A jobs boost is on the way to Tyneside after an engineering firm secured a multi-million pound contract.
The OGN group, which currently employs around 1,000 workers at its site in Hadrian Yard, Wallsend, North Tyneside , has signed a contract with international oil & gas giant ConocoPhillips.
It is understood the firm beat off competition from around the world for the work.
More than 500 of its workers will be involved in the 16-month project, which will see around 170 new jobs created. Around 25% of the work will be sub-contracted to smaller engineering firms in the North East.
Last night, it was confirmed that Wallsend-based Barrier Group, a coatings specialist, would be one of the firms to benefit. It will create more than 20 jobs.
Last week The Journal revealed a contracts delay was hitting firms in the offshore industry, with OGN among those losing out. A row between the Government and major energy firms over the nature of tax incentives has slowed down the number of new deals being agreed. While the company is, like others, still waiting for next year’s major fabrication tenders to be announced, the latest jobs news will come as a welcome boost.
OGN will build a piece of kit known as a module which weighs more than 800 tonnes and will be installed on the side of the Britannia Bridge Linked Platform (BLP) to act as additional storage for platform equipment.
Craig Melville, OGN’s chief commercial officer and deputy chief executive, said: “This project demonstrates the continuing role the North East of England has to play in the UK oil & gas industry.
“The region’s expertise in oil & gas is world-renowned and contracts such as this from a major global operator prove that the North East still has much to offer the sector.
“The reason for the module is because when you’re out at sea you only have a certain amount of floorspace, so it’s form of extension which will house equipment which will be used to process the oil and gas from a new reservoir discovered in the Alder field.”
He added: “It’s fantastic news which will keep the continuity going for us here at the yard because some of our contracts are completing this year and we’ll have a rundown of labour on those jobs.
“Because this is a new contract just starting, rather than paying people off, they can continue their engagement and move on to the new contract work now.
“We expect about a third of the 500 will be new jobs. We aim to sub-contract about 25% of the work regionally, which will include the scaffolding, painting, pipework, fabrication and some electrical installation work.”
This is the second major contract win secured by OGN. Last year the group won a contract with EnQuest to undertake finishing and commissioning works on the EnQuest Producer, a 249m-long Floating Production, Storage and Offloading (FPSO) vessel. David Edwards, chief executive at OGN, said: “We are exceptionally proud to have been awarded this prestigious contract from such a well-respected, ‘blue chip’ oil & gas operator. It is a further endorsement of the expertise and experience that the UK oil & gas supply chain can offer the industry.”
Michael Fallon, Minister of State for Energy, said: “This multi-million pound deal is a fantastic boost for manufacturing on Tyneside.
“It will create outstanding job opportunities for local people and support national growth. British skills and expertise in the oil and gas industry are second to none and this deal just shows how attractive the UK remains to investors.”
As reported in The Journal, North East oil and gas cable-maker Duco Ltd is also working on a £250m contract to manufacture the subsea technology for the North Sea project. It expanded its workforce by 100 to 600 last year.