A decommissioning facility in the UK's Shetland Islands is on the brink of being awarded a landmark deal to dismantle a North Sea production facility.

According to well-placed industry sources, Repsol Sinopec Resources UK is expected to announce imminently that Veolia Environmental Services has been selected to decommission the operator’s Buchan Alpha production floater at the recently upgraded Dales Voe facility.

Shortly before Upstream went to press, a Repsol Sinopec spokesman confirmed the company was close to making an award to decommission Buchan Alpha but declined to give further details or name the winning contractor.

“Throughout this process our priorities have been the safety of our people and the highest standards of environmental protection,” the spokesman said.

If confirmed, the award would be a further fillip to the UK’s hopes of becoming a global centre for decommissioning.

Some estimates value the North Sea decommissioning market alone at more than $70 billion up to the 2060s.

It would follow the arrival last month at Able UK’s Seaton yard in Hartlepool, England, of Anglo-Dutch supermajor Shell’s 24,500-tonne Brent Delta topsides, which was removed in a record-breaking single lift using Allseas’ massive twin-hulled Pioneering Spirit vessel.

You can watch a video of the Brent Delta topsides removal by the Pioneering Spirit below.

Veolia Environmental Services was unavailable for comment.

Lerwick Port Authority and energy logistics company Peterson recently completed a project to extend the Dales Voe quay at a cost of about $15 million and an expansion of deep-water capabilities is also being considered but yet to be approved.

Repsol Sinopec confirmed in February it was preparing to move Buchan Alpha off station permanently in the third quarter this year to comply with the facility’s Safety Case under an agreement with the Health & Safety Executive (HSE).

It follows years of concern over the structural integrity of the ageing pentagonal-design floater, which led to production restrictions when wave heights were greater than 6.75 metres.

Production finally halted on 13 May.

Despite the need to decommission Buchan Alpha, the Buchan and Hannay fields are not yet depleted.

The Oil & Gas Authority granted Repsol Sinopec approval earlier this year to “suspend” production to assess remaining economic potential with an eye on a potential redevelopment in future.

Buchan started producing in 1981 and throughout its life has produced more than 147 million barrels.

The Repsol Sinopec spokesman said the development has been of “great service to UK plc”.

In 2011, the HSE ordered then-operator Talisman Energy to submit a revised Safety Case amid concerns its structural integrity was not being managed properly.

This was before Chinese energy giant Sinopec took a 49% stake in the Canadian company’s North Sea business in 2012, creating Talisman-Sinopec Energy UK. Talisman was later sold to Spanish company Repsol.

HSE issued the rare request because it felt Talisman’s inspection regime might not identify potential cracks in Buchan’s legs and supporting braces early enough to prevent them from deteriorating to a point where it was at risk of suffering a primary structural failure.

In May 2014, a Safety Case was submitted setting out how a phased shutdown of the platform would be achieved by 2017 and how the integrity of the platform and the safety of workers would be assured in the meantime.

The Buchan field lies in blocks 21/01a and 20/05a, about 156 kilometres north-east of Aberdeen in a water depth of 116 metres.

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Deal for Buchan Alpha decommissioning near