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Decommissioning in Dundee: The Tay Cities Deal

2 Jul 2018
Laura Brownhill

Oil and Gas Decommissioning in Dundee

The recent announcement at the Dundee Economic summit about the Tay Cities deal being completed in the next two months has generated a lot of excitement in the public and business communities.

The Tay cities economic region, which consists of Angus, Dundee, Perth & Kinross and North East Fife, has the potential to be one of the most productive, socially and economically prosperous, knowledge led economies in Europe – this isthe motivation behind this collaborative deal.

The successful implementation of the deal’s 10-year program will ensure the region fulfils its potential for the people who live and work there; enabling  businesses to grow, attracting inward investment, broadening and strengthening the local economy, and delivering improved and measurable outputs at regional, Scottish and UK levels.

The deal not only seeks to benefit the 500,000 residents of the region and 15,500 businesses that operate in it, but also create up to 15,000 job opportunities over 10 years, significantly enhancing the employment landscape in the region.

The Decommissioning industry in Dundee

The Tay Cities Deal submission document includes more than 50 projects involving key industries such as engineering, food and drink, life sciences, healthcare, tourism, digital technologies, energy, and financial services.. There is also a scheme to boost employment through oil and gas decommissioning.

In order to build a world class oil and gas decommissioning industry in the region, the Tay cities deal aims to:

• Generate additional Gross Value Added (GVA) of between £163m and £228m;

• Maximise decommissioning spend within the UK;

• Deliver cost savings in the decommissioning process; and

• Develop exportable skills and knowledge.

The submission document states that the port infrastructure in Dundee, Montrose and Methil, combined with the business expertise across the area, can help in developing this region as the UK’s leading hub for the decommissioning sector.

To capitalize on the supply chain opportunities created by decommissioning operations in the North Sea, Project Dundeecom -  a new private-public sector partnership - has been launched to  establish the Port of Dundee as a leading center for oil and gas decommissioning in Scotland.

Dundeecom, which is a key proposal of the Tay Cities Deal, brings together the main ports in the area with the councils and proposes to establish the region as a multidisciplinary, internationally recognised Centre of excellence in the practice of, and research into, oil and gas decommissioning. It is estimated that decommissioning at Dundee port could create 5,500 to 7,500 jobs in the area.

Dundeecom not only seeks to create an entirely new industry in the city of Dundee, but also offers the opportunity of a ‘blank page’ to completely revolutionise the decommissioning sector; first by adopting a circular economy approach (rather than mere recycling) and, secondly, by creating a bespoke supply chain which adopts new streamlined processes with resultant savings to the UK taxpayer and efficiencies to North Sea oil operators.

Dundee has been making steady progress on the decommissioning front, the most recent success being a deal with the China Ocean Engineering Shanghai Co (COES) who will be establishing their decommissioning project base for UK operations in Dundee.

This news follows a series of announcements and investments in Dundee’s decommissioning infrastructure, including a £10 million quayside extension, construction of a heavy lift equipment, an MOU with Wellsafe Services, and a formal agreement with AF Offshore Decom.

Talks are also underway with the city’s colleges and universities create apprenticeships to support the decommissioning sector in the city.

Conclusion

The decommissioning expenditure on the UK continental shelf alone is estimated at £17 billion, covering the period through 2025. In such a scenario, the Tay cities deal offers a solution for a better economic future through its proposals to lower the costs of decommissioning operations, increase the efficiencies of North sea operators, and support eco-innovation in the oil and gas decommissioning sector.

Author

Laura Brownhill
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