UK’s North Sea Midstream Partners (NSMP) has agreed to acquire interests in midstream transportation assets including gas pipelines and terminal from France-based Total for £585m ($905m).
NSMP will purchase Total’s 67% operated stake in the Shetland Island Regional Gas Export System (SIRGE) gas pipeline, which is also owned by Dong E&P (UK) , Chevron North Sea and OMV (UK) with 18.3%, 7.2% and 7.5% stakes.
North Sea Midstream Partners will also acquire 100% interests in the Frigg UK pipeline (FUKA) and St. Fergus gas terminal, as part of the deal.
North Sea Midstream Partners CEO Andy Heppel said: "We see midstream infrastructure as crucial to the longevity of the North Sea and firmly believe that the independent ownership of such infrastructure can help maximize the ultimate economic recovery of the UKCS’s oil and gas reserves, consistent with the findings of the Wood Review."
Commissioned in 1977, the 362km FUKA gas pipeline connects the Frigg Field on the UK – Norway median line to the three-train St Fergus gas terminal, which has processing capacity of 2,648 million ft³ of gas per day (Mmscf/d), in Scotland.
Although the Frigg field is decommissioned, the 32in pipeline still continues gas supply to the terminal from around 20 fields in the North Sea.
With a capacity of 665Mmscf/d, the 234km SIRGE gas pipeline connects the Shetland gas plant to the FUKA pipeline.
Total chief financial officer Patrick de La Chevardière said: "The sale of these midstream transportation assets is another example of Total’s strategy of active portfolio management and the strong potential to unlock value from a range of infrastructure assets."
Upon completion of transaction, which is subject to regulatory and other customary approvals, px Group will operate and maintain the assets as part of a long-term deal with North Sea Midstream Partners.
The sale comes in line with the Total’s portfolio management strategy to divest assets worth $5bn this year.
Total expects to become the largest oil and gas production company in the UK by the end of the year.
Image: Total plans to divest assets worth $5bn this year. Photo: courtesy of supakitmod / FreeDigitalPhotos.net.