Captain Ken Gray, of Cromarty Firth Port Authority, sees huge renewable energy opportunities for Scottish-based companies, but believes government needs to do more to ensure that they are not swamped by foreign competition.
He particularly wants to see a decision made once and for all about the former platform fabrication yard at Nigg. KBR, which is apparently going to reopen it for renewables-related manufacturing, has still not made a firm decision – or at least not one that is known publicly.
However, Gray is also worried about the current state of the North Sea oil&gas industry, and especially drilling activity, given the large number of rigs currently parked in the Cromarty Firth.
On the renewables opportunity, he told Energy: “We see Nigg as being an ideal centre for the development and fabrication of structures, especially for the Beatrice wind project, because it is very close to hand and we’ve broken ground already because of the demonstrator project. A number of companies on the firth were involved with that project and are keen to secure more, similar work. But what we need is for KBR to start moving on the yard. They still have a team looking at it. We understand that the company’s board in Houston are asking for more information … more clarification that there is actually work available in the future and that there is therefore a market for Nigg.”
Notwithstanding the US corporation’s years-long dithering, Gray sees opportunities for other companies to engage.
“If Nigg doesn’t progress, there’s still room for the Invergordon service base to be used for long-term operations and maintenance support. We see the base as being a good place to carry out future maintenance of windfarms as we have deep, sheltered waters, quay space, land available to that quay space and a good labour force.
“For the likes of Highland Deephaven, it’s very possible that, besides pipe spooling, it could do cable work as well.”
Gray acknowledged that the Invergordon base could do with more space to accommodate the forthcoming opportunities.
“That’s why we need to start developing and preparing; start talking in more detail to the people who are going to operate these things. We’re already getting work and we’d like to build on that. We see the Invergordon base very much as a service facility in the context of offshore wind, not forgetting oil&gas-related activities.
“However, there’s not sufficient space to do renewables construction work there; rather, it is import and marshalling of towers, blades, turbine heads and components; also the long-term maintenance opportunity.”
While there appear to be terrific prospects in terms of offshore wind, Gray is mindful of the need to care for the oil&gas industry’s needs. That said, he is also worried about the outlook as there are too many idle rigs when viewed against $70-plus oil.
He had predicted 10 rigs moored in the firth by Christmas past, and was out in his count by just one unit.
“We got nine, plus the TLP (the former Hutton tension-let platform base). For us, there’s no indication whatsoever of these rigs moving in the short term, though some will be on the move come the spring.”
Since then, the tally of stacked rigs has grown further with the arrival of the John Shaw for a period.
A plus for the firth is that many of the rigs are undergoing maintenance and overhaul work, with substantial sums being spent on some. But Gray thinks more should be out in the North Sea working for a living, not lying idle.
“The longer this downturn in North Sea exploration continues, and the more we come out of the recession we’re in at the moment, the greater the worry is that the rigs will go elsewhere, where they can find work.
“Most of the rigs here have been in the firth for eight or nine months. It’s pitiful. We have two accommodation rigs, one jack-up and all the rest are drilling semi-submersibles. The accommodation units will probably go out come the spring.
“Short-term revenues for the firth are, of course, great, but longer term, this is not good. There seems to be a lack of interest in North Sea exploration. For what particular reason I just don’t know.
“The worrying bit is that the longer this lack of interest in exploration continues, the more chance there is of these rigs finding work outside the North Sea.
“At the moment, it would indicate to me that the drilling companies think that there’s going to be employment in the future, otherwise they would have had these drilling rigs out of here and away.
“What’s out there has crews aboard, and it’s very expensive to keep them that way. However, there are two cold-stacked rigs in the firth at the moment.”
Gray added that 2009 had been a good year for the Cromarty Firth, despite the credit crunch. The combination of rigs, coupled with good performance from Ithaca’s Jacky/Beatrice asset, had helped considerably.
While the outlook for 2010 is seen as healthy, he sees subsea being on the tight side.
“For subsea stuff, there are plenty of inquiries, but mostly for 2011 work. 2010 last quarter will see things coming back a bit.
“From a port-authority perspective, 2009 was a good year, but I think 2010 will be as good, if not better.”
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