Jim Ratcliffe’s INEOS to buy BP’s North Sea Forties Pipeline for £250m

News

Oil giant BP has announced that it has agreed to sell its Forties Pipeline System (FPS) to UK chemicals manufacturer Ineos.

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 235 mile system links 85 North Sea oil and gas assets to the UK mainland and the INEOS site in Grangemouth in Scotland. The system has a capacity of 575,000 barrels of oil a day and delivers almost 40 per cent of the UK ‘s oil and gas. 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 said that the firm’s North Sea activities will now focus on bringing new fields into production, redeveloping and renewing existing producing facilities and acquiring and exploring new interests. “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,” said BP’s chief executive Bob Dudley.

Ineos boss Jim Ratcliffe – who also has ambitions to drive the UK’s embryonic fracking industry and even recently announced plans to enter vehicle manufacturing - hailed the deal as great opportunity for his firm. “The Forties Pipeline System is a UK strategic asset and was originally designed to work together to feed the Grangemouth refinery and petrochemical facilities,” he said. “I am delighted that we can now bring this integrated system back under single ownership in INEOS.”

The FPS system primarily comprises a 169km (105 mile), 36” pipeline from the unmanned offshore Forties Unity platform to the onshore terminal at Cruden Bay. From there a 36” onshore pipeline transports the oil 209km (130 miles) south to the Kinneil facilities, adjacent to the Grangemouth refinery and chemical plant, where it is processed and stabilised before output is sent either for export via the Dalmeny terminal and Hound Point loading jetty or on to Grangemouth.

Subject to the receipt of regulatory and other third party approvals, BP aims to complete the sale and transfer of operatorship during 2017.