LONDON (Reuters) - Flows through Britain’s most important oil pipeline, Forties, have recovered to around half the normal rate, a trading source said on Wednesday, suggesting a steady return to normal operations after a rare unplanned shutdown.
The closure since Dec. 11 of the pipeline, which normally pumps about 450,000 barrels per day, and supply disruptions in Libya have helped push oil prices LCOc above $67 a barrel, their highest since mid-2015. [O/R]
Ineos, the pipeline’s operator, restarted the flow earlier in the week and has pledged to resume full volumes in early January. On Wednesday, Ineos could not immediately comment on current flow rates.
“It’s a slow ramp up, but it’s about half the normal rate,” the trade source familiar with the operations said.
Forties plays an important role in the global market as it is the biggest of the five North Sea crude streams underpinning Brent, a benchmark used for oil trading in Europe, the Middle East, Africa and Asia.
The system, which also carries a third of Britain’s offshore natural gas output, was shut down after a crack was found.
Oil companies that pump into the pipeline, including Royal Dutch Shell, were restarting oilfields that had to be shut during the repairs. Buzzard, Britain’s largest oilfield, was producing over half its normal level, a trade source said.
Ineos was forced to declare force majeure on deliveries of Forties crude oil, natural gas and condensate, suspending its contractual obligations to customers by citing circumstances beyond its control.
This is believed to be the first force majeure on a major North Sea production stream in decades. Ineos didn’t say when it expected to lift the force majeure.
In a sign of normality returning, an export schedule of Forties crude oil cargoes in February was sent out to cargo owners on Wednesday, although the number of shipments is much lower than normal.
Just six Forties cargoes of 600,000 barrels each are listed in February’s export schedule, down from 20 originally planned in January, trade sources said on Wednesday.
The first cargo in February’s programme loads on Feb. 19, one of the sources said. The February schedule is short because of the need to load shipments delayed by the pipeline shutdown, this source added.
Ineos, a privately-owned chemicals company based in Switzerland, bought the pipeline system from BP (BP.L) in late October.
Reporting by Alex Lawler; Writing by Dmitry Zhdannikov; Editing by Louise Heavens and Mark Potter