by Thomas Duncan
PETROCHEMICAL firm INEOS have agreed to purchase the Forties Pipeline System in the North Sea from BP for $250m (£199m).
The 235 mile pipeline transfers 40% of UK oil production- at 245,000 barrels per day.
The Forties Pipeline was opened in 1975 to transport oil from the Forties Field- the UK’s first major offshore site.
The agreement will see INEOS take control of the the Kinneil terminal and gas processing plant, the Dalmeny terminal, sites at Aberdeen and the Forties Unity Platform, which employ 300 people.
Jim Ratcliffe, INEOS chairman and founder, 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. I am delighted that we can now bring this integrated system back under single ownership in INEOS.”
The pipeline links 85 North Sea oil and gas fields to the UK mainland, and to the INEOS site in Grangemouth. The system primarily comprises a 105 mile pipeline from the unmanned offshore Forties Unity platform to the onshore terminal at Cruden Bay. From there an onshore pipeline transports the oil 130 miles south to the Kinneil facilities.
They say 20% of the oil that passes through the pipeline will feed their Grangemouth plant and produce 80% of Scotland’s energy.
The terms of the agreement Ineos will pay BP US$125m (£99.5m) in cash up front and an earn-out arrangement over seven years that totals up to a further US$125m.
BP have sold the pipeline to concentrate their resources on their interests elsewhere in the North Sea.
BP group chief executive Bob Dudley commented: “BP is returning to growth in the North Sea as we bring important new projects, including the Quad 204 redevelopment and Clair Ridge, into production and pursue further opportunities beyond these. While the Forties pipeline had great significance in BP’s history, our business here is now centred around our major interests west of Shetland and in the Central North Sea.