State-owned Chinese firm opens key Dundee marine base

A Chinese state-owned engineering services firm has opened its first UK subsidiary, in Dundee, as it looks to tap into the multi-billion market for decommissioning of oil and gas infrastructure in the North Sea.

L to R: Norman McLennan, COES; Councillor John Alexander; Jamie Hepburn MSP; Hong Chong, president, COES; and Neil Francis, director, Scottish Development International. Picture: Colin Hattersley

The China Ocean Engineering Shanghai Co (COES) has invested £500,000 in offices on Dundee’s waterfront and will initially employ up to 15 members of staff.

The operation will focus on both offshore decommissioning and renewables in the UK and Europe. The decommissioning of North Sea platforms and pipelines is estimated to be worth some £17.6 billion for companies in the sector. Up to 100 platforms and 7,500 kilometres of pipelines will need to be completely or partially removed over the next decade.

COES has invested around £400 million to develop offshore construction engineering vessels and equipment to be able to work on some of the largest contracts.

COES Caledonia (UK)’s director general, Norman McLennan, said: “There’s a significant volume of offshore decommissioning and renewables activity projected over the next decade and we’re looking forward to supporting the offshore sector from Dundee.”

Neil Francis, director of Scottish Development International, which supported the inward investment move, said: “We’re thrilled that COES has taken the decision to locate its first UK subsidiary in Dundee.

“It’s estimated that decommissioning could be worth more than £10bn to Scotland’s economy over the next decade and having one of the industry’s foremost heavy lift vessel providers base itself in Scotland is a boon to the country’s international standing in this field.”

COES first announced its intention to establish a project office in Scotland in 2017 during a meeting with First Minister Nicola Sturgeon when she visited the COES headquarters in Shanghai as part of her trade mission to China.

Scottish business minister Jamie Hepburn said: “In locating in Scotland, COES has recognised our supportive business environment which encourages innovation, investment and inclusive growth.

“The Scottish Government has already supported decommissioning projects in Dundee through the Decommissioning Challenge Fund, and we continue to work to realise the economic benefits from activity in Scotland.”

COES, which is headquartered in Shanghai, employs more than 1,700 people in marine construction, salvage, towage and offshore decommissioning.

COES was recently involved in one of the most complex offshore marine construction engineering projects ever attempted with the raising of a South Korea passenger ferry which had sunk in 45 metres of water.