Total Sells North Sea Gas Pipelines
French oil major Total has agreed to sell some of its gas pipeline assets in the UK's North Sea to North Sea Midstream Partners, an affiliate of U.S.-based private equity firm ArcLight Capital, for 585 million pounds ($907 million).
The sale includes the Frigg UK (FUKA) and SIRGE gas pipelines and the St. Fergus gas terminal, Total said in a statement on Thursday.
Europe's second-largest oil company, Total unveiled a plan earlier this year to cut investments and jobs, and accelerate its asset sale program after oil prices more than halved in the past year.
"Infrastructure assets like these are not part of our core business," Michael Borrell, head of continental Europe and Central Asia at Total's exploration and production unit, said in a conference call with reporters.
But the sale should not be misinterpreted as a vote of no-confidence in the North Sea, he said.
The FUKA is a 362-kilometer, 32” gas pipeline that was originally constructed in 1977 to connect the Frigg Field on the UK - Norway median line to the St. Fergus Gas Terminal in Scotland. The Frigg Field is now decommissioned but the FUKA pipeline is still operational, delivering gas from some 20 fields in the Northern North Sea to the terminal at St Fergus. Total holds a 100 percent operated interest in the FUKA pipeline.
The St. Fergus Gas Terminal is a three-train processing plant with a capacity of 2,648 million cubic feet of gas per day (Mmscf/d), currently serving over 20 fields. Total holds a 100 percent operated interest in the terminal.
The SIRGE is a 234-kilometer, 30” gas pipeline with a capacity of 665 Mmscf/d connecting the Shetland Gas Plant to the FUKA pipeline. Total holds a 67 percent operated interest in the SIRGE pipeline alongside Dong E&P (UK) Limited (18.3 percent), Chevron North Sea Limited (7.2 percent) and OMV (UK) Limited (7.5 percent).
Total expects to become the largest oil and gas producer in the UK by the end of the year, it said in the statement. The start-up of its third hub in British waters, the Laggan-Tormore project in the Shetlands, is expected later this year.