Petrochemicals giant Ineos will invest £500 million to extend the life of a key North Sea pipeline system by “at least 20 years”.
Ineos, led by the UK’s richest man, Sir Jim Ratcliffe, said its “transformational improvement” plan would make the Forties Pipeline System (FPS) more reliable, supporting North Sea production well into the 2040s.
The programme involves an upgrade to “environmental systems” and the application of new technology.
The 310-mile long FPS opened in 1975 and is responsible for transporting about 40% of UK North Sea oil and gas to shore.
Its maximum capacity is 600,000 barrels of oil per day.
Ineos completed the acquisition of the pipeline system from BP for £190 million in October 2017.
But the pipeline had to shut down for several weeks in December 2017 after a leak was discovered near Netherley, Aberdeenshire, leading to the disruption of North Sea production and the evacuation of local residents.
Andrew Gardner, chief executive of Ineos FPS, which has an office in Kingswells, Aberdeen, said: “North Sea oil and gas producers are telling us that they want to be in the North Sea well into the 2040s, so we are making this commitment to be there with them.
“Following acquisition of FPS in 2017, we are now embarking on a period of investment that will guarantee that the system can support them for decades to come.”
The investment in FPS is part of a wider £1 billion spending spree by Ineos on its UK assets.
The company is investing £350m at its Grangemouth site in Scotland to develop a new steam and power plant.
It will also invest £150m in a new plant in Hull.
Mr Ratcliffe, founder and chairman of Ineos, said: “Ineos is a supporter of British manufacturing and this £1bn investment underlines our confidence in our business in the UK.
“These investments will ensure that our UK assets continue to be world-class for many years to come.”
Ineos announced its arrival in the North Sea in 2015 when it bought stakes in several fields, including Breagh and Clipper South, from Dea.
It completed a deal to buy Dong Energy’s oil and gas business for £1bn in September 2017 to become one of the North Sea’s top producers.
The transaction gave it a large package of North Sea assets, including stakes in Total’s Laggan Tormore project and Edradour-Glenlivet fields and Equinor’s Rosebank development.
Ineos was in talks with ConocoPhillips to buy the US firm’s North Sea portfolio, but talks broke down earlier this year.