INEOS Delays Forties Pipeline Shutdown for 2021

April 8, 2020

Forties Pipeline System (Image Credit: INEOS)
Forties Pipeline System (Image Credit: INEOS)

INEOS FPS, operator of the key UK North Sea pipeline system - the Forties - has further delayed the planned shutdown of the pipeline system, citing customer requests.

The pipeline system, the largest pipeline system in the UK North Sea - opened in 1975 -  transports crude oil and gas liquids from offshore and onshore entry points, processes the liquids at Kinneil and redelivers to the customer Forties Blend crude oil at Hound Point and either raw gas or fractionated gas products at Grangemouth.

The Forties Pipeline System summer shutdown was planned for June 16th, 2020.  INEOS then last month said the shutdown would not start before August 2020 at the earliest

This has now been further postponed, as INEOS on Tuesday said it would postpone the planned shutdown of the Forties Pipeline System in 2021.

"The decision has been taken in the face of the ongoing Government restrictions due to the Coronavirus pandemic and in the interests of providing clarity to its customers and the UK Oil and Gas Industry.INEOS will continue to work with customers and all relevant parties to prepare for the shutdown in 2021," INEOS said.

The shutdown will now be scheduled for Spring 2021.

"INEOS found that there was a desire to delay the shutdown to 2021 by the majority of its customers which it is responding to. In making this announcement it is hoped that customers (and the supply chain) will now be able to plan with greater certainty. INEOS FPS will communicate the exact start date of the shutdown to its customers as soon as it is able to," INEOS said. 

INEOS, which purchased the pipeline system in 2017 from BP, last year said it would invest £500 million to prolong the life of the pipeline system that transports 40% of the UK’s Oil & Gas from North Sea Oil & Gas platforms to the mainland.

This investment is expected to prolong the life of FPS by at least 20 years supporting North Sea production into the 2040s. The pipeline system can transport up to 600,000 barrels of North Sea oil onshore for refining every day.

Following the first shutdown delay announcement, Norway's Rystad Energy calculated that the Forties shutdown delay wouldl add several hundred thousands of extra barrels to the already oversupplied oil market.

Rystad Energy raised its North Sea oil production forecast by 330,000 bpd to 2.96 million bpd for June 2020 and by 190,000 bpd to 3.04 million bpd for July 2020.

"This just adds another ripple to the growing oversupply pool of global liquids – an overhang for 2Q20 that is already so incomprehensibly massive that it will eventually force shut-ins as oil prices fall below short-run marginal costs and logistical challenges arise,“ Rystad Energy oil market analyst Milan Rudel, said late in March.



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