As widely expected, Ineos has clinched a deal with BP to buy the Forties Pipeline System (FPS) that transport 575,000 bbl/d of oil from the UK’s first major offshore oil field –built by the oil and petrochemicals multinational and opened in 1975 – to the UK mainland. The 169-km (105-mile) system links 85 North Sea oil and gas assets; around 20% of the throughput goes to feed Ineos’ refinery at Grangemouth, Scotland.

Following the transaction, BP said its activities in the North Sea will focus on bringing new fields into production, redeveloping and renewing existing producing facilities and acquiring and exploring new interests. “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,” CEO Bob Dudley said.

Under the term of the deal expected to complete in the third quarter, INEOS FPS Limited, a newly created unit of the Swiss-headquartered olefins and polyolefins group’s holding structure, will pay BP up to $250 million for the assets package. This includes an initial cash payment of $125 million and a seven-year earn-out arrangement potentially worth another $125 million.

The acquisition foresees ownership and operation of FPS, the Kinneil terminal and gas processing plant adjacent to the Grangemouth refinery and chemical complex, as well as the Dalmeny terminal, sites at Aberdeen, Scotland, the Forties Unity Platform and associated infrastructure. About 300 staff supporting the operations will transfer to Ineos.

“The North Sea continues to present new opportunities for Ineos,” the group’s chairman, Jim Ratcliffe, said. “The pipeline system is a UK strategic asset and was originally designed to work together to feed the Grangemouth refinery and petrochemical facilities, he said.

In recent years, the Swiss-headquartered olefins and polyolefins group has made several strategic moves to establish a position for itself in the upstream arena. The agreement with BP further expands its upstream business following the 2015 acquisition of the Breagh and Clipper South gas fields in the Southern North Sea, which, by Ineos’ account, supply gas for heating around 10% of British homes.