Rowley warns of risks of spending on dedicated UK disposal site

Decom North Sea interim boss Will Rowley warned splashing cash on a dedicated UK disposal facility for oil production ships like Curlew would come with “significant risk”.

Gauging the timing of disposal projects to make sure yards are kept consistently busy is a “real challenge”, he said.

Floating production storage and offloading (FPSO) vessels are not always immediately scrapped once they come off a field as they can be upgraded and go on to produce from other reservoirs, or even be converted into tankers.

It is understood Shell wanted the Curlew dismantling work to be carried out at an EUapproved ship recycling facility, of which there are just four in the UK. Only the dry docks at Able on Teesside and Harland & Wolff in Belfast can accommodate Curlew.

AF Gruppen’s yard in Vats, Norway, does not have a dry dock but is an EU-approved ship recycling facility. It benefits from an ultra-deep-water harbour capable of hosting heavy lift crane vessels which can lift platform sections directly onto the quay.

The Conservative Party said in its 2017 election manifesto it would work with industry to create the UK’s first ultra-deep water port, while the Scottish Government backed Lerwick’s candidacy in 2018.

A feasibility study by EY in November 2018 said an ultra-deep water port could target £583 million of estimated expenditure for onshore recycling and disposal activities, which made up a mere 2% of total decommissioning costs.

Mr Rowley said he was unaware of any evidence or studies which definitively made or dismissed the business case for an ultra-deep-water port or dedicated FPSO disposal facility in Scotland. But the skills and expertise which create real value for companies and are “exportable” are linked to dismantling topside plant, rather than hulls, he added.