PURPOSE OF REPORT To provide an update on the Report prepared by consultants GL Noble Denton regarding the Stornoway LPG Plant; the related safeguarding zones; and works that may reduce the scale of the safeguarding.

COMPETENCE

1.1 There are no legal, financial or other constraints to the recommendations being implemented.

SUMMARY

2.1 The Report provides a summary of the report prepared by GL Noble Denton who were commissioned to review the potential of on site works to reduce the impact of the safeguarding zones around the Stornoway LPG Plant, which is attached as Appendix 1 to this Report.

2.2 The Report considers the content of the GL Noble Denton report and makes a recommendation as detailed below.

RECOMMENDATION

3.1 It is recommended that the Comhairle note the outcome of the study and the conclusion of

this Report which considers that, currently, the cost of the required works would not result

in significant benefit to the development opportunities within the safeguarding zones.

Contact Officer Keith Bray Tel 01851 822690

Email kbray@cne-siar.gov.uk Appendix GL Noble Denton: Land Use Planning Zones Around the Stornoway LPG

Plant (November 2012) Background Papers: None

SUSTAINABLE DEVELOPMENT COMMITTEE: 20 NOVEMBER 2013

STORNOWAY LPG PLANT – CONSTRAINTS AND OPTIONS – UPDATE

Report by Director of Development

BACKGROUND

4.1 Due to safeguarding zones imposed by the Health and Safety Executive (HSE), there are constraints on development for certain land uses within an approximate 500 metre radius of the Stornoway LPG Plant at Sandwick Road. The constraint is represented by a set of three concentric rings termed the Inner, Middle and Outer safeguarding zones. Development within these zones which requires planning consent is managed via consultation with the HSE through the PADHI system (Planning Advice for Developments near Hazardous Installations). The Comhairle, as Planning Authority, must take these zones into account when considering development proposals in the vicinity of Stornoway LPG Plant.

4.2 The PADHI system provides responses to development queries based on a series of assessment criteria relating to aspects of development which the HSE considered pertinent in assessing the sensitivity or otherwise of a proposed building or land use. The scale of the development is also considered as part of the process, as well as whether the proposed development relates to an existing use or whether it is a change of use. The range of criteria can provide for a wide variety of outcomes on development proposals, dependant on the situation within or straddling sensitivity zones; the use being indoor or outdoor; access by members of the public to the development; whether residential accommodation is proposed; and the overall scale of the development. PADHI is an electronic system which is updated to reflect the current HSE assessment criteria, and as such it is impossible to ascertain a generic likely response to different development types. PAHDI operate a free pre-application consultation system, delivered through the local authority Planning Service.

4.3 A previous undertaking, the Stornoway Bulk Cargo Import Study (2004), explored the scope for relocating the import of a range of bulk cargos and storage of Hazardous Substances from Stornoway town centre, including the relocation of the gas storage tanks, to a site adjacent to Arnish. This study considered the long-term suitability of Stornoway Harbour’s No.2 Pier as a facility for the bulk import of coal, cement, road salt etc and as the town’s only facility for offloading of road / heating oil and LPG prior to storage at James Street Depot and Stornoway LPG Plant respectively. The driving force behind the study was a growing recognition that No.2 Pier was nearing the end of its operational life and that the ‘freeing up’ of the constrained area would enable regeneration of the Newton area, the original industrial part of Stornoway, and potentially allow future expansion of the town within its current boundary. For a number of reasons, including significant costs, the study has not been progressed.

4.4 Prior to the Stornoway Bulk Cargo Import Study process, Transco, then operators of Stornoway LPG Plant, explored an option to relocate LPG offloading and storage to the disused NATO jetty in the village of Holm near Stornoway Airport. Transco identified resources to put towards this relocation, but the associated European Regional Development Fund (ERDF) Structural Funds application failed, and the project could not proceed. Transco then invested its resources in mounding (partially burying) its two largest (220 tonne) gas vessels (Vessels 4 and 5) at Stornoway LPG Plant. The 102 tonne Vessel 3 remained above ground and operational. In terms of site inventory, Vessels 1 and 2 were emptied and decommissioned. Having invested significantly in these improvements, Transco no longer saw the need to relocate from its Sandwick Road plant.

4.5 It should be noted that this view still prevails at Scotia Gas Networks (SGN), current operator of the Stornoway LPG Plant. Any proposal to relocate Stornoway LPG Plant would have to be funded by external sources with little likelihood of contribution by operators, SGN, who view current safety protocols as sufficient for safe operation of the plant.

4.6 As a result of the Buncefield incident in 2005 – where a number of explosions at the oil storage facility resulted in a fire of an immense scale – new thinking was introduced on the factors to be taken account of in considering planning applications. This, in time, led locally to the suggestion that, if the one remaining above ground gas vessel could be mounded, the primary risk of Boiling Liquid Evaporating Vapour Explosion (BLEVE) could be eliminated thereby reducing the potential need for strengthening works that might be required for new developments close by.

4.7 The Stornoway Regeneration Group has discussed the matter, viewing it as a more general opportunity to review the PADHI zones with a view to releasing land on the edge of the town for development. GL Noble Denton, independent advisors for the oil and gas industry, were commissioned to assess the impact on PADHI zones of mounding the one remaining above ground vessel.

CONSULTATION REPORT

5.1 Investigating options to at least reduce if not entirely remove the safeguarding zones was considered important, and the obvious option would be to mound the one remaining above ground vessel since the primary risk of site BLEVE has been eliminated. However, GL Noble Denton’s work showed that the PADHI zone framework would have to remain in place, but to a slightly less constraining extent, due to BLEVE risk from a 21 tonne road tanker (LPG) which may, periodically, visit the site.

5.2 While the consultants report shows that PADHI zones cannot be completely removed, mounding of the one remaining above ground vessel could significantly reduce the extent of these zones. When vessels 4 and 5 were mounded in the mid 1990’s, the cost was roughly £1 million per vessel. These costs will have increased since then and the Comhairle will have to balance investment at this scale, from whatever source, against the benefits achieved in terms of release of developable land.

5.3 The GL Noble Denton report indicates that the Outer PADHI zone would remain unchanged as it is based on the risk presented by the largest vessel on site, whether mounded or not and regardless of it being a static tank or a visiting tanker. Having said that, the constraints presented by the Outer Zone are the least restrictive.

5.4 If vessel 3 were to be mounded, the Inner and Middle zones are likely to contract substantially, based on the assessments in the Report. This means that areas currently within the Middle Zone would then fall in the Outer zone. (See extract from Report below)

Zone boundary Estimated New Zone Size (m) Current Zone Size (m)

Inner 120 210

Middle 150 300

Outer 500 500

SOURCE: GL NOBLE DENTON REPORT (2012)

CONCLUSION

6.1 The Stornoway Bulk Cargo Import Study was commissioned at a time when project finance was relatively freely available but, as this Study progressed, the UK economy ran into structural difficulties. The original proposals explored in the 2004 bulk cargo report are now viewed as unaffordable; however, Stornoway Regeneration Group was keen to explore a site-specific solution for the Stornoway LPG Plant which might reduce existing HSE constraints through mounding of the one remaining above ground gas storage vessel, and this was the impetus to commission the GL Noble Denton report in 2012.

6.2 While mounding of Vessel 3 may reduce PADHI zone constraints, it does not remove them completely.

6.3 The scale of ‘reclaimed’ developable land which could be released through mounding Vessel 3 is described in section 3 and opportunities exist in respect of the potential to regenerate parts of the Newton area. However, the Comhairle and its partners face a very challenging set of economic circumstances, and the prospect of early improvement in these circumstances is remote. It may cost up to £2 million to mound Vessel 3, and this would have to be added to the development cost of any scheme which the Comhairle brings forward. Current LPG Plant operators, SGN, are unlikely to contribute to any site improvements so the entire cost of mounding Vessel 3 would fall on the Comhairle and external public funders.

APPENDIX 1