WIREDGOV

First Minister Alex Salmond has welcomed a cross-strait Chinese delegation to Edinburgh, as they explore investment opportunities in Scotland – including a £5 billion Memorandum of Understanding (MoU) with a Scottish company.

This mission is the first time that cross-strait energy sector companies have joined together to explore investment opportunities across several Scottish industries, including oil and gas and renewables.

Aberdeenshire-based Unmanned Production Buoy Group Ltd (UPB) and Tong Ze Group of Hong Kong have signed a £5 billion MOU (264.9 billion in Chinese Renminbi), to develop and use UPB’s technology, which allows marginal and uneconomic oil fields to be exploited at much lower cost than conventional methods.

As part of the visit, an MoU was signed among Scottish Enterprise, Falkirk Council and Chinaway Energy Company to develop an action plan to look at reducing the cost of energy generation in the wider Grangemouth industrial complex.

Welcoming the visit, the First Minister said:

“It’s fitting that our countries should work together, to develop and commercialise the energy and low carbon technologies of the future. The Scottish Government is absolutely committed to encouraging that co-operation and building on the links we have made though engagement with China since 2007.

“And it’s why I welcome these three Memorandum of Understanding. They will strengthen our economic links in areas such as energy, the creative industries and tourism. They are a further sign of the growing partnership and friendship between our countries.

“In particular the MoU for UPB is significant, given the scale of investment. As mature basins, the North Sea and Chinese waters face many similar challenges, but also huge opportunities and I’m pleased to see Scottish expertise being recognised – demonstrating once again our international leadership in the energy sector.

“In Scotland, we have a continuing appetite for invention and innovation; a desire to look beyond our own country and to build partnerships with countries and businesses around the world.”

Richard Selwa, Chairman of UPB, said:

“We are delighted with is significant announcement and look forward to many years of friendship and sharing of mutual prosperity with Tong Ze and our many Chinese stakeholders.

"We are proud this MOU marks a major milestone for UPB. The MOU rewards the many years of hard work by the Scottish and UK governments.

“On behalf of our Chinese friends and the UPB team I would like to thank the First Minister and his SDI team for hosting this significant and important MOU signing ceremony.”

Scottish Enterprise director of Energy, Maggie McGinlay, said:

“Scotland has much to offer the Chinese energy market and this visit has been a great opportunity to profile our highly innovative energy companies to key Chinese investors.

“We also recognise the importance of Grangemouth as Scotland’s largest industrial complex and that to be a globally competitive manufacturing nation, we need to explore ways to reduce energy costs for energy intensive business such as the chemical sciences sector. That is why this MoU plays an important role in helping us do that.

”We aim to work closely with Falkirk Council, Chinaway Energy Company, and the businesses in Grangemouth to maximise the economic benefits from this partnership.”

Councillor Craig Martin, Leader of Falkirk Council, said:

“Falkirk Council welcomes the opportunity to sign up to this ground-breaking partnership which will explore how energy costs can be reduced in Grangemouth. The Grangemouth petrochemical complex has huge strategic importance to the national economy and the Council is aware that energy costs are one of the greatest concerns of businesses based at the complex.

“The Chinaway Energy Company has considerable expertise in energy technology and we are confident that this agreement has the potential to help reduce energy costs and improve efficiency in Grangemouth. It also demonstrates the power of forging international links and creating partnerships that will bring great benefits to our local economy.”

China Way Energy Limited said:

“Signing this Memorandum of Understanding cements China Way Energy’s commitment to investing in different technology that looks at increasing efficiency and save energy. We look forward to working with Scottish Enterprise and Falkirk Council to bring knowledge and expertise to the table in the coming months.”

The MoU is an agreement to develop an action plan to consider the physical, technical, commercial and regulatory viability of a range of renewable and other technology projects aimed at reducing energy (power, heat and steam) costs by 20% or more.

The study will seek to: identify appropriate avenues for potential investment in any viable projects identified by the Parties in respect of the Complex, together with, where possible, details around timelines for such investment; and explore the potential for formation of an energy services company with a view to maximising any benefits (including cost efficiencies) which may arise from aggregating energy production and demand on the Complex.

China Way Energy Limited will actively evaluate the scope for it to become the lead investor in any viable energy efficiency projects which may be identified in respect of the Complex; and the setting up of a private limited group company to be headquartered in Scotland for the purpose of working closely with all stakeholders in respect of such projects.

UPB is an oil development company and mass manufacturer of unmanned oil production platforms. The focus of UPB's business model is marginal fields, or fields that are currently under production but the host platform is no longer economic.