An Inverness fuel supplier said yesterday it expected its income stream to be more steady in future after opening a fuel terminal at a Scottish port.
Highland Fuels will provide nearly 660,000 gallons of storage at Montrose Port as part of a near-£10million redevelopment of the Angus harbour.
Montrose Port Authority invested £8.5million in creating a deepwater berth, which is expected to attract vessels supplying North Sea oil and gas fields.
George Shand, managing director of Highland Fuels, said the deal with Montrose Port would offset the seasonal nature of the company’s core business of selling kerosene.
He said he expected a run rate of at least 100,000 tonnes of marine gas oil per year at Montrose.
Mr Shand said: “Montrose did not have a fuel offering and we are putting in some new pipework and recommissioning some fuel tanks to help the port attract more oil and gas businesses.
“We see it as a non-seasonal business, which should balance our offering quite nicely.
“The kerosene is up and down depending on how cold the weather is. This is a high-volume, low-margin business, but it is a steady income stream.”
It comes after Highland Fuels reported turnover increased by 3.8% to £180.2million last year, but pre-tax profits fell to £2.1million from £2.9million previously because a mild winter led to falling sales volume. Mr Shand said yesterday the company wanted to spread its risk, adding: “There does not seem to have been a recession in the North Sea.”
“In a low oil price we sell more kerosene because it is more affordable, but in a high oil price the benefit is that the North Sea business booms and hopefully this new facility will give us another opportunity to benefit from that.”
John Paterson, chief executive of Montrose Port Authority, said he was pleased that Highland Fuels was partnering the harbour. He said: “There is big demand for fuel, particularly after we opened the deep water berth last August.
“Since then we have tripled the number and quadrupled the tonnage of oil and gas supply vessels using the port.”