A subsea cable connecting northeast Scotland with Shetland is to be manufactured in Scotland for the first time.

Sumitomo Electric Industries and its partner, Van Oord, have signed a capacity agreement with SSEN Transmission, an important milestone in developing Sumitomo’s £350m cable manufacturing facility, currently under construction in Nigg.

It is expected to create 150 full-time equivalent jobs directly with a similar number across the supply chain.

The companies say cabling of the type due to be installed has never previously been manufactured in the UK.

Piling works are nearing completion on Sumitomo’s 150,000, sq metre site, and factory foundations are now well under way.

Sumitomo has sought to involve the local supply chain in as many aspects of the project works as possible with 55% of construction spend to date in Scotland and 45% in the rest of the UK and Ireland.

Yasuyuki Shibata, chairman of Sumitomo Electric UK and Europe, described the agreement with Van Oord and SSEN Transmission as a “significant milestone for Sumitomo’s subsea cable factory investment in Scotland”, while Rob McDonald, managing director of SSEN Transmission, said it was a “major boost to the Highland economy.”

UK Energy Minister Michael Shanks said: “Sumitomo’s manufacturing facility is a fantastic example of the world-leading offshore expertise here in Scotland which will play a huge part in the expansion of the UK’s homegrown clean energy sector.”

Scotland’s acting Energy Secretary Gillian Martin added: “Scotland is fast becoming a renewable energy powerhouse, providing opportunities to grow our economy and create jobs while protecting the environment.”