Ineos AG is buying BP Plc’s (LON:BP) Forties North Sea pipeline for $250 million.
The assets being sold include the main Forties onshore and offshore pipelines and the other pipeline facilities and interests.
BP have said in a statement that Ineos will make a cash payment of $125 million on completion of the deal, and transfer future earnings of $125 million over the next seven years.
“The North Sea continues to present new opportunities for Ineos.” said Jim Ratcliffe, the chairman and founder of 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.”
Both companies confirmed last month that they were in talks for the pipeline, which transports about 450,000 barrels of oil per day on average.
BP is selling the pipeline to Ineo in order to help pay for the 2010 oil spill in the gulf of Mexico. BP has set aside over $50 billion to pay for this.
“BP is returning to growth in the North Sea as we bring important new projects, including the Quad 204 redevelopment and Clair Ridge, into production and increase new exploration,” said the BP chief executive Bob Dudley.
“While the Forties pipeline had great significance in BP’s history, our business here is now centered around our major offshore interests west of Shetland and in the central North Sea. The pipeline has long been an important feedstock supplier to Ineos at Grangemouth.”
Ineos has been expanding in oil and gas exploration in recent years. The petrochenical producer bought a portfolio of 15 U.K. licenses from Engie SA earlier this year.
Ineos is best known in the UK for its shale gas fracking operations.