UK port secures new partner to set up decom hub for North Sea oil & gas region

A business opportunity worth nearly $3.3 billion per year has prompted the UK’s Port of Sunderland, a fully connected multimodal hub for the North East of England, to forge ties with Britain’s Northern Metal Recycling to bring a new decommissioning playground into play, opening the doors to service the oil and gas industry in the North Sea.

Given the North Sea Transition Authority’s expectations for the decommissioning expenditure to hit a peak of more than £2.5 billion (almost $3.3 billion) per year in the next two decades at the UK Continental Shelf (UKCS), Port of Sunderland underlines that this represents “a huge opportunity” for the region.

With this at the forefront, the UK port and Northern Metal Recycling have joined forces by entering into a strategic partnership to establish a base for offshore recycling, buoyed by their belief that the new decommissioning hub will play a key role in helping the North East capitalize on the growing multibillion-dollar industry.

Commenting on the partnership, Jordan Bell, Managing Director of Northern Metal Recycling, remarked: “There is huge demand for the decommissioning of oil and gas apparatus and equipment and Port of Sunderland is perfectly placed to capitalise on this.

“By teaming up with the port, we will not only benefit from utilising its deep-water berths and leading-edge handling equipment, but we will also be able to take on significantly larger projects. It will open up so many new avenues for the business.”

Since Northern Metal Recycling is headquartered in Shildon, County Durham, where it operates a 15-acre, fully compliant metal recycling plant on Hackworth Industrial Park, it is believed that the proximity of the site to Port of Sunderland, and the port’s ability to transport goods by rail, road, and sea drove the firm’s decision to invest in the North Sea hub.

Bell confirmed this by explaining: “Being so close to our Shildon facility means it is not only economical, but also a lot more environmentally friendly, which as a recycling company, is something that really appealed.

“It is also perfectly positioned adjacent to the North Sea oil and gas fields, which is one of the markets we’re seeking to tap into by helping oil and gas operators with their decommissioning efforts. It just ticked all of the boxes and we can’t wait to get started.”

The new base, which will have access to 540 meters of deepwater berths, will utilize Corporation and Greenwells Quays, allowing it to handle a range of project cargos. In addition, the decommissioning facility is anticipated to reap the benefits of multiple heavy-lift Liebherr 420 cranes, two of which can perform tandem lifts of up to 240 tonnes. 

Sven Richards, Commercial Manager at Port of Sunderland, highlighted: “We are delighted to be working Northern Metal Recycling on this new decommissioning hub. Over recent years, we’ve carved out a real reputation for supporting businesses operating in the circular economy and helping bring more businesses to the region, and this is yet another great example of that.

“It’s a great success story for the port, allowing us to provide an all-round better service to our customers, and for the North East, which is quickly establishing itself as a world leader in offshore wind and green energy.”

The UK has embarked on a mission to clean up its energy act by increasingly pursuing low-carbon and green sources of supply. To this end, Britain’s new government is determined to secure green energy to make Britain a clean energy superpower by 2030. It is estimated that over £200 billion (more than $254.7 billion) can be unlocked and poured into the UK’s energy future this decade.

The Labour Party’s green power quest within the offshore energy arena does not come as a surprise but does carry a hefty price tag, which the government plans to bankroll with windfall taxes collected from fossil fuels. The tax hike is said to have affected decommissioning progress since the cost of shutting down old installations is not treated as an allowable expense.

Opponents of the oil and gas tax hike claim that the move seems to be ignoring the big elephant in the energy transition room, as many of the players producing hydrocarbons are the same companies spearheading the expansion of renewables and low-emission offshore energies, including offshore wind, hydrogen, marine energy, and the development of carbon capture and storage (CCS).

Britain has many energy plays at its disposal, ranging from traditional oil, natural gas, and LNG ones to renewables like offshore wind and solar, alongside emerging low-carbon technologies, electrification, green electricity interconnectors, etc.

However, fears are rising over the windfall tax extension’s potential to damage the overall investment case for projects across the North Sea that serve as building blocks of the energy transition’s net zero blueprint and sustainable energy future.

Do these fifty shades of green energy pursuits need to be put into play alongside open season on domestic oil, gas, and LNG plays, as many energy analysts are convinced this is the best recipe to come to grips with the triple whammy of energy security, affordability, and sustainability?