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An oil terminal in the Orkney Islands has been given a major boost following a North Sea deal.

Oil and gas firm Talisman Energy has signed an agreement to provide transportation and processing services to the Golden Eagle development, which is currently under construction.

The services will be provided through the Talisman-operated Flotta terminal at the southern end of Scapa Flow.

Orkney Islands Council welcomed the deal, saying it would secure 200 jobs.

The £2.2bn Golden Eagle project is expected to produce 140 million barrels of oil equivalent over 18 years.

First oil from the field, which lies 110km (68 miles) north east of Aberdeen, is expected in late 2014.

Golden Eagle is operated by Nexen Petroleum UK, which also holds a 36.54% working interest in the field.

The remaining interest is held by Maersk Oil North Sea UK (31.56%), Suncor Energy UK (26.69%) and Edinburgh Oil and Gas (5.21%).

Talisman said the agreement was "the most significant piece of business" that the Flotta terminal had been awarded since it took over as operator.

Output from Golden Eagle is expected to double the volumes shipped through Flotta.

Currently about 10% of the UK's oil output comes ashore at the terminal before being pumped into tankers and shipped around the globe.

Paul Harris, Golden Eagle project director for Nexen, said: "This is an important milestone for Golden Eagle, one of the biggest developments in the North Sea today.

"We expect to start offshore installation work next year and our schedule for first oil remains on track."

Orkney Islands Council welcomed the agreement.

The council's chairman of development and infrastructure, James Stockan, said: "It is great news for Orkney.

"The last few years have seen some difficult times for our local industries and this brings a welcome boost to our economy, the Flotta oil terminal and its workforce."