Hans J Marter

30 January, 2009

SHETLAND Islands Council is to bump up charges at the Sullom Voe oil port by 17 per cent to compensate for the loss of business due to a five month shut down of the oil production vessel Schiehallion this summer.

Last summer Schiehallion was off stream for three months when scheduled maintenance work took five weeks longer than initially planned.

Now a second extended shutdown later this year has just been confirmed by BP, a move which will have a negative impact on the SIC's future spending power.

A company spokesman said yesterday (Thursday): "We have advised Shetland Islands Council that production from Schiehallion will be shut down for an extended period of maintenance activity during 2009.

"This is to allow a number of essential modifications to take place to the vessel's water ballast tanks, which will require a large part of the summer season to complete."

He said the down time would be an estimated four to five months, adding that rumours the vessel had to be taken to a shipyard were untrue.

On Monday, a meeting of the council's harbour board will hear that the authority earned just £2.35 million from operating the port, more than £1.6 million less than it had originally budgeted for.

In order to achieve the same result in 2009/10 councillors are being asked to approve an increase of 17 per cent in oil related harbour dues, taking them to £0.84 per gross tonne.

The move has been criticised by Sullom Voe Terminal manager Lindsay Boswell who is reported to have told a meeting of the harbour users panel, earlier this month, that the increase above inflation was "very unwelcome and unhelpful" at a time oil prices had come down.

He called on the council to review their proposals before Monday, but was told by harbour board chairman Alastair Cooper that the council was forced to set these charges in "isolation" after senior officers had been unable to see any future plans for the terminal.

Mr Cooper added that it was "inappropriate for Mr Boswell" to link harbour charges to the currently low oil prices because there had been no offer to pay higher dues when oil prices were high.

All profits generated by Sullom Voe port operations go into the council's reserve fund, which is used for capital projects and economic development in the isles.

Oil from Schiehallion is imported by the shuttle tanker Loch Rannoch in to Sullom Voe for export worldwide. Schiehallion accounts for between 30 and 40 per cent of business at the port.

Harbour dues for non-oil related business are set to be increased by three per cent.