The United Kingdom’s most important crude oil pipeline is the 450,000 barrel-a-day Forties pipeline that has been closed since December 11 to repair a leak. Pipeline flows were restarted earlier this week and pipeline operator Ineos said it had reached about half the usual rate.
The Forties pipeline is the largest of the five major North Sea pipeline systems and the recent shutdown has helped push the price of Brent crude to more than $67 a barrel. The pipeline’s shutdown forced the shutdown of several producing North Sea fields that will also have to be restarted before flows return to normal.
According to a report at Reuters, only six Forties cargoes of 600,000 barrels each are included in February’s export schedule, down from 20 originally scheduled for January delivery. The first February cargo is not scheduled to load until February 19.
The Forties pipeline also supplies the refinery at Grangemouth on Scotland’s Firth of Forth. BP sold the refinery to Petroineos, a joint venture between Petrochina and U.K.-based Ineos, earlier this year. Ineos is a privately held U.K.-based chemical company.
S&P Global Platts Oil Futures editor Geoffrey Craig commented:
In Northwest Europe, reduced run rates at the Grangemouth refinery in Scotland because of the Forties pipeline closure have started to have an impact on the region’s gasoline supplies.
After five straight draws, gasoline stocks in the Amsterdam-Rotterdam-Antwerp hub fell to 833,000 metric tons (mt) [about 6.1 million barrels] the week ended December 20, according to data from PJK International.
Crude prices also have been propped up by a Tuesday attack on a Libyan pipeline that will be out of service for about a week, according to Reuters.
Brent crude traded down less than 1% in London today at $65.92, while West Texas Intermediate (WTI) traded down about 0.5% in New York at $59.50, after touching $60 a barrel Tuesday.