an Upper Jurassic prospect located in the East Solan Basin in the UKCS West of Shetland.

"Mustard will fit perfectly into our expanding portfolio of North Sea and West of Shetland assets and we are looking forward to being part of this exciting opportunity," explains Dirk Schoene, Managing Director of RWE Dea UK. The licence area will build upon Licence P2018, which RWE Dea has been awarded in the UKCS 27th Offshore Licensing Round, and its acquisition of an interest in the Handcross prospect (Licences P1631 and P1832) in April 2013. A first exploration well at the Mustard prospect is planned to be drilled in 2015.

On the UK Continental Shelf, RWE Dea holds an attractive portfolio of producing, development and exploration assets in the Southern, the Central as well as in the Northern North Sea.

The farm-in agreement will be effective as of January 2013 subject to approval from Department of Energy & Climate Change of the UK Government.

Licensees P1932 and P2074:

• RWE Dea UK: 25%
• Chrysaor (operator): 75%

Delays and doubts announced over two oil developments off Shetland

In two separate announcements today, oil giant Chevron cast doubt on the viability of its $10bn Rosebank development west of Shetland, and Norwegian state company Statoil postponed $7bn of work on the Bressay field in the North Sea UK sector.

Chevron stated that Rosebank  “does not currently offer an economic value proposition that justifies proceeding with an investment of this magnitude", though it was still working with  partners OMV from Austria and Denmark's Dong Energy to make the project work economically. A final decision is expected next year.

Statoil is looking at simplified methods of extracting the Bressay field's heavily viscous oil. 

Both projects offer extreme technical challenges.

Read the full Chevron story courtesy of The Telegraph here, and about the Statoil announcement here, via Invezz.

New North Sea oilfield could bring many Shetland benefits

A £4 billion development in the North East Shetland Basin, the Kraken Field, has been given Government go-ahead and is likely to be a major source of business for Lerwick Port Authority. Full Shetland News story here.

New technologies making marginal fields viable - report

A new report from accountancy firm Deloitte shows that drilling activity in the North Sea 'remains steady' and that innovative technologies mean developments previously not considered economically viable are now beginning to provide real prospects.

BBC report here: http://www.bbc.co.uk/news/uk-scotland-scotland-business-23363783

Super Pumas back in the air?

A solution to the 'potentially catastrophic' gearbox failure in the North Sea's fleet of Eurocopter EC225 Super Puma helicopters has been identified by the European Aviation Safety Agency (EASA), which  has published an airworthiness directive. The machines could be flying again relatively soon.

Read Frank Urquhart's Scotsman story here.