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To take a boat trip around the mouth of the River Tees one morning last week was to observe both the history and future of the UK energy industry. There was a Shell oil rig being dismantled on land and nearby were vast wind turbine blades ready to be shipped to the North Sea. A petrochemical refinery faced a biomass power station across the river.
This was also the site of a territorial dispute between the local port where ships load and unload their cargo and the regional development zone that forms a 4,500-acre horseshoe of land around it. A high court case over Teesport’s access rights was resolved earlier this year in the port’s favour.
My guide as we toured the river was Jerry Hopkinson, chair of Teesport’s owner PD Ports. Despite emerging victorious, he is still troubled by being drawn into conflict to protect its rights of way. “I find it absolutely inexplicable that the largest private sector employer in the Tees Valley found itself at odds with the local authority,” he said.
Its antagonist was the development corporation controlled by the region’s Tees Valley Combined Authority, headed by its Conservative mayor, Lord Ben Houchen. The legal battle also involved Chris Musgrave and Martin Corney, two local property developers who have controversially taken control of the Teesworks freeport in the zone.
Hopkinson now wants to move on. Despite its fractious neighbour, Teesport has a fine location. The port has been custodian of the Tees since 1852, and made 70 per cent of its £214mn revenues last year from river conservancy and leasing sites on its 2,400 acres of land to industrial users, including the MGT Teesside biomass plant.
Conserving the Tees is not an easy task. PD Ports has just put into service a bright green £23mn dredger to keep the river clear enough for deep-hulled ships. The 12 miles of navigation that the port maintains has to be dredged constantly to clear the sand and silt washing in from the North Sea.
The future lies with its port operations, as Teesside attracts investments in clean energy. An oil and gas pipeline from the Ekofisk field in the North Sea runs into Teesside, but Houchen touts Teesworks as “the UK’s leading decarbonisation cluster”. In April, Sir Keir Starmer joined a line of supportive political leaders by visiting the port to launch Labour’s green energy plans.
Teesport is only the UK’s sixth largest port by tonnage, having long suffered from what it calls “southern discomfort”. A lot of freight bound for the north of England arrives through competitors such as Felixstowe because the largest container ships can unload there, while Teesport has size limits.
Its business could be transformed by net zero and Teesport’s location opposite North Sea wind farms including Ørsted’s Hornsea project. “I can see this becoming the biggest port in the UK by volume in 10 years. We may get there quicker, in all honesty,” Hopkinson said, in the tone of a Teesside true believer.
As we toured, he listed the projects that he hopes will enable it. They include Seah, a South Korean steel fabrication company that is building a plant to make foundations for wind turbines. There are also plans for a carbon capture and storage facility linked to a gas-fired power station, and two BP hydrogen production plants.
The port’s potential may now unlock a partial sale. Brookfield, the Canadian asset management group, has owned PD Ports since 2009 and offered it for sale three years ago. That process was called off, partly due to legal uncertainty, and with the case settled, Brookfield is considering selling a minority stake.
But much remains potential rather than fact. The Teesworks site was formerly occupied by the Redcar steelworks owned by the Thai group Sahaviriya Steel Industries. These operations collapsed in 2015. The land has been expensively reclaimed but our view from the boat included an expanse of empty territory.
This makes the tension between the neighbours at the heart of Teesside’s revival not only inexplicable but worrying. Hopkinson says that the port will now work cooperatively with the projects around it, no matter which land they occupy. That is both its legal duty and the right financial strategy.
Having tried to squeeze the port and failed, Teesworks should also try to co-operate. Not only has £560mn of public investment already been made, but the region needs the private sector funding that energy transition offers. Otherwise, Teesside will look back at its lost chance of regeneration and despair.
john.gapper@ft.com
