£3.5bn gas plant delivers boost to North Sea jobs

A £3.5bn gas development to the west of the Shetland Islands by French giant Total is a welcome boost to the struggling North Sea industry.

The Shetland Gas Plant will officially open today, with peak production expected to be 500million cubic feet of gas each day – the equivalent of 90,000 barrels of oil.

During the peak of its construction, the project employed more than 2,500 workers. There will be 80 permanent jobs on the plant, helping the beleaguered Shetland economy.

The new project comes amid turmoil in the North Sea oil sector as the weak oil price has led to thousands of jobs being culled.

The biggest oil giants are delaying investments, cutting spending, selling off assets and reducing jobs. It is estimated that more than 5,500 jobs have been cut already since the oil price fell 60pc from a high of $115 a barrel in the summer of 2014 to $48 today. It is also estimated that more than 65,000 indirect service jobs that were reliant on the oil industry have also been lost.

The Shetland plant processes gas from Laggan-Tormore – two gas fields deep under the sea which are more than 77 miles from the UK mainland. These are two of the biggest deepwater fields in the North Sea.

Now production has begun at the site it will produce about 8pc of the UK’s gas, supplying energy to around two million British households.

Total estimates that around one fifth of the UK’s remaining gas reserves lie in the area to the west of Shetland. The area where the development lies – under 600 metres of water – was once deemed too difficult to operate from due to weather conditions.

The project itself was delayed by more than a year due to the weather which added millions on to its costs. Construction involved removing a peat bog where the plant was built.

The Laggan field was discovered in 1986 and the Tormore field was found in 2007. Total got the licence to Laggan in 1995 and drilling in the area began in 2004.

The gas from these fields will be piped to the plant on Shetland for processing before being piped to the UK mainland into the national gas grid.

Total will run the project with Dong Energy and SSE.