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BP sells 'good old Forties' North Sea oil pipeline to Ineos

There aren’t too many pieces of infrastructure that have television advertisements made about them.

But then the Forties Pipeline System (FPS) is not any old piece of infrastructure.

The system, which once featured in a BP television advertisement with the tagline 'good old Forties', carries the equivalent of 40% of UK North Sea oil production to the mainland every day - some 445,000 barrels - and nearly a third of its gas.

From today, though, FPS is no longer owned by BP. It has been bought by Ineos, the privately owned chemicals giant, for a maximum of $250m.

It is difficult to overemphasise how important FPS has been both to the UK and to BP.

The Forties oilfield, the largest in the North Sea and lying 110 miles to the east of Aberdeen, was discovered in October 1970 by BP.

The discovery, in the words of former BP chief executive, Lord Browne, "started the North Sea in earnest" and signalled that the UK could be a major oil producer.

It took almost another five years for the oil to reach the mainland. It was a hugely expensive and risky project in inhospitable and storm-swept territory.

The 235-mile pipeline, transporting oil extracted from thousands of feet beneath the seabed, carries the oil 105 miles to the Cruden Bay terminal, near Peterhead, and then a further 129 miles to Kinneil processing plant next to the refinery and petrochemicals complex at Grangemouth.

The first oil began flowing in September 1975, although FPS itself was only officially inaugurated by the Queen, accompanied by BP's chairman, Sir Eric Drake and the Prime Minister, Harold Wilson, on 4 November that year.

By 1990, the original pipeline to shore had become corroded and needed replacing with a much larger pipeline system to service other parts of the North Sea.

Today's sale marks the end of that original, thrilling, adventure for BP.

The company sold the Forties oilfield itself to Texas-based Apache Corporation (NYSE: APA - news) as long ago as 2003 and offloaded Grangemouth and its other chemical assets to Ineos in 2005.

Its interests in the North Sea now lie mainly to the west of the Shetland Islands, while the North Sea itself remains only a very small part of what BP does, although the experience it gained in Forties helped make the company a global force in deep-water exploration and production.

Ineos, with its ownership of Grangemouth, is a logical buyer of FPS. A fifth of the oil flowing through the pipeline is used at Grangemouth and having it and the complex in the hands of one owner makes sense.

As Jim Ratcliffe, the owner, chairman and chief executive of Ineos, points out, FPS was originally designed by BP to work together to feed the Grangemouth refinery and petrochemical facilities.

The unions see it differently. They fought a high-profile battle with Mr Ratcliffe over employment conditions in 2013 that almost led to Grangemouth's closure.

The unions worry that, due to the high cost of North Sea oil production, Mr Ratcliffe could render uneconomic some of the 85 fields that use FPS by raising the tariffs paid by oil producers to access the pipeline.

The original discovery of the Forties oilfield, and the pipeline that bought its black gold to shore, paved the way for 25 glorious years, between 1980 and 2005, in which the UK was self-sufficient in energy.

Those days are gone, but there are plenty of companies still exploring in the North Sea, including BP. And FPS will continue to be part of that story for many years.