Pressure mounts for clarity on £50m gas contract

North Tyneside MP Mary Glindon is says North East has received the 'crumbs' of a major North Sea gas contract awarded to Heerema

Heerema Fabrication Group in Hartlepool
Heerema Fabrication Group in Hartlepool

A North East MP is calling for transparency over the extent to which the region will benefit from a major contract relating to Maersk Oil’s Culzean gas project.

In press releases sent to The Journal, both Maersk and Heerema Fabrication Group said the contract for the wellhead platform jacket and associated infrastructure - thought to be worth £40m-£50m - had been awarded to Heerema’s Hartlepool yard.

However, the jacket and piles are being built at the company’s yard in Vissingen in the Netherlands, with Hartlepool only manufacturing the wellhead access deck and access ways. No jobs will be created.

Neither Maersk nor Heerema would confirm the value of the work, or specify exactly how much each yard would benefit, but after repeated requests for further information, a Heerema spokesman said: “The percentage of work going to the Netherlands will be higher than the percentage going to Hartlepool but there will be a benefit for the Hartlepool region as well, including the effect thereof on the local economy”.

The news comes in the midst of an ongoing debate over the UK’s contribution to the new wave of investment in the North Sea, with many concerned the North East may miss out on contracts worth hundreds of millions of pounds.

Also in the running for the Culzean work was the North East’s only other fabrication yard within the sector, OGN Group, the chairman of which, Dennis Clark, has petitioned the Government for more than three years on the issue.

North Tyneside MP Mary Glindon - a member of a cross-party oil and gas group set up to influence oil companies towards awarding contracts to UK firms - said she understood Heerema Hartlepool’s portion of the Culzean work was “very small” in comparison to the Netherlands.

It was frustrating, she added, that the Government seemed happy to give oil and gas companies tax concessions, but still appeared unable to secure jobs for British fabricators, with the North East having been “thrown some crumbs” in this major project.

“While I’m glad Heerema Hartlepool has got something from it, it’s a concern a North East company has put a bid in and not won the contract,” she said.

“The oil and gas group has invited Maersk to its next meeting to speak to us face-to-face about this contract and about getting British content into the Culzean project.

“Another question I’ll be asking concerns why such a big deal has been made about giving part of this contract to the UK, when in fact it seems to be quite a small part of the contract.

“It seems it has been over-egged and we need to question them on that.”

Terry Telford, GMB shop steward at OGN, likewise suggested the award of some work to Hartlepool was to show “they will give the North East the crumbs from the table”.

Losing out such contracts, he added, had a detrimental impact on the OGN’s drive to train up skilled apprentices for the future.

“This is the last of such facilities on the Tyne, which has a proud tradition of this work,” he said.

“For some reason, we give the family silver away and then say we haven’t got the capacity here.”

The ultra-high pressure, high temperature Culzean field is situated in the UK sector of the North Sea, approximately 200km east of Aberdeen. Construction work is due to start in January 2015 for completion in March 2016.

The project has the potential to meet around 5% of UK gas demand by 2020/21.

Koos-Jan van Brouwershaven, chief executive of Heerema Fabrication Group, said: “Having been able to secure this work for a UK based company is of great importance.

“Heerema Hartlepool is a reputable and reliable UK-based contractor located in the North East.

“Heerema Vlissingen is specially equipped for the execution of jacket constructions and has an impressive track record.”

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