Hans J Marter

30 April, 2009

SHETLAND Islands Council has vowed to step up its game after it emerged that no progress had been made almost one year after Professor Alex Kemp published his comprehensive study into the options for attracting new business to the port of Sullom Voe.

An angry Alastair Cooper, chairman of the council's harbour board, called yesterday (Wednesday) for a detailed timescale and costing of potential diversification projects to be ready for the board's next meeting in six weeks time.

Professor Kemp, of Aberdeen University, presented his findings to the harbour board in August last year, when he said that bringing gas from the newly discovered field to the west of the isles would be the safest bet to secure the long term future of the terminal.

This business has now been secured for Sullom Voe after French oil and gas giant Total announced earlier this year that it would invest around £2 billion into building a pipeline from its Laggan and Tormore fields to Sullom Voe and on to St Fergus.

The move means that £500 million is to be invested directly at the terminal where a new gas processing plant will be built, potentially securing the terminal's future for many decades to come.

However yesterday the harbour board considered options which would bring new business and revenue to the harbour at Sullom Voe, which is operated by the council, rather than the terminal.

The port is suffering from a continuous fall in profits due to the downturn of tanker traffic at the port.

Last year, the port was only able to pay £2.5 million in profits into the council reserves, rather than the £4 million projected.

Among the options for diversification discussed yesterday were the decommissioning of oil installations, creating a service point for the developing marine renewable energy industry, providing an area where wind turbines could be assembled, the storage of gas and oil as well as improved docking facilities, including a synchro lift capable of lifting vessels the size of pelagic trawlers and the inter island ferry fleet.

Head of economic development Neil Grant presented those options to the board, but Mr Cooper made no attempt to hide his frustration.

"We knew all this last year and we haven't moved forward a bit," he told the meeting.

"We need within the next cycle a timescale and how this work can be done and how much it would cost. Let's get this done; I am sure we are already losing markets," he added.

Board members were in broad agreement with his sentiments, with some however questioning whether those markets, particular in the marine renewable energy industry, had already been lost.

The board heard from Mr Grant that Orkney was benefitting from 120 new and well paid jobs due to the fact that the European Marine Energy Centre, in Stromness, was attracting high profile research and millions in funding.

"They are very envious of the facilities we have up here, the only thing that counts against Shetland is the lack of an interconnector into the national grid," he said.

Board member Jim Tait said it was vital that Shetland did a better job of marketing itself to get a share of that market, adding that an interconnector was not necessary for research and development work.

Meanwhile it emerged that the harbour had lost out on a number of potential ship-to-ship transfers of oil over recent months.

Ship-to-ship transfer is seen as a potentially lucrative new business for the port, but the industry has been slow to react to the council's marketing campaign.