BP has announced that it has agreed to sell its Forties pipeline system (FPS) business to INEOS. The deal includes the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities.
Subject to partner, regulatory and other third-party approvals, operatorship of the FPS assets and business will transfer from BP to INEOS upon its completion. The sale will not affect BP’s existing rights to capacity in FPS.
Under the terms of the agreement, INEOS will pay BP a consideration of up to US$250 million for the business, comprising a cash payment of US$125 million on completion and an earn-out arrangement over seven years that totals up to US$125 million.
Built, owned and operated by BP, the Forties pipeline was opened in 1975 to transport oil from the Forties field, the UK’s first major offshore oil field. Today, the FPS carries liquids production from some 85 fields in the Central and Northern North Sea and several Norwegian fields on behalf of around 40 companies. The system has a capacity of 575 000 bpd of oil. BP sold its interests in the Forties field to Apache in 2003 and sold the Grangemouth refinery and chemical plants to INEOS in 2005.
BP’s 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 increase new exploration. While the Forties pipeline had great significance in BP’s history, our business here is now centred around our major offshore interests west of Shetland and in the Central North Sea.
“The pipeline has long been an important feedstock supplier to INEOS at Grangemouth. We believe that through also owning FPS, INEOS will be able to realise greater integration benefits and help secure a competitive long-term future for this important piece of UK oil and gas infrastructure.”
INEOS Chairman and Chief Executive Officer, Jim Ratcliffe, commented: “The North Sea continues to present new opportunities for INEOS. The FPS 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 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.”
Mark Thomas, BP’s North Sea Regional President, said: “This allows us to further focus our North Sea business around our core offshore assets - bringing new fields into production, redeveloping and renewing existing producing facilities and acquiring and exploring new acreage and interests through licence rounds and farm-ins.
“As with our recent agreement with EnQuest, we believe this is a good example of having the ‘right assets’ in the ‘right hands’, offering new opportunities for the assets and benefitting the UKCS, in the spirit of the government’s aim of maximising economic recovery of the UK’s oil and gas resources.”
FPS is expected to transition to INEOS as a fully operational entity with those staff who operate and support the various elements of the business expected to transfer with the business.
BP aims to complete the sale and transfer of operatorship during 2017.
Read the article online at: https://www.worldpipelines.com/contracts-and-tenders/03042017/ineos-to-purchase-bps-forties-pipeline-system/