Montrose bets on twin track future amid North Sea uncertainty

This is Montrose Port, which lays claim to be the world’s biggest port for the storage and handling of the anchors and chains used for oil and gas rigs.

Established by Royal Charter in 1493 Montrose Port Authority, which runs the port as a not-for-profit trust, is one of the oldest such operators in Scotland. Wooden cargo schooners were built here in the 19th century when Montrose was a bustling commercial hub – reflected today in an old customs house that’s being restored by the port authority for use as a skills academy and community café.

These days, Montrose Port is a logistics and service hub for the North Sea energy sector and general cargo markets. Baker Hughes, a US energy technology company, has been the port’s largest tenant since it arrived in 1993. Two companies in rig moorings, anchors and subsea services, InterMoor and First Marine Solutions, use Montrose as their operations base for the North Sea.

Montrose is a relatively small port, employing 36 full-time staff. Moreover, with only 1,000 metres of quayside it has a fraction of what’s available further north at Port of Aberdeen, Scotland’s largest berthage port at 7,600 metres.

Port of Leith in Edinburgh has over three times Montrose’s capacity. Yet Montrose is showing that size doesn’t always matter. It is carving out what chief executive and former ship captain Tom Hutchison hopes can be a sustainable niche in Scotland’s ports ecosystem in the face of two worrying headwinds: a downturn in North Sea oil and gas work, and uncertain prospects for the development of offshore wind under the ScotWind leasing round.

This week, a report by Aberdeen & Grampian Chamber of Commerce claimed that one in three companies expect to reduce their Northeast workforce within five years due to the effects of the “windfall” tax on profits in place since the Conservative government. Last month, Port of Aberdeen chief executive Bob Sanguinetti sounded the alarm over a “dangerous gap” opening up at his port caused by a 10 per cent decline in hydrocarbon activity this year, combined with slow progress on ScotWind. As much as 60 per cent of Aberdeen’s revenues comes from oil and gas, while offshore wind still accounts for only one per cent.

By contrast, Montrose has built a diversified business consisting of oil and gas servicing (58 per cent of revenues) and the rest split equally between cargo and offshore wind. Total revenue in the 2023/24 year, the latest for which figures are available, were 50 per cent higher than in 2021/22, at £9 million.

It’s well positioned for offshore wind given that about half the 19 ScotWind projects lie within a 200-kilometre radius of the port. “You couldn’t have stuck the pin in the map any kinder for us really,” says Hutchison, an Orkney native whose father was the last lighthouse keeper in Scotland.

While its relatively small quayside means it can’t yet offer offshore wind components manufacturing – as larger ports further north such as Ardesier, Invergordon and Nigg are doing – Montrose can offer the operations and maintenance (O&M) needed to keep a wind farm running over the years of its operating life.

It’s an area in which Montrose has been specialising, starting in 2019 when Seagreen, a wind farm owned by SSE Renewables and Total Energies of France, chose Montrose as its O&M base. Next year a similar facility will be built at the port for Inch Cape, a wind farm being developed off the Angus coast by Red Rock Renewables, jointly owned by ESB, Ireland’s largest power provider, and SDIC, a Chinese state-owned energy group.

Montrose is also vying with Port of Leith for a third piece of O&M work from Berwick Bank, a project off the Fife coast that’s set to be one of the world’s largest wind farms. Securing that contract would make Montrose the biggest O&M port in Scotland.

Meanwhile, Hutchison - who spent some years working in offshore wind in England - is “deeply concerned” by the state of the North Sea. “We totally understand Aberdeen’s situation because we’re feeling a lot of that as well,” he says. “At the moment we’re doing really well in renewables. But if we weren’t handling Inch Cape next year things would be looking pretty tough for Montrose as well.”

Meanwhile, the port authority is pressing ahead with a master plan that includes the acquisition last year of 45 acres of land three miles north of the port. Scottish Enterprise grant funding is supporting not only its transformation into an offshore wind manufacturing site but also the expansion of the port’s berth capacity by 30 per cent.

Renewable energy is also taking on increasing importance at Montrose through a pioneering scheme to decarbonise shipping through the use of quayside electric charging. Once docked at the quayside, a ship is plugged into a device that looks like a giant electric vehicle charger and supplied with power generated by renewables. This allows the ship’s diesel engines – usually kept running while berthed - to be turned off.

Such so-called “shore power” is being delivered in a joint venture between Montrose Port and a Norwegian company called Plug. The aim is to make Montrose the first carbon neutral port in Scotland. This week, Montrose signed an agreement with Aberdeen-based Dales Marine Services for new space at the port where it will convert visiting vessels to enable them to connect to shore power.

Ultimately, there are wider community benefits too. “The fact that we are starting to cut emissions in the town and clean the air, that’s really what it’s all about,” says Hutchison.