Britain’s aim to scrap coal…
India is making the push…
BP, which owns about one-third of one of the biggest gas pipelines in the UK, is selling that stake for $486 million, giving the investment firm Antin Infrastructure Partners nearly complete ownership of the conduit.
This keeps BP active in its program for 2014 and 2015 to dispose of assets in an effort to raise $10 billion in cash to keep it strong during the current period of low energy prices. The sale of the pipeline, known as the Central Area Transmission system (CATS), is expected to close by year’s end.
BP now owns 36.22 percent of CATS, a system that combines processing facilities with a 250-mile pipeline that moves more than 48 million cubic meters of gas per day to Teesside on Britain’s east coast from a group of energy fields in the North Sea about midway between Scotland and southern Norway.
Related: Is Saudi Arabia Setting The World Up For Major Oil Price Spike?
CATS handles around 8 percent of Britain’s annual gas production, but the sale of its stake would not affect the company’s right to use it to transport its own gas, BP said.
“CATS has been a great business for BP,” said Trevor Garlick, BP’s regional president for the north sea, but he added, “[W]e believe securing this new owner will ensure a better long-term future for this key piece of North Sea infrastructure.”
The asset dump will have a minimal, if non-existent, effect on jobs for the 60 workers involved in BP’s share of CATS. Antin said it will absorb the pipeline’s BP staff.
This is the second time in a year a major stakeholder has sold its interest in CATS. Last year, BG sold its own share in the pipeline to Antin. Once its deal with BP is closed, Antin will own 99 percent of the pipeline.
Related: The Latest Media Attempts To Suppress Oil Prices
Last year, as oil prices were dropping rapidly, BP’s CEO, Bob Dudley, said the company would begin broad restructuring in the North Sea, once rich in energy but where operations now are becoming less productive and more expensive. As a result, BP is among several large energy companies that are moving out of the region.
Nevertheless, Garlick stressed, “The North Sea is an important region for BP. Our strategy here is to focus our resources and investment to create an efficient, sustainable and competitive business which will contribute to UK energy security for many years to come.”
Such statements notwithstanding, BP’s actions speak louder. The company already has cut capital spending for 2015 by about 20 percent, plans to lay off thousands of employees and, in January, imposed a freeze on wages for the first time in years.
Related: OPEC Says US Oil Boom Will End This Year
As for Antin, it is already looking for a company to operate CATS. Antin itself is not an energy company but focused on investments in European telecommunications, transportation as well as energy.
And because BP now operates CATS, Antin has hired away Andy Hessell, who until now was BP’s vice president of commercial operations in the North Sea, to lead the pipeline’s new management team.
“We have exciting plans to grow and develop CATS through additional investment,” said Mark Crosbie, a managing partner of Antin.
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com