INEOS has agreed a $250 million deal buy BP’s Forties Pipeline System which delivers almost 40% of the UK’s North Sea oil and gas.
The sale of the 235-mile pipeline system was agreed this month, subject to regulatory and other third party approvals.
When it first opened in 1975, the pipeline transported oil from BP’s Forties field, which was then the UK’s first major offshore oil field, primarily to the Grangemouth refinery and petrochemical plant in Scotland.
BP then owned both the refinery and chemical plant but sold them to INEOS in 2005.
Today the pipeline links 85 North Sea oil and gas assets to the UK mainland and INEOS’ site in Grangemouth where 20% of the oil, which passes down the pipeline, feeds the refinery to provide 80% of Scotland’s fuel.
INEOS Chairman and Founder Jim Ratcliffe described the Forties Pipeline System as a UK strategic asset.
“INEOS will be able to produce greater efficiencies and help secure a competitive, long-term future for this important piece of UK oil and gas infrastructure,” he said.
Last year the pipeline’s average daily throughput was 445,000 barrels oil and 3,500 tonnes of raw gas. But it can transport 575,000 barrels of oil a day.
The 300 people, who operate and support the FPS business at Kinneil, Grangemouth, Dalmeny and offshore, are expected to become INEOS’ Upstream employees.
INEOS already supplies gas to many thousand British homes following its decision to buy the Breagh and Clipper South gas fields in the Southern North Sea from Letter1 in 2015.
On completion of the deal the ownership and operation of Forties Pipeline System, the Kinneil terminal and gas processing plant, the Dalmeny terminal, sites at Aberdeen, the Forties Unity Platform and associated infrastructure will transfer to INEOS.
“This is another very significant deal for INEOS,” said Jim. “The acquisition reunites North Sea and Grangemouth assets under INEOS ownership. INEOS is now the only UK company with refinery and petrochemical assets directly integrated into the North Sea.”