Undersea exploration at the Glendronach Prospect, part of the Greater Laggan area 125km (78 miles) north west of Shetland, has revealed that there could be one trillion cubic feet of gas to be extracted. This equates to 176 million barrels of oil.
Total, the company which made the discovery said it could be could be extracted commercially using the current Laggan-Tormore infrastructure.
Total has a 60% stake in Glendronach, with SSE and chemicals giant Ineos each having 20%.
Mr Arnaud Breuillac, Total's president of exploration and production, said:
"Glendronach is a significant discovery for Total and provides additional gas resources in one of our core areas and validates our exploration strategy.
"Located on an emerging play of the prolific west of Shetland area, the gas can be extracted quickly and at low cost."
Deirdre Michie, industry body Oil and Gas UK's chief executive, added:
"This is a major discovery which demonstrates the exciting potential the West of Shetland frontier region holds."
Patricia Gibson MP commented:
“This is the largest conventional gas discovery in Scottish waters since Culzean in 2008 in the North Sea and one suspects it will not be the last.
“It is heartening that Scotland’s oil and gas industry will continue to contribute to Scotland’s prosperity and sustain thousands of jobs for many years to come.”