Retaining BP’s existing rights to capacity in FPS, the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities will be sold
BP has decided to sell its Forties Pipeline System (FPS) business to INEOS, with its assets including the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities.
Operator-ship of the FPS assets and business will transfer on completion from BP to INEOS, subject to partner, regulatory and other third party approvals. However, BP’s existing rights to capacity in FPS will not be affected by the sale. INEOS will pay BP a consideration of up to $250 million for the business, comprising a cash payment of $125 million on completion and an earn-out arrangement over seven years that totals up to $125 million, as per the stipulations of the contract.
Bob Dudley, BP group chief executive said, “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 centered on our major offshore interests west of Shetland and in the Central North Sea. We believe that through also owning FPS, INEOS will be able to realize greater integration benefits and help secure a competitive long-term future for this important piece of UK oil and gas infrastructure.”
Opened in 1975, the Forties pipeline was built, owned and operated by BP with the aim of transporting oil from the Forties field, the UK’s first major offshore oil field. On behalf of around 40 companies, FPS currently carries liquids production from some 85 fields in the Central and Northern North Sea and several Norwegian fields. The system has a capacity of 575,000 barrels of oil a day. In 2005, BP sold the Grangemouth refinery and chemical plants to INEOS and in 2003, sold its interests in the Forties field to Apache.
Jim Ratcliffe, INEOS chairman and chief executive officer 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 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.”
Currently, there are around 300 BP staff associated with operating and supporting the FPS business. With these staff expected to transfer with the business, FPS is expected to transition to INEOS as a fully operational entity. BP aims to complete the sale and transfer of operator-ship during 2017, subject to the receipt of regulatory and other third party approvals. PWKD05042017