A deal to develop two major gas fields to the West of Shetland has been agreed.

The oil giant Total met with bosses at Shetland Islands Council (SIC) on Thursday to thrash out an land leasing agreement.

Gas from the Tormore and Laggan developments will be pumped to a new £500million processing plant to be built next to the Sullom Voe oil terminal.

But the project still requires approval from the UK government.

It is understood the SIC could be set to receive a small royalty on all the gas that flows through the islands from the field before it travels via the Frigg pipeline to St Fergus.

Such a deal would be similar to the disturbance agreement signed with the oil industry when Sullom Voe was built in the 1970s, which paid the council one penny for every tonne of oil that passed through the terminal until 2000.

Last month the SIC’s planning board gave Total permission to erect the processing plant together with import and export pipelines, isolation valves, associated roads and hard standing on land at Sullom Voe, Orca Voe and Firths Voe.

The development will see the removal of 350,000 tonnes of peat, which will be stored in “reservoirs” for the 30 year lifespan of the plant.

Work on preparing the site is expected to commence in April with production estimated to begin in June 2014.

The facility would see the creation of 60 to 70 full time jobs on top of the hundreds of posts that will be employed during the construction phase.