BP sells Forties North Sea pipeline to Ineos
04 April 2017
Chemicals and energy giant Ineos has struck a deal to acquire the Forties Pipeline System in the North Sea from BP for US$250m. The pipeline transports about 450,000 barrels of oil per day on average - about 40% of UK production. It is one of the oldest in the sector, having started operating in the Forties field in 1975.
Forties Unity Platform - Image: BP
The 360km line links 85 North Sea oil and gas fields to the UK mainland, and to the Ineos site in Grangemouth. The system primarily comprises a 170km 36in pipeline from the unmanned offshore Forties Unity platform to the onshore terminal at Cruden Bay in Aberdeenshire.
From there, a 36in onshore pipeline transports the oil 130 miles (209km) south to the Kinneil terminal and gas processing plant, adjacent to the Ineos-owned Grangemouth refinery and chemical plant on the Forth.
This is where it is processed before either being sent for export via the Dalmeny terminal or on to the refinery at Grangemouth.
The sites at Aberdeen, Kinneil, Dalmeny and the Forties Unity Platform will all transfer to Ineos when the deal is completed, along with 300 staff.
BP originally operated the Forties oil and gas field, the pipeline and the refinery. It sold its interests in the oil field to Apache in 2003 and the Grangemouth refinery and chemical plants to Ineos in 2005.
Ineos chairman and founder Jim Ratcliffe said: "The North Sea continues to present new opportunities for Ineos. The Forties Pipeline System is a UK strategic asset and was originally designed to work together to feed the Grangemouth refinery and petrochemical facilities.
"We have a strong track record of acquiring non-core assets and improving their efficiency and reliability, securing long-term employment and investment."
This sale continues the process of BP pulling out of the North Sea. Following its Gulf of Mexico explosion and spill, BP hastened the pace of its shift from refining and mid-stream operations such as pipeline operations.
The oil major wants to deploy its capital resources where it thinks it can get most return by specialising in what it does best - big scale, technically-demanding new fields, such as those west of Shetland.
And the fact that there are still buyers such as Ineos who think they can get more value than existing owners out of these maturing assets, and still have enough left over to pay for decommissioning, is considered by industry observers to be a good sign for the sector.
Contact Details and Archive...