Supermajor BP has has agreed to sell its Forties Pipeline System (FPS) business to petrochemical giant Ineos.
The pipeline was first opened in 1975 to transport oil from BP’s Forties field, the UK’s first major offshore oil field.
Her majesty Queen Elizabeth II officialy opened the pipeline when visiting BP’s offices in Dyce.
Here Energy Voice rounds up everything we know so far about the deal between the energy giant and Ineos deal.
Money, money, money
According to the terms of the agreement Ineos will pay BP a consideration of up to $250 million for the Forties Pipeline business.
This is made up of a cash payment of $125 million on completion of the deal and an ‘earn-out’ arrangement where future cash payments are dependent on performance.
This secondary arrangement could see a total of $125million paid out over seven years.
The gross assets being handed over to Ineos control were valued at $816 million as at 31 December 2016.
For the year ended, a loss of $169 million arose in relation to these assets.
Proceeds from the sale will be used by BP for general corporate purposes.
Working nine to five
On completion of the deal the ownership and operation of Forties Pipelne, the Kinneil terminal and gas processing plant, the Dalmeny terminal, sites at Aberdeen, the Forties Unity Platform and associated infrastructure will transfer to INEOS
It is expected that around 300 people that operate and support the business at Kinneil, Grangemouth, Dalmeny and offshore will become part of the Ineos Upstream business.
In 2016, the pipeline’s average daily throughput was 445,000 barrels of oil and some 3,500 tonnes of raw gas a day.
Take me I’m yours
The deal includes the main 245mile offshore and onshore pipelines, existing customer contracts and associated assets and pipeline infrastructure.
In addition, Ineos will also take on responsibility for:
– Forties pipeline equipment on Apache’s Forties Charlie platform.
– The Forties Unity platform.
– BP’s interest in the GAEL N (54.3%), and GAEL S (30.5%) pipelines.
– The original and now redundant 32” sea-line.
– St Fergus-to-Cruden Bay natural gas liquids line.
– Cruden Bay terminal.
– Netherley, Brechin and Balbeggie pumping stations.
– Kinneil terminal.
– LPG storage and export at Grangemouth and Grangemouth docks.
– Kinneil-to-Dalmeny pipelines.
– Dalmeny tank farm and pipelines to Hound Point.
– Hound Point jetties.
As part of the agreement, Ineos will also assume all decommissioning liabilities.
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