February 8, 2018, by Rupert Rowling
The North Sea’s Forties Pipeline System — one of the world’s most important crude oil conduits — resumed overnight after a short halt, coming on the heels of a more significant stoppage in December.
“The start-up of the Forties Pipeline System is now underway following the successful resolution of an issue on Feb. 7 with a feed control valve,” Ineos AG said in a statement.
The FPS is a key infrastructure link for North Sea, with Forties crude being one of the grades that derive the global oil benchmark Dated Brent. More than 80 fields feed into the system, which has flows of about 450,000 barrels a day when it’s operating normally. Those fields, including the Buzzard oil field, the U.K.’s largest, don’t have an outlet for their crude when the pipeline system shuts.
Brent crude spiked briefly yesterday on news of the pipeline’s halt. The benchmark grade dropped soon thereafter, closing 2 percent lower Wednesday, as the U.S. Energy Information Administration reported an increase in the nation’s crude stockpiles. Brent resumed its five-day slide Thursday, falling to $64.93 a barrel, near late-December levels, by 11:54 a.m. in London.
Ineos completed its purchase of the pipeline, commonly known as FPS, from BP Plc at the end of October, and since that time the link has suffered two closures. The discovery of a hairline crack in December led to a declaration of force majeure — which exempts the operator from delivering fully on its contractual obligations — and a halt in flows for almost three weeks.
Aside from maintenance stoppages, which have occurred in August at least every two years, there are occasional limits on the flow through the FPS. These include a crimp on output last May, minor restrictions in October 2016 and a short halt the previous month.