Union's fears over Ineos deal to buy Forties pipeline

Union bosses are urging for an 'urgent' inquiry into today's announcement that the Forties Pipeline System is being sold by BP to Ineos.

By The Newsroom
Monday, 3rd April 2017, 2:37 pm
Updated Tuesday, 9th May 2017, 7:09 pm
Peter Miller, vice president Midstream BP North Sea with CEO of INEOS O&P UK, John McNally, transition manager for the Forties Pipeline Systems deal
Peter Miller, vice president Midstream BP North Sea with CEO of INEOS O&P UK, John McNally, transition manager for the Forties Pipeline Systems deal

Unite is calling on the Scottish and Westminster parliaments to investigate the proposed £199 million sale.

The pipeline transports on average around 450,000 barrels of oil per day - about 40 per cent of UK production.

It is one of the oldest in the sector, having started operating in the Forties field in 1975.

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The system links 85 North Sea Oil and Gas assets to the UK mainland, and to the Ineos site in Grangemouth.

Unite was involved in two major disputes with Ineos at the Grangemouth refinery in 2008 and 2013. During the second dispute, the company – owned by billionaire Jim Ratcliffe – threatened to close the facility down.

Pat Rafferty, the union’s Scottish secretary, said: “It’s not so long ago that both Grangemouth and the Forties pipeline were owned by all of us, and operated by a nationalised British Petroleum with a responsibility to look at what was good for the country as a whole, not just what was good for a small group of wealthy individuals.

“Both these parts of vital national infrastructure - which are central to the success of the Scottish and wider UK economy are now essentially in the hands of one man.

“Unite firmly believes that this sale is bad for Scotland and the UK. We demand that both the Scottish and Westminster parliament carry out inquiries, and that every MSP and MP in Scotland has a responsibility to make their position clear. Do they believe this sale is in the national interest?”

BP employs around 300 staff to operate and support the Forties Pipeline System at Kinneil, Grangemouth, Dalmeny and offshore will become part of the Ineos Upstream business.

Unite has voiced concerns about the safety of their jobs, pensions, terms and conditions under Ineos.

Meanwhile, the news has been cautiously welcomed by Falkirk East MSP Angus MacDonald who said: “Whilst I’m disappointed that BP have decided to offload this asset I am encouraged that Ineos regard the purchase of the Forties pipeline and the Kinneil plant as a strategic asset.

“I would encourage Ineos management to engage constructively with the union representatives to ensure a smooth transition and employee confidence in the coming months and years.”

Ineos boss Jim Ratcliffe said: “The North Sea continues to present new opportunities for Ineos. The Forties Pipeline System is a UK strategic asset and was originally designed to work together to feed the Grangemouth refinery and petrochemical facilities.

“We have a strong track record of acquiring non-core assets and improving their efficiency and reliability, securing long term employment and investment. I am delighted that we can now bring this integrated system back under single ownership in Ineos.”

Bob Dudlen, BP group chief executive, said: “The pipeline has long been an important feedstock supplier to Ineos at Grangemouth. We believe that through also owning FPS, Ineos will be able produce greater efficiencies and help secure a competitive long-term future for this important piece of UK oil and gas infrastructure.”

Under the terms of the deal Ineos will pay BP a cash payment of £99.5 million ($125 million) on completion and an earn-out arrangement over seven years that could total another £99.5 million ($125 million).