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Oil Jumps As Markets Panic

Oil Jumps As Markets Panic

Oil prices rose slightly on…

The Return Of Oil’s Most Important Pipeline

North Sea Rig

Energy independent Ineos, the operator of the Forties pipeline, said it has started doing pressure tests on the pipeline after it was repaired. Full flow will resume in early January, the company said.

“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, which acquired the Forties network from BP two months ago for US$125 million, shut the pipeline down after discovering hairline cracks on parts of it in early December. Initially, the company jittered markets by saying the repairs might take anywhere between two and four weeks but it later revised its forecast.

Initially, the company said last week, the pipeline wouldn’t operate at full capacity, it would instead only ship small amounts of oil and gas, “as part of a coordinated plan that allows Ineos to carefully control the flow into the system. Based on current estimates the company expects to bring the pipeline progressively back to normal rates early in the new year.”

The shutdown forced more than 80 North Sea platforms to stop pumping oil and gas but now these will be coming back online, too. Just yesterday, Apache announced it had restarted production at the Forties field on December 23 in anticipation of the restart of the pipeline.

Related: Is Saudi Arabia’s Post-Oil Future Realistic?

The Forties pipeline carries about 40 percent of UK’s North Sea oil and gas to shore in Scotland and has a daily capacity of half a million barrels of crude, although this month the average daily was 406,000 bpd prior to the shutdown. 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.

By Irina Slav for Oilprice.com

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