Energy giant BP has confirmed plans to fund a new gas pipeline at the Sullom Voe terminal.
The 0.8 mile long connection will link the Shetland facility with the SIRGE pipeline, which effectively connects the Shetland Gas Plant (SGP) and the St Fergus gas terminal, Aberdeenshire.
If the projects gets off the ground, it will provide a more direct route to market for gas from the west of Shetland, including the Clair field.
But its understood BP (LON: BP) is still considering its options with regards to the continued export of oil from the region to Sullom Voe.
Commercial discussions have been going on with terminal-operator EnQuest (LON: ENQ) for a number of years and there are fears the London-listed supermajor could opt to bypass Shetland.
According to BP, the planned gas pipeline would provide a “new connection” between existing systems, bolstering “security of supply” from the west of Shetland.
As well as creating an “additional long-term export route” for gas from the Clair field, it would also serve other projects in the region.
A planning application has been lodged with the Shetland Islands Council by North Sea Midstream Partners (NSMP), which would build, own and operate the pipeline.
The submission also covers above ground facilities.
Depending on approval time, work on the new pipeline could kick off next year – start up is being targeted by the end of 2024.
A spokesman for BP said: “BP, on behalf of itself and its Clair field co-venturers Shell, Harbour Energy and Chevron, can confirm plans to fund a new gas pipeline on Shetland.
“The pipeline, which would be built, owned and operated by North Sea Midstream Partners (NSMP), would be installed between the Sullom Voe Terminal and the existing SIRGE pipeline and provide a new connection between existing independent pipeline systems, assisting in the protection of security of supply of west of Shetland gas to the UK gas market.”
“In addition to creating an additional long-term export route for gas from the Clair field, the new pipeline would be sized to accommodate gas production from other west of Shetland developments.
“NSMP has submitted a planning application for installation of the 1.25-kilometre pipeline and associated above ground facilities to Shetland Islands Council for its consideration.
“Approval of the planning application is a critical step to enable construction to commence in 2023, with the pipeline targeted to be operational by the end of 2024.”
© Supplied by Guillaume PerrinFor the last few years BP has been mulling over whether or not to keep exporting hydrocarbons from Clair to Sullom Voe.
EnQuest, which took over operatorship of the terminal from BP in 2017, has been locked in negotiations with the oil giant in an effort to convince it to keep using the facility.
It is feared that if BP doesn’t commit its long-term future to the terminal, Sullom Voe could close as soon as 2025.
EnQuest has been contacted for comment.
The SIRGE pipeline system runs from the TotalEnergies operated SGP at Sullom Voe to a subsea tie-in on the NSMP-owned FUKA pipeline, which links to St Fergus.
Ineos (18.26%), Chevron (7.18%) and Siccar Point Energy (7.52%) all have a stake in the facility, which allows for the export of gas from West of Shetland to the UK mainland.
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