BP may Sell Forties Pipeline to Ineos
British oil and petrochemicals major BP and Swiss-based olefins and polyolefins producer Ineos have confirmed they are in talks about Ineos taking over the 100-mile-long Forties Pipeline System, which carries around 40% of the UK’s oil production and eventually supplies Ineos’ refinery at Grangemouth, Scotland.
Talks are believed to have begun a year ago but stalled on pricing issues. Some reports said the price was likely to be in the £200 million range.
The pipeline was originally built to transport 1 million bbl of oil from the Forties field – which was discovered in 1970 – to the Grangemouth complex, formerly owned by BP. The oil group sold its Forties interests to Apache in 2003 and the Grangemouth refinery and chemical complex to Ineos in 2005.
Grangemouth is now Ineos’ largest manufacturing site by volume of products, and home to Scotland’s only crude oil refinery, which produces the bulk of the country’s fuels.
Use of the pipeline has declined steadily as North Sea oil production has dwindled, and the pipeline's average daily throughput is currently put at around 450,000 bbl.
The trade union Unite said it wants to have a word with BP about the proposed sale. Referring to the 2013 conflict between Unite and Ineos’ management at Grangemouth, the union’s Scottish secretary, Pat Rafferty, said: "Our members at BP will have major concerns about the possibility of becoming employees of Ineos, a company with a clear history of attacking our members' pensions, as well as their terms and conditions, in order to maximize profit.”
"If a sale does go ahead,” he said, “we will fight to protect our members in every way we can, and Ineos should work with us to allay their fears." About 300 BP employees currently operate and support the pipeline system.