North Sea pipeline operator invokes force majeure

The operator of a damaged North Sea crude pipeline has invoked a clause that exempts it from fulfilling contracts, underlining the scale of the damage that has sent oil and gas prices surging. Ineos, the operator of the Forties network of pipelines that shifts almost 40 percent of the North Sea oil and gas production, on Thursday declared force majeure which exempts an entity from obligations if there are causes beyond its control. “Although North Sea cargoes are often delayed from one month to the next, it is very rare for force majeure to be declared, highlighting the severity of the issue,” said analysts at consultancy FGE. The Forties network has been closed since Monday, as Ineos assesses how to fix the hairline crack in a section onshore, close to Aberdeen in Scotland. The company, which bought the pipelines from energy company BP in October, expects it to be “a matter of weeks” before the crack is repaired. The pipeline system carries about 450,000 barrels a day of Forties crude from more than 80 fields to the Kinneil processing terminal in Scotland. From there the oil is loaded on to tankers, stored or piped to the 200,000 b/d Grangemouth refinery, which is also owned by Ineos. The company said that although the plant remains in operation it has reduced crude processing rates.

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