Innovative proposal for Nigg
29/06/2010
Powerful group's radical plan for yard ownership
A powerful group of Scottish businesses has produced a radical plan to re-open Europe’s finest fabrication yard, capturing multi-million pound new energy sector opportunities and potentially creating thousands of new jobs.
Revival of the mothballed Nigg fabrication yard in Easter Ross, whose workforce once peaked at more than 5,000 people but now lies almost unused, has been thwarted by the cost and difficulty of public purchase and by daunting land lease conditions.
Now the group of businesses, who between them employ around 400 people in the Highland region alone, have drawn up an innovative proposal to change the yard’s ownership without public capital outlay, while overcoming the lease conditions barrier.
They plan to form a non-profit body to take on the 165-acre yard from US industry giant KBR at a nominal fee. KBR’s weighty long-term lease obligations to co-owners the Wakelyn Trust would also be addressed by the new body.
The businesses, all deeply experienced in aspects of the energy sector from drilling rig, offshore platform, subsea and renewables work to supply base and marine services, would then develop the yard’s operations. These would include rig maintenance, upgrades and survey work, in one of Europe’s biggest dry docks. There could also be manufacture and fabrication of subsea pipelines, offshore wind and marine energy structures, the decommissioning of offshore oil and gas structures and the provision of storage, and the handling and supply base facilities and services.
The yard revival group has had preliminary discussions with Highland Council members and senior staff, KBR’s representatives DTZ, and politicians including the area’s MP John Thurso and MSP Jamie Stone.
A spokesman for the yard revival group said: “We have had positive responses from all these powerful quarters and we are now moving ahead to formalise the plan, including the costs and timelines for setting up the non-profit body and co-ordinating progress.”
Formed as a sub-group of the Cromarty Firth Port Users Association (CFPUA), the group includes Port Services Group, Nicholson Engineering Services, Oilscaff, Intech Power and GQ training.
A formula would be developed for commercial revenue contributions, through the non-profit body, to be reinvested in the yard’s facilities and to meet the future lease liabilities.
John Thurso, MP for Caithness, Sutherland and Easter Ross said: "Nigg yard is a vital asset which needs to be in operation now to take advantage of the many opportunities which are coming from marine energy investment and from ongoing sub sea operations in the oil and gas industry. In use it will sustain enterprise and create local jobs and wealth. Leaving it mothballed must not be an option.
"I therefore welcome the initiative by CFPUA to put the yard back into use. This proposal by a group of well-established local companies who have extensive experience in this kind of operation is imaginative and well conceived and, if successful, will be a significant boost to quality employment in Easter Ross. I will therefore assist in any way I can in helping to turn this sound concept into reality."
Ian Couper, Chief Executive of the North Scotland Industries Group (NSIG) said: “The NSIG has been advocating and pushing for the re-opening of the Nigg facility on a multi-user basis for some time, and any proposal that takes this forward will meet with our approval. It is important for local businesses and the wider economy of the north of Scotland that Nigg is brought back into use at the earliest opportunity, to meet the demands for such a facility from various strong interests in oil and gas, and renewable energy markets.”
Previous approaches to get the yard back into use have been stalled by issues including the site’s shared ownership, between KBR and the Wakelyn Trust, whose lease condition requires costly reinstatement of part of the yard – including the dry dock – to dunes by 2031.
Proposals have included direct public ownership; compulsory purchase by Highland Council working ‘back-to back’ with a private company; re-development by KBR themselves; and alternative development by other private sector interests.
Highland Council last year finalised a ‘masterplan’ for multi-use redevelopment of the yard, opened in 1972 to serve the oil and gas sector, mothballed more than three decades later and put up for sale by KBR in 2006. This envisaged creation of at least 1,000 jobs and a multi-million pound economic boost for the Highlands and Scotland.