The assets comprise the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities.
Subject to approvals, operatorship of the FPS business will transfer to INEOS during 3Q on completion of the deal, which could eventually net BP $250 million.
Group CEO Bob Dudley said: “While the Forties pipeline had great significance in BP’s history, our business here is now centered around our major offshore interestswest of Shetland and in the central North Sea.
“The pipeline has long been an important feedstock supplier to INEOS at Grangemouth [eastern Scotland]. 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.”
BP opened the Forties pipeline in 1975 to transport oil from Forties, the UK’s first major offshore oil field. Today the FPS transports liquids from around 85 fields in the UK central and northern North Sea and several Norwegian fields, on behalf of around 40 companies: its throughput capacity is 575,000 b/d.
In 2003,Apache acquired BP’s interests in the Forties field.
The agreement will further expand the INEOS Upstream business following the company’s acquisition of theBreagh and Clipper South gas fields in the southern North Sea from Letter1 in 2015. The acquiring entity will be INEOS FPS.
INEOS chairman and CEO Jim Ratcliffe said: “The North Sea continues to present new opportunities for INEOS… We have a strong track record of acquiring non-core assets improving their efficiency and reliability, securing long-term employment and investment.”
Mark Thomas, BP North Sea regional president, said: “This allows us to further focus our North Sea business around our core offshore assets - bringing new fields into production, redeveloping and renewing existing producing facilities, and acquiring and exploring new acreage and interests through license rounds and farm-ins.
“As with ourrecent agreement with EnQuest, we believe this is a good example of having the ‘right assets’ in the ‘right hands,’ offering new opportunities for the assets and benefitting the UKCS, in the spirit of the government’s aim of maximizing economic recovery of the UK’s oil and gas resources.”
FPS is set to transfer to INEOS as a fully operational entity along with staff that operate and support the various elements of the business. Around 300 BP staff are involved with operating and supporting the FPS at Kinneil, Falkirk, Dalmeny, Aberdeen, and offshore.
The FPS system primarily comprises a 169-km (105-mi), 36-in. pipeline from the unmanned offshore Forties Unity platform to the onshore terminal at Cruden Bay.
From there a 36-in. overland pipeline transports the oil 209 km (130 mi) south to the Kinneil facilities, adjacent to the Grangemouth refinery and chemical plant, for processing and stabilization before being exported via the Dalmeny terminal and Hound Point loading jetty or sent onwards on to Grangemouth.
The deal includes:
- FPS 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
- 36-in. Forties sea-line
- Redundant 32-in. sea-line
- St Fergus-to-Cruden Bay natural gas liquids line.