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UK Forties oil cargoes delayed for weeks by pipeline shutdown

Published 15/12/2017, 11:39
© Reuters.  UK Forties oil cargoes delayed for weeks by pipeline shutdown
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By Alex Lawler

LONDON (Reuters) - The loading dates of Forties oil cargoes, which help set the global Brent benchmark, have been delayed by at least two weeks and further hold-ups are likely, trade sources said, following the unplanned closure of the North Sea Forties pipeline.

The 169-km (105-mile) pipeline, which carries around a quarter of all North Sea crude output and about a third of Britain's offshore gas production, has been closed since Monday, following the discovery of a small crack in part of the system onshore in Scotland.

Cargo owners were advised this week of delays to shipments that had been due to load from mid-December, trade sources said. Forties was set to export 21 cargoes of 600,000 barrels each, or 406,000 barrels per day, in December and 20 cargoes in January.

"Probably everybody's got revised dates now," a North Sea trader said, adding his Forties cargo had been pushed back by slightly more than two weeks. "I'm sure they will change again and I doubt the cargoes will actually load in those windows."

The delays are in line with the timeframe that pipeline owner Ineos has given for repairs of two to four weeks. The company, which bought the system from BP (LON:BP) in October for $250 million, said on Friday it was still assessing the situation.

"There's no significant change," Ineos spokesman Richard Longden said. "The team's now working through the repair options. We're trying to get on with that as quickly and safely as we can."

The company this week declared force majeure, which suspends its contractual obligations due to circumstances beyond its control, on Forties deliveries. This is believed to be the first force majeure on a major North Sea production stream in decades.

BP still coordinates the Forties cargo loading programme, despite no longer owning the pipeline.

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