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The Forties pipeline system in the North Sea has begun pumping crude oil at half of its normal capacity, an unnamed source from the trading circles told Reuters. The Forties system supplies 40 percent of the UK’s crude oil.
Ineos, the operator of the Forties pipeline, yesterday said it has started doing pressure tests on the pipeline after it was repaired. Full flow will resume in early January.“A small number of customers are now sending oil and gas through the pipeline at low rates as part of a coordinated plan that allows Ineos to carefully control the flow and pressure in the system,” the company said.
Ineos shut down the Forties system in early December, following the discovery of hairline cracks. Initially, the company said repairs could take anywhere from two to four weeks, sending Brent soaring above US$65 a barrel. The pipeline normally pumps about 450,000 bpd, although its capacity, according to its original operator, BP, was half a million barrels of crude. BP sold the Forties system to Ineos earlier this year for US$125 million.
After the shutdown, analysts polled by Bloomberg estimated that depending on how long the pipeline network remained shuttered, it could take between 5.5 million and 13 million barrels of crude off the global market.
Now, the UK’s energy industry body Oil and Gas UK has estimated that the shutdown has cost US$26.85 million (20 million pounds) in lost production daily. Because of the repairs, more than 80 platforms in the UK section of the North Sea had to stop producing but they are now coming back online.
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Following the latest updates from Ineos about the Forties system, both Brent crude and WTI started sliding, though still keeping higher than they traded before the shutdown announcement.
At the time of writing, Brent crude changed hands at US$65.75 a barrel, while WTI traded at US$59.56.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.