Feasibility studies are to begin exploring the possibility of redeveloping former wartime oil tanks into a new fuel base in Lyness.

Scapa Flow Asset Management Limited (SFAML) and Orkney Islands Council have signed a Memorandum of Understanding to examine how the Wee Fea underground storage tanks could be transformed into a base for the storage and distribution of low sulphur marine gas oil.

The six tanks were tunnelled into the hillside above Lyness during the Second World War to provide protection from air raids. They held up to 132 million litres of fuel oil for supply to British and Allied warships stationed in Scapa Flow.

David Moir, Managing Director of SFAML, said the tanks' strategic location, their large storage capacity and their location "potentially add up to a turn-key solution for a project of this kind".

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"We will be looking to see if the tanks could be used for the storage and distribution of low sulphur marine gas oil to the north Atlantic region and the north of Scotland," he said.

"We aim to commence the initial due diligence process in the next few weeks. Bearing in mind that the tanks have not been utilised commercially for over half a century, this will be potentially challenging.

"However, our initial investigations have led us to believe that this asset does have the potential to serve as a first class, strategically placed low sulphur fuel hub."

Gavin Barr, the Council's Director of Development and Infrastructure, said: "The potential to bring the tanks back into use has been looked at on a number of occasions over the years and we welcome this latest approach.

"This initial agreement marks a very early stage in the process. It matches how the Council has approached potential interest from developers in the past and gives the company access to the underground facility for early feasibility and testing work. We hope to have the results of this later this year when next steps can be considered by the Council in due course."

(LM)