LONDON, UK: BP PLC said that it has agreed to sell its Forties Pipeline System (FPS) in the North Sea, UK to Ineos AG. The assets include main Forties offshore and onshore pipelines and other associated pipeline interests and facilities.
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 $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.
BP aims to complete the sale and transfer of operatorship during 2017.
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. The system has a capacity of 575,000 barrels of oil a day.
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. Around 300 BP staff are currently associated with operating and supporting the FPS business at Kinneil, Falkirk, Dalmeny, Aberdeen and offshore
BP aims to complete the sale and transfer of operatorship during 2017.
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 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,” said Bob Dudley, CEO, BP.
“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,” said Jim Ratcliffe, chairman and CEO, Ineos.
© Worldofchemicals News
Read More: BP to sell North Sea pipeline to Ineos for $250 mn
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