On Dec. 11, a hairline crack 5 to 6 inches long was detected during a routine inspection of the Forties Pipeline System (FPS) near Netherley, just south of Aberdeen, Scotland.
As a result, the pipeline’s new owner, Ineos, announced a shut-down, anticipating weeks for repairs. The suspension of this pipeline, with an average daily throughput of 445,000 bpd from 80-plus fields in the North Sea, caused future prices for Brent crude deliverable in February and March to rise above $65 a barrel, before falling back.
Brent crude is the benchmark for pricing much of the world’s seaborne crude and is partly priced on the flow of crude from the FPS. The pipeline also carries one-tenth of Britain’s natural gas supply, causing wholesale gas prices to surge 40% until LNG was released from stock. On Dec. 29, the system was re-opened.
BP, which discovered the Forties field in 1970, was lead operator and commissioned the pipeline. In 1975, BP opened the 235-mile pipeline to transport oil from the U.K.’s oldest and biggest oil field.
The Forties pipeline links fields that include those operated by Apache, BP, Shell and Total, plus the giant 170,000 bpd Buzzard field, operated by the China National Offshore Oil Corporation (CNOOC). It is now a core component of an integrated oil and gas transportation system delivering oil and gas from the Central North Sea fields to several terminals – the oil export terminal at Hound Point, the Dalmeny gas terminal, as well as Ineos’ Kinneil oil and gas processing plant and its Grangemouth refinery.
Tom Crotty suggested U.K. refineries usually reliant on Forties production could access alternative supplies of oil via sea deliveries.
At the end of October 2017, BP sold the Forties pipeline to Ineos for $250 million, sparking criticism in the Scottish newspaper The Daily Record. The sale of an oil pipeline to a chemical-maker was viewed as tantamount to “giving a monkey a machete,” The Daily Telegraph opined on Dec. 11.