BP to sell North Sea Forties pipeline to Ineos in £199m deal
Energy giant Ineos has struck a deal to acquire the Forties Pipeline System in the North Sea from BP for 250 million US dollars (£199 million).
The transaction, which also includes the Kinneil Terminal, will see Ineos take control of a system that delivers almost 40% of the UK's North Sea oil and gas.
The Forties pipeline was opened in 1975 by BP and today consists of more than 100 miles (161km) of pipes with the capacity to transport 575,000 barrels of oil a day from fields in the North Sea and several Norwegian fields.
Ineos chairman and founder Jim Ratcliffe said: "The North Sea continues to present new opportunities for Ineos.
"The Forties Pipeline System is a UK strategic asset and was originally designed to work together to feed the Grangemouth refinery and petrochemical facilities.
"We have a strong track record of acquiring non-core assets and improving their efficiency and reliability, securing long-term employment and investment."
Under the terms of the deal, Ineos will pay BP 125 million US dollars (£99.5 million) on completion and an earn-out arrangement over seven years that totals up to a further 125 million US dollars.
BP chief executive Bob Dudley said: "While the Forties pipeline had great significance in BP's history, our business here is now centred around our major offshore interests west of Shetland and in the Central North Sea."
Forties employs around 300 BP staff at Kinneil, Falkirk, Dalmeny, Aberdeen and offshore.
Ineos is best known in Britain its shale gas fracking operations.
Unite Scottish secretary Pat Rafferty said: "It's not so long ago that both Grangemouth and the Forties pipeline were owned by all of us, and operated by a nationalised British Petroleum with a responsibility to look at what was good for the country as a whole, not just what was good for a small group of wealthy individuals.
"Both these parts of vital national infrastructure - which are central to the success of the Scottish and wider UK economy - are now essentially in the hands of one man.
"Unite firmly believes that this sale is bad for Scotland and the UK. We demand that both the Scottish and Westminster parliament carry out inquiries, and that every MSP and MP in Scotland has a responsibility to make their position clear.
"Do they believe this sale is in the national interest?"
Responding to the union's criticisms, John McNally, Ineos transition manager for the deal, said: "We're the fourth largest petrochemical company on the planet.
"We have got there by treating our customers with respect, our suppliers with respect and working hand-in-hand with the regulators and the government agencies that control these types of assets in all of the countries that we work in.
"So, we plan to have a very good relationship with the UK Government, a very good relationship with our customers of the Forties Pipeline System and also our suppliers.
"I think this is an excellent deal and I think Ineos have skills that can actually secure longer-term jobs here than other companies could."
Speaking at the company's Grangemouth headquarters, Mr McNally said the company was also looking at potential further acquisitions.
He said: "This is the next step in a strategy of going into North Sea assets, it's not the last step, so watch this space. We're always looking for good acquisition opportunities."
Mr McNally also moved to reassure almost 300 staff who work on the pipeline system throughout Scotland.
He said: "We absolutely have no plans for redundancy.
"We think it is highly-skilled jobs that we want to keep and we want to work with that team and see how do we actually invest to maximise the value of the business going forward.
"Investment is what we want to do now and investment often comes with jobs. So, those two could go hand-in-hand.
"We want to maximise the value of the Forties Pipeline System, we want to extend the economic lifetime of the system as far as possible, so that's a great story for securing longer-term jobs."