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Platforms silent as repairs under way

Pipeline shutdown costing oil industry £20m a day

Deirdre Michie

Deirdre Michie: ‘significant issues for the industry’


The closure of a key oil pipeline is costing the industry £20 million a day in lost production, according to the industry body.

The Forties pipeline carries 400,000 barrels a day or 40% of UK crude North Sea oil across land for processing at Grangemouth but has been closed after a hairline crack was discovered.

Repairs are under way on site near Netherley in Aberdeenshire and a 300m safety cordon has been put in place. Ineos, which owns the pipeline, said the work will take at least two weeks.

More than 80 platforms have suspended production.

Deirdre Michie, chief executive of Oil and Gas UK, said: “We hope this can be resolved safely and as quickly as possible.

“We have been in touch with Ineos and are closely monitoring the situation.

“The shutting down of the Forties pipeline does cause significant issues for our industry, financially, operationally and commercially – 40% of oil production is now shut in and the resulting lost production is worth around £20m per day at current oil prices to industry.”

After surging above $65 a barrel on Monday, traders on Tuesday took profits and Brent crude settled down $1.35 or 2% at $63.34. US crude was trading at $56.91 a barrel, 82 cents, or 1.4% lower.

North East Liberal Democrat MSP Mike Rumbles asked for reassurances from the Scottish Government over safety to residents and workers.

Business Minister Paul Wheelhouse told MSPs in the parliament that he believed the issue would be resolved in days. 

However, Mr Rumbles said later: “We are now being told that this shutdown could take weeks rather than days. 

 


“People working in the North East are already worried that the shutting down of the Forties pipeline will cause significant issues for the area financially, operationally and commercially. 

“Meanwhile local residents are looking for reassurances from Ministers that there are no further, as yet undetected, fractures. It is important that they are told if further works are in the pipeline. 

“The Forties route is a critical part of the UK’s energy infrastructure and we have seen that it has the power to shift oil prices.

“The Scottish Government must engage in a close dialogue with companies operating across the North East and the North Sea to support all workers affected by the temporary closure and make contingency plans for what will need to happen if this pipeline cannot reopen for some time.”

Ineos said in a statement on Tuesday: “We are working closely with government and other stakeholders to minimise the impact of the closure as far as possible on communities, our customers and the country.”



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