Moving Forward at Pace

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Moving Forward at Pace pp 70-71

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Moving Forward at Pace pp 70-71Council signs off on the allocation of a large area for future oil supply base at the Port of Runavík, while an all-party agreement to go ahead with the development of a giant underwater tunnel offers breakthrough at political level.

The Port of Runavík has moved closer to seeing its grand vision of new infrastructure and offshore business turned into reality in the Faroe Islands’ longest fjord, the Skálafjord. With a draft plan for a 124.6-acre (500,000 square meter) oil supply base adopted last year (2013) by the Runavík Municipal Council, the area north of the Skála Shipyard has officially been allocated for a future supply base. In liaison with an international engineering, design and consultancy group, the area has been readied for development in the event of a commercial oil or gas discovery offshore the Faroe Islands, according to Harbor Director Torbjørn Jacobsen.

Meanwhile, a massive infrastructure development program featuring an underwater tunnel between the two arms of the Skálafjord and the capital Tórshavn, moved past a long-standing hurdle earlier this year, as all political parties represented in the Faroese parliament, the Løgting, finally agreed on a financial framework for the project.

A second underwater tunnel was added to the development package to link the island of Sandoy with Streymoy, the island of the capital. With construction set to begin in 2015 at an estimate price tag of 1.9 billion dkk (255 million eur), the project will easily be the largest ever undertaken by the 48,000-strong Faroese community.

“This piece of infrastructure will catapult the entire area to a whole new level,” said Mr. Jacobsen, who is also the deputy mayor of Runavík.

Cruise Terminal: The Port of Runavík reported a 45-percent profit for 2013 with revenues of about 11.5M dkk (1.5M eur). According to Mr. Jacobsen, the main sources of income were docking related to fishing operations, aquaculture, freight forwarding, ship repairs and maintenance, and various services.

“The port has definitely recovered,” he said, referring to a decline in revenues and profits from 2008 through 2011. “We have experienced fairly rapid growth over the last few years and expect continued growth yet at slower pace, as we’ve almost reached the level of full utilization of facilities. On the other hand, more capacity in the way of new dock space could refuel growth.”

Under consideration is a new 25M dkk (3.35M eur) harbor extension plan designed to increase the Port of Runavík’s ability to receive foreign cruise passenger ships. Adding 220 meters of dock between the Beta Key and the ASB Terminal at Saltangará will bring 320 m of unbroken stretch with 12 m water depths alongside.

“We believe we can become more attractive as a port of call for cruise ships and for that as well as for a more general purpose we’re looking to add this new Cruise Terminal.”

‘Good reputation’: One of the busiest in the Faroe Islands, the Port of Runavík is home to a number of service and manufacturing companies including, for example, Faroe Origin, owner/operator of eight fishing vessels and a modern fish filleting plant at the Runavík Fishing Harbor, about a kilometer south of the Beta Key, where freight carrier Fresh Link has its home base.

“As a traditional port of call for cargo vessels one of our concerns was to find a replacement for the previous operator which closed its branch here a few years ago,” Mr. Jacobsen added. “So we were pleased that Fresh Link chose to set up base here.”

The Faroe Islands’ largest fish farming company and exporter of Atlantic salmon, Bakkafrost, has its headquarters at Glyvrar, about a kilometer north of the ASB Terminal. Here, new harbor development is being undertaken to accommodate the expanding needs of the aquaculture giant as it concentrates production facilities to this place.

Across the fjord lies the Skála Shipyard, owned and operated by MEST, the Faroe Islands’ largest shipyard group. The well-equipped yard at Skála is used for Faroese and foreign vessels including, for example, large Russian trawlers. Also part of the group is the Runavík-based stainless steel equipment manufacturer formerly known as FJM.

The Port of Runavík is home to Atlantic Supply Base (ASB), the oil supply base used for all offshore exploration activities that have taken place to date on the Faroese continental shelf. Drilling on the eighth well is set to resume early this summer with the ninth one expected to be spudded afterwards.

“ASB have been busy preparing for this year’s activities and the quality of their work has earned them good reputation with the oil companies,” Mr. Jacobsen said.