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Gasoline Prices Set To Soar This Summer

Gasoline Prices Set To Soar This Summer

A quickly advancing vaccination campaign,…

Forties Pipeline To Remain Shut For Up To Three More Weeks

The Forties Pipeline that was shut down last week for repair of a hairline crack will remain shut for two to four weeks from December 11, the operator of the pipeline responsible for carrying 40 percent of the UK’s North Sea crude oil production, Ineos, said on Tuesday, adding that it was awaiting custom parts to repair the crack.

“Repairs are progressing well and a number of options are currently being developed. The custom parts necessary for some of these options have now been fabricated and are being delivered to the site over the coming days as we progress the preferred method of repair from today,” Ineos said in its media update today.

The operator of the Forties Pipeline said that the hairline crack has not increased since the oil and gas flow through pipeline was stopped on December 11.

Early last week, Brent prices spiked, not only because the pipeline carries some 450,000 bpd, but also because Ineos said that the repair would take “weeks rather than days.”

Last Thursday, Ineos also confirmed that formal force majeure had been declared on relevant contracts.

Not only is the Forties pipeline a key transit route for North Sea oil, the Forties crude blend is the largest component of the Brent-Forties-Oseberg-Ekofisk-Troll (BFOE) complex, which is the basis for the Brent futures contract.

Related: U.S. Solar Nearly Doubles Output In 2017

According to data compiled by Bloomberg, the Forties shutdown will remove an additional 5.5 million to 13 million barrels of oil from the market by the time the pipeline is restarted.

As a result of the Forties shutdown, Ineos’ 200,000-bpd Grangemouth refinery in Scotland, which uses mostly Forties, is operating at “reduced rates” due to the pipeline shutdown.

“The refinery remains in operation. Rates have been reduced slightly but it continues to process the crude oil necessary to meet inland demand for fuels, to meet the needs of Scotland and Northern England,” an Ineos spokesman told Platts on Friday.

By Tsvetana Paraskova for Oilprice.com

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