Work begins on Montrose £9m GE Oil & Gas expansion

NewsWork has begun on an expansion of GE’s Oil & Gas Centre of Excellence in a project worth £9m which will also create 40 new jobs by 2013.

The announcement comes as First Minister Alex Salmond hosted a round table discussion with key players in the Oil & Gas industry during his visit to Chicago last week, to reinforce the Scottish Government’s commitment to investors in this hugely important industry.

The First Minister said:

“When GE Oil & Gas centralised its operations at Montrose in 2009, it was with a view to having additional capacity to meet both customers' expanding needs and GE's anticipated Services growth in the European region. Now this ambitious £9m expansion further demonstrates the company’s commitment to the Montrose area and Scotland’s important role in GE Oil and Gas’s future.”

The subsea arm of the equipment and services supplier for the global offshore drilling and subsea sectors announced the plans to invest £9million in its Montrose-based centre of excellence (COE), Brent Avenue, earlier this year.

Builders have moved onto site, with work taking place to prepare the ground before construction begins. The buildings are expected to be completed early next year, allowing the installation of new machinery.

Growing subsea activity and GE’s increased market share have prompted the investment, with the expansion set to double the site’s current size, to 4200m2 also improving its service capabilities, including product testing and assembly.

Rod Christie, vice president of Subsea Systems at GE Oil & Gas, said:

“This larger, more capable facility and the resultant extended service offering is a reflection of the company’s long-term commitment to Scotland. It is also further indication of the sustained growth in business that we have seen globally over the last two years.”

The site expansion will ensure that new, much larger deepwater vertical xmas tree (DVXT) projects can be manufactured in-house, allowing the organisation to meet increasing demand and accelerating the manufacture of subsea equipment for the organisation.

Mr Christie added:

“Deepwater applications are a rapidly growing segment within the oil and gas industry, with the subsea market a key strategic area for us and many of our customers. Recognising this, the company’s significant investment in the Montrose facility shows a clear response to their needs and will allow us to continue delivering high quality, ultra-reliable subsea systems to projects worldwide.”

Lena Wilson, Chief Executive of Scottish Enterprise, said:

"GE's plans for Montrose are a real testament to the global reputation of Scotland’s Oil & Gas industry.

“The Oil & Gas Strategy for Scotland, which was launched earlier this year, identified the crucial role that the sector has to play in our future long-term economic success. Working with inward investors like GE and indigenous Scottish companies to support their operations to grow in key areas of the sector – such as subsea manufacturing – will be key to this.

Included in the investment is a new state-of-the-art assembly and test line for the construction and testing of sub-assemblies and master block valves (MBV). This will enable the site to produce all key components, from raw material through to a fully-built, flat pack subsea tree. An additional fleet of machinery, including a horizontal lathe and borer, will increase the facility’s current capabilities to accommodate the size and weight of trees required for ultra deepwater applications.

GE Oil and Gas presently employs 646 in Aberdeen and 246 split between two sites in Montrose.

The GE announcement follows the news on Thursday that global company Sigma Aldrich are expanding their operations in Scotland, with the development of a new powder manufacturing facility on their Irvine site – supported by a £1.5 million grant from Scottish Enterprise.

While in Chicago, the First Minister has undertaken a programme of business engagements and on Friday delivered a keynote speech to the Chicago Council on Global Affairs and met city mayor Rahm Emanuel.

The First Minister also played a major role in the handover ceremony at the close of play on Sunday, September 30, when he received the Silver Putter which denotes Scotland taking over the tournament preparations for Gleneagles 2014. One of the largest sporting events on the planet, the Ryder Cup is expected to inject £100m into the local and wider Scottish economy during the week of the tournament alone. In all, more than 250,000 spectators from all over the globe are expected to visit Gleneagles to watch the event, with millions more able to watch the action on television in more than 180 countries.