Faroe Business Report — The International Review of Faroe Islands Industry and Trade - Faroe Business Report — The International Review of Faroe Islands Industry and Trade

After eight years of successfully serving oil and gas exploration, Runavík is looking to allocate an area to which offshore will be invited so set up an international supply base for operations in Faroese and neighboring territory.

The Port of Runavík is preparing for developments of historic proportions as a behemoth submarine tunnel between the Skálafjörður area and Tórshavn draws closer to earthwork. The Port has embarked on a long-term development plan that involves the allocation a major supply base for the offshore oil and gas industry in the Faroes as well as areas adjacent to Faroese territory.

The plan, according to harbor master Jón Nón­klett, makes use of Runa­vík’s share of excavated rocks from the tunnel construction, which is expected to commence in a year or so — some 700,000 square meters of landfill material. Mr Nón­klett said in February that a few areas were being identified as candidates for a selection process and that the choice was likely to fall on some uninhabited area not far from the Skála Shipyard.

This will be the most comprehensive, long-term development program ever to be worked out for the Port of Runavík, he said. Sheltered by the longest fjord in the country, the port has seen dramatic development in recent years. A few years ago the port authority — the Municipality of Runavík — was expanded to include Skála and Skálabotnur, ranging from midway on the western coastline toward the end of the Skálafjörður fjord, in addition to the harbors at Runavík, Saltangará and Glyvrar on the eastern side of the fjord.

As synergies between Runavík and Skála are becoming increasingly visible, the number of Russian ships calling at the Port of Runavík is growing. “The advantage this port has to offer is obvious to many but there’s no doubt that the annexation of Skála into Runavík has made it easier for us to coordinate activities,” Mr Nónklett said.

With more business generated by foreign vessels docking, the Runavík is looking to increase the pace of port development.

“Whether it’s for saving fuel, taking supplies or making repairs, berthing activities are having a stimulating effect on our economy. Well, we could use some more berth space — and there’s plenty of deepwater coastline along the fjord.”

In 2001, when exploration for oil and gas took off in the Faroes, participating oil companies jointly chose Runavík for domestic supply base. To serve that purpose, a new terminal was built close to the Saltangará cargo terminal.

On another note, Kongshavn, a second deepwater quay was subsequently constructed next to the area to handle cruise passenger ships.

Mr Nónklett added: “The experience we’ve gathered in the last eight years is important for our future development — regardless of whether or not exploration in the Faroese will prove successful. Operators have been impressed with the level of efficiency and service at the Atlantic Supply Base, including the performance of their main partner Faroe Ship and the Port itself.”

With the Skála Shipyard building a second offshore support vessel in the course of little more than a year, the general awareness of the oil and gas industry is increasing markedly.

With years of experience in the merchant navy and with a master mariner degree, Mr Nónklett is himself able to contribute to the new Port Development Program being drafted, taking awareness of the offshore industry as a priority market to a new level.

“There will be a number of elements in the Program,” he noted. “For instance when it comes to cruise tourism, which we expect to grow in particular when the tunnel between the Skálafjörður and Tórshavn has been completed, we’re looking at areas close to town to accommodate passengers. As to the future supply base for the offshore industry, we’ll be allocating a large, non-inhabited area along the coast, relatively close to the shipyard.”

Mr Nónklett pointed out that offshore operators will be likely to consider the distance to the nearest land, which will be the Faroes as far as concerns several activity centers. However, he said, the Port Development Program is a long-term plan and a number of conditions will have to be met before any such supply base project can be considered in detail.

“We’re talking about a major supply base for the oil and gas industry in and around Faroese territory. Of course, several stages need to be completed before reclamation work can even begin and there are legislative issues as well. At a later stage, we’ll start inviting major players in the UK, Norway and elsewhere to consider setting up an international supply base here.”

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