Shepherd Offshore’s role in Tyne rebirth
With the Tyne once more resounding to the sounds of rivets and bolts being fastened and hammered, the contribution of one family to the river’s industrial rebirth draws no parallel.
Proud sons of Newcastle’s east end, the Shepherd family spotted the opportunities when the face of the river began to change in the 1970s.
With shipbuilding in decline, the Shepherds boldly help catalyse the region’s offshore oil and gas industry in the Tyne’s former ship and dock yards.
During the last few decades Shepherd Offshore, run by brothers Freddy and Bruce Shepherd, has spent over £50m developing its assets and is now the largest private landowner on the river with over two miles of waterfront estate.
The oil and gas sector now employs thousands of skilled workers on the river and the emerging opportunities in the renewable sector mean thousands more may soon be joining them – many in facilities provided and serviced by Shepherd Offshore.
Shepherd Offshore director Freddy Shepherd, the former chairman of Newcastle United, explained: “My father ran a successful transport business. He then ventured into property with the purchase of the Whitbread brewery on the banks of the Tyne, at Walker in 1974.
“The shipyards were in decline at this point but we sensed a new opportunity was emerging for the river and it was something I knew something about.
“I’d qualified as an engineer with BP and worked with the company for eight years and having been to sea, I understood the possibilities in the oil and gas sector.
“We were seeing all this activity starting to take place and sensed a real opportunity.”
The Tyne soon became a major location for the manufacture of oil rig fabrications as the North Sea oil boom took off, and the skills of the Tyneside workers who made the ships were ideally suited to the offshore industry.
Shepherd Offshore became a premier logistics partner to the emerging industry, from its Newcastle east end base in Walker.
“We worked extensively with companies such as Amec. They were building the oil jackets and rigs and we were providing the logistical support,” said Freddy.
Its next significant milestone came with the redevelopment of the former naval yard in Walker 1986 now known as the Offshore Technology Park. Shepherd Offshore was the anchor for the technology park and it now provides work for over 2,000 people.
Freddy continued: “With the facilities we already had, and the land we acquired with the purchase of the naval yard, we were in a position to develop the riverside further.
“The deep water quays and cranes from the dockyard meant it was a superb facility for the subsea oil and gas industries.”
One of the first companies to locate there, 25 years ago, is still one of the region’s most successful manufacturers today.
The Duco North factory (formerly Dunlop), was built by Shepherd Offshore and established in 1987.
Duco provides umbilical systems and services, which form the connection between oil platforms and the subsea infrastructure, to enable the operation of equipment in water depths exceeding two miles.
It is now owned by French multinational Technip and its most recent honour saw it which recognised it as Company of the Year for 2011, by Subsea UK, the industry body for the British subsea industry.
Duco’s rise has been mirrored by other successful subsea companies such as Wellstream and SMD, who are both located nearby.
The success of the North East subsea sector means that it now employs over 10,000 people and contributes over £1 billion to the regional economy.
One of the key assets on the Offshore Technology Park is the 350-tonne crane, which was built in the same year as the Tyne Bridge, 1928, by famous Glasgow crane maker William Arrol. This is the largest of its kind on the east coast of the country and is still used every day.
Freddy continued: “We have the crews, with the skills and equipment to do the work that is needed.
“This is where the operators will make savings as we are able to manage the logistics involved.
“We have great relationships with these businesses, we understand their needs in loading these huge umbilicals and they understand us. It also helps that Newcastle is a 365-day a year port.”
At a time when the emerging noise from renewable energy was still being muffled by carbon-based sector the Shepherds acutely tuned into this low-carbon frequency to help them execute their next move on the river.
In 2008 they acquired the former Neptune shipyard, a 60-acre site, next door to the Offshore Technology Park.
The last ship sailed from the yard decades ago and it had lain unused for 20 years before the Shepherds secured the property from North Tyneside Council.
Shepherd Offshore subsequently unveiled plans to turn it into a renewable energy park. After a major redevelopment, the Neptune Park is now a clean 80 acre site with 700m of operational quay edge and incorporates a 218m long dry dock facility.
Last year it finished work on a purpose-built factory for US turbine manufacturer Clipper, but after this company changed tack, it has been used as a temporary home for the subsea vehicle maker SMD.
In November this year steel rope-maker Bridon International will open a new factory on the site creating many new jobs.
With the next generation of offshore turbines now being installed in the North Sea, the Shepherds are confident the location on the Tyne, can act as a base for the emerging offshore wind industry.
Freddy added: “Neptune Energy Park is geographically well placed to service two of the three major strategic areas for offshore wind power, identified in the Crown Estate’s second and third round of licences, and has the industrial capacity to fulfil ambitions way beyond existing licenses and targets.”
Before filling in the dry docks to create the new quay edge, one was used to help make the second Tyne Tunnel.
The tunnel was constructed in the dock and then taken downstream to be lowered into the trough that had been dug on the river bed.
Freddy continued: “Talks are well underway with some of the industries major players, some huge international companies are looking at the region with the potential to create thousands of jobs.
“The geography of the North East and particularly the River Tyne is ideal to meet their needs.
“We have excellent service levels, can supply all the support services and the specialist skills of the workers on the Tyne cannot be matched elsewhere in the world.”
Newcastle College recently opened a 20,000sq ft Energy College on a site adjacent to Neptune Energy Park, which was constructed by Shepherd, and is designed to provide the skilled staff for the renewable and carbon-based energy sectors in the future.
Among the other riverside assets the Shepherd’s own are a 40-acre site on the south of the river in Jarrow and it recently sold the 90 acre Hadrian yard at Wallsend to an overseas buyer.
This is now being used as a fabrication yard for an oil platform by the OGN.
One of the leading lights in the UK energy sector has praised the role played by the Shepherds in the region’s modern industrial renaissance.
George Rafferty, chief executive of NOF Energy, said: “Freddy Shepherd demonstrated great foresight by not only acquiring and investing in the assets on the River Tyne, but also identifying their potential to become a centre for energy sector operations.
“The area’s shipbuilding heritage laid the foundations for the area to become an industrial hub and, by making the assets available to companies such as Wellstream and Duco, which have gone on to create globally-recognised operation on the banks of the Tyne, Freddy can be rightly proud of his role as one of the architects of the North East’s modern industrial history.
“While the oil and gas sector remains the central part of the area’s energy sector activities, the emerging offshore renewables sector will also benefit from the Tyne’s role as an energy hub as companies based in the region are benefiting from the river’s locality and access to offshore wind developments in the North Sea and beyond.”
In Scotland, near Dunfermline and one mile from the Forth Road Bridge, the Shepherds have acquired a former microchip factory and adjacent land covering a total of 150 acres.
This site, known as the Halbeath Interchange, has been earmarked as a location for new college, 500 homes and with the remaining third designated as an industrial site to support the renewable sector.
Between 1992 and 2007 when Freddy Shepherd became involved in Newcastle United Football Club, brother Bruce took control of Shepherd Offshore.
Freddy explained wryly “Bruce ran the business while I had a 15-year sabbatical at Newcastle!
“He was the driving force behind what we have successfully created during that period and he has my immense gratitude for what he achieved.”
It is still a real family business today, with many staff having been employed for decades.
Shepherd Offshore and the Shepherd family place a lot of faith in their professional advisers.
Freddy elaborated: “My father dealt with Winskell and Winskell and the relationship continues today with Square One Law and its partner Robin Winskell”.
“Relationships such as these are very important to a business like ours. Robin looks after all of the Shepherd family business as well as Shepherd Offshore.
“Robin knows our business and we trust him implicitly. For a business like ourselves it is vitally important to have trusted advisers and build up long term relationships.”