BP sells Forties pipeline to Ineos
UK oil giant BP has agreed to sell its Forties Pipeline System (FPS) business, with assets including the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities, to chemicals company Ineos.
Following talks in March to sell the pipeline, BP said on Monday that, subject to partner, regulatory and other third party approvals, operatorship of the FPS assets and business will transfer on completion from BP to Ineos.
Ineos noted that, at this point, it will be responsible for a UK asset that delivers almost 40% of the UK’s North Sea oil and gas.
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.
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, 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 barrels of oil a day. BP sold its interests in the Forties field to Apache in 2003 and sold the Grangemouth refinery and chemical plants to Ineos in 2005.
According to BP, 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. Their contractual terms and conditions are protected under UK Transfer of Undertakings (Protection of Employment) regulations (TUPE).
Around 300 BP staff are currently associated with operating and supporting the FPS business at Kinneil, Falkirk, Dalmeny, Aberdeen and offshore. BP will now begin consultation with in-scope staff for both the unionized and non-unionized populations.
Subject to the receipt of regulatory and other third party approvals, BP said it aims to complete the sale and transfer of operatorship during 2017.
The agreement further expands the Ineos Upstream business following the acquisition of the Breagh and Clipper South gas fields in the Southern North Sea from Letter1 in 2015, which currently supply gas to 1 in 10 British homes.
The acquiring entity will be Ineos FPS Limited, which forms part of Ineos Limited but is not part of the IGH SA Group.
Published 4 April 2017
is one of the world's largest oil companies serving customers every day in more than 90 countries across six continents. BP's activities are Exploration and Production; Refining and Marketing; and Alternative Energy, its low-carbon energy business.
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