Aker Kvaerner Enters PBA for Frigg Decommissioning

Aker Kvaerner has entered into a Pre Bid Agreement (PBA) for onshore disposal of the Total-operated Frigg field with the Shetland Decommissioning Company Limited (SDC), SBS Logistics Limited and Onyx UK Ltd for development and exclusive use of the Greenhead base, Lerwick.

The PBA, signed today in Aberdeen, also includes a commitment by the parties for the development of a long-term agreement.

The agreement commits Aker Kvaerner Offshore Partner and SBS to developing the Greenhead base into a fully fledged decommissioning facility, similar to the Eldøyane site in Norway. It also secures Aker Kvaerner Offshore Partner's access to important facilities in connection with the demolition and recycling of platforms from the North Sea.

"We very much appreciate the way we have been received in Shetland, and we believe this agreement will be to the benefit of all parties, but especially the Shetland Islands," says Tore Sjursen, President of Aker Kvaerrner Offshore Partner, Stavanger. "The Greenhead base will be very important to us in our further efforts in the decommissioning and recycling of platforms that have reached the end of their useful life."

Allan Wishart, Chairman of Shetland Decommissioning Company and Chief Executive of Lerwick Port Authority, comments: "This agreement with the leader in platform decommissioning is a significant step forward in the development of Shetland's role in an evolving, long-term market with its potential for employment and other gains for the islands. The participation of Onyx reflects the emphasis placed on ensuring environmental standards are met."

Decommissioning is seen as a natural extension of Shetland's involvement with the offshore industry since the 1960s and Lerwick already has a track record of providing services and facilities for this market.

The Greenhead facility will supplement the specially constructed demolition plant which Aker Kvaerner has at Eldøyane, Stord, on the west coast of Norway. Under the cooperation agreement, Aker Kvaerner's contribution will include knowledge and experience of this special branch of the oil industry. Aker Kvaerner Offshore Partner and their sister company Aker Stord have earlier removed and demolished the Odin platform on behalf of the Esso oil company from the Norwegian sector - and the 110,000 tons Maureen A-platform (Phillips UK) from the British sector. The recyling rate for the two platforms reached 98 and 99 % respectively. Some of the equipment and steel constructions were reused, but the majority was shipped to smelters for recycling.

The extensive Greenhead base is situated in sheltered waters on the east coast of Shetland where facilities include a modern concrete quay, offices, workshops and large open spaces suitable for this type of work.

There is also an established, environmentally-friendly facility that converts general, non-hydrocarbon waste into energy, which in turn supplies hot water to the heating of both the base and large parts of Lerwick.

The base is strategically located in relation to numerous mature fields on the Norwegian and British continental shelves.