Ultra-deep water port: feasibility study

1. Background

1.1 Introduction

Ernst & Young LLP (EY) was appointed by the Energy and Climate Change Directorate of the Scottish Government (SG) in May 2018 to prepare a feasibility study to evaluate the role, demand, cost, benefits and locational drivers of an ultra-deep water (UDW) port. The purpose of the study is to assist SG in identifying a potential preferred location for an UDW port and assess whether there is an economic case to support its development. For the purposes of this study an UDW port is considered to be a port with 24m of water depth directly at the quayside.

1.2 Structure of the report

The feasibility study covers the following areas:

• Section 2 Location Assessment; identifies a long list of locations for a UK UDW port, determines the criteria by which the sites will be compared and assesses the locations against the criteria establishing a shortlist to be progressed for the cost benefit analysis (CBA).
• Section 3 Decommissioning Market; provides an overview to the decommissioning market and the potential role of an UDW port.
• Section 4 Market Demand; forecasts the potential market demand for decommissioning projects in the United Kingdom continental shelf (UKCS) which may need an UDW port.
• Section 5 Sensitivity Analysis; performs sensitivity analysis on the market demand assessment.
• Section 6 Multi-use Opportunities; reviews other possible uses for a UDW port beyond oil & gas decommissioning.
• Section 7 Technical Alternatives; analyses potential technical alternatives or new contracting strategies which may have an impact on the demand for an UDW port.
• Section 8 Market Consultation; summarises the key findings from interviews with platform operators, vessel operators, port operators, potential multi-use operators and regulators.
• Section 9 Cost Benefit Analysis: performs an economic review of the potential costs and benefits deriving from a UK UDW port in the two locations progressed from the location assessment.
• Section 10 Transfer Hub: provides a high level review of how a UK UDW port could operate as a transfer hub and the potential commercial models which could be applied.

The appendices to this report provide further detail on specific areas discussed in the main body of our report.

Our scope and the principal assumptions adopted are set out in Appendix A and B respectively.