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Monday, October 18, 2021

North Sea pipeline operator may halt deliveries

North Sea pipeline operator may halt deliveriesLONDON: The operator of a North Sea pipeline said Thursday it might not be able to make deliveries as repairs to a cracked pipe could take weeks, but government officials said the shutdown posed no risks to supplies of gas and oil to consumers.

The Forties pipeline system, which normally carries 40 percent of UK oil and gas production in the North Sea, was recently acquired by multinational chemicals group Ineos.

Ineos invoked a legal escape clause allowing producers to miss contracted deliveries because of circumstances beyond their control.

“We can confirm that formal force majeure has been declared on relevant contracts,” it said in a statement

The group shut down the North Sea pipeline on Monday, causing a spike in oil and gas prices that day, and now says the repairs will take “weeks rather than days”.

The fault was discovered on an onshore section of the pipeline near the Scottish city of Aberdeen last Wednesday, and only stopped expanding in size on Tuesday.

Oil and Gas UK, the offshore industry trade association, noted on Tuesday that “40 percent of oil production is now shut in” as a result of the pipeline failure.

The Forties pipeline transports around 450,000 barrels of crude oil per day, and its current shutdown equates to losses of around £20 million ($27 million, 23 million euros) per day for the industry.

Ineos acquired the intricate network of pipes from British energy giant BP for $250 million (212 million euros) at the end of October.

The UK government insisted that the shutdown would not affect people seeking to heat their homes in the coming weeks as the winter holidays approach.

“There is no security of supply issue for fuel or gas supplies as a result of the repairs needed to the Forties pipeline,” said a spokeswoman for the Department of Business, Energy and Industrial Strategy.

It comes as Russian gas producer Novatek has sold its first shipment of liquified natural gas from the newly-opened Yamal LNG terminal in the Arctic to UK energy supplier Petronas LNG.

Copyright AFP (Agence France-Press), 2017

Source: Brecorder.com

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