Dundee hopes to secure thousands of new jobs by “revolutionising” the oil and gas decommissioning sector.
A new public-private partnership called Dundeecom has been set up to help create an entirely new industry in the city.
Forth Ports has said bidding is already underway for some contracts and it expects activity in the sector to “increase rapidly.”
It is estimated decommissioning at Dundee port could create more than 5,000 jobs.
More than 300 North Sea oil fields are expected to cease production over the next 15 years and companies have a legal requirement to decommission rigs and other equipment.
The proposal is a key part of the Tay Cities Deal and would see Dundee supported by Montrose and Methil to create the UK’s leading centre for decommissioning.
It is believed Dundee’s proximity to Aberdeen, the capital of the UK’s oil and gas industry, gives it a key advantage over other ports in the UK.
A report to go before Dundee’s City Council’s City Development Committee next week explains that decommissioning work is often carried out abroad at great cost to the taxpayer.
As much as 70% of the cost of decommissioning can be clawed back through tax relief.
The report states: “The Port of Dundee, supported by the Ports of Montrose and Methil, can collectively provide all of the required infrastructure, land and skills to perform that role at a location which is the closest to the bulk of the North Sea with a ready supply chain and workforce to service the industry’s needs.
“Moreover, Dundeecom 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.”
In a circular economy, materials and components are re-used rather than discarded.
Dundee City Council is providing £100,000 in funding for the Dundeecom project and will work in partnership with DC Thomson and Forth Ports, who own Dundee Port.
Forth Ports is investing £10 million to upgrade the port.
Dundeecom is also set to bid for funding from the Scottish Government’s Decommissioning Challenge Fund.
The report adds Forth Ports is already bidding on decommission work.
It states: “Forth Ports are currently bidding for decommissioning contracts on the UK continental shelf and this is already beginning to bring associated work to the Port and establishing it as a future hub for the sector.
“Details of the contract bids are commercially confidential, but Forth Ports intend that this activity will increase rapidly and they are confident that Dundee Port will win significant contracts through the Dundeecom initiative.”
City development convener councillor Will Dawson said: “This is very important for the city.
“Dundee is ideally placed to become a major hub for this sort of industry.
“This would be a major industry coming back into the port and the supply chain that goes with it would bring much needed jobs to the city.
“We have been looking at this for quite some time – these plans are not a bolt out of the blue. We have known about this and have been preparing for it.
“Forth Ports are already doing a major amount of work to make sure the port is ready.”
This story first appeared on EV’s sister paper the Dundee Courier. For more from the Courier click here.
Recommended for you
Read the latest opinion pieces from our Energy Voice columnists
- So, you think that you know all there is to know about Christmas?
- Opinion: Economic reality is set to box Mario Draghi into a corner
- Opinion: The perfect time to show some spirit for the North Sea
- Opinion: Invest, innovate, initiate in 2018
- Opinion: The Arctic threat to Saudi Arabia’s grand oil bargain