LONDON – One of Europe’s most important oil pipeline systems will be shut down for a matter of weeks, said owner Ineos, sending a jolt into international oil prices as traders contemplated the loss of some North Sea oil supplies, according to Dow Jones.
The Forties Pipeline System carries about 445,000 barrels of crude a day through the North Sea, some of it used to create the benchmark crude price known as Brent.
Ineos, the British refining and chemicals company, said on Monday it was shutting down the Forties after the worsening of an onshore hairline fracture south of Aberdeen, Scotland.
In Tues. morning trading in Europe, Brent crude was 1.4 percent higher at $65.57 a barrel, after reaching its highest level since June 2015 on Mon.
The company said only that repairs could take several weeks. A small amount of oil has seeped from the pipeline, Ineos said, but the leak has been contained.
The 235-mile pipeline system connects 85 North Sea oil and gas assets to the UK mainland, amounting to about 40 percent of the UK’s North Sea oil and gas production.
Ineos bought the Forties system from BP PLC in October.
The shutdown of the Forties could hurt energy companies that transport oil through the system and drive up processing costs for refineries who must compete to find replacement crude as input for their petroleum products, said the energy consultancy Wood Mackenzie.
A BP spokesman said the company was temporarily shutting down production in three hubs at the request of Ineos.
Royal Dutch Shell PLC uses the Forties system to transport oil from some of its assets in the North Sea. “We are aware and are assessing the situation,” said a spokesman for the British-Dutch company, according to the Dow Jones report.