UK Forties Pipe System Shut (Update: Ineos Says Restart Underway)
Update February 8 2018: Ineos said in the morning of February 8 that the start-up of the Forties Pipeline System, which it operates, is "now underway following the successful resolution of an issue yesterday (7 February) with a feed control valve." However fields upstream of the system are still understood to be shut in. The original February 7 story is appended below.
The unexpected closure of the Forties Pipeline System (FPS), operated by UK-based Ineos and which carries oil and gas, caused gas prices in northwest Europe to firm during the afternoon of February 7 on a resultant tightening of gas supply.
The short-term impact on UK NBP gas trading prices was not clear to NGW, but prices for day-ahead delivery at the Dutch TTF gas hub firmed some 50 eurocents between 2pm and 4pm Central Europe Time to peak at €18.75/MWh, before easing back some 10 eurocents. Prices for 2Q 2018 TTF gas also firmed 25 eurocents to reach €17/MWh during the same two-hour period, while March TTF was volatile.
No immediate statement was available from Ineos on either its website or by telephone, but one trader indicated to NGW that higher traded prices were due to the "Forties price impact". Reuters earlier reported that traders had received a note from Ineos about the outage, which it reported was due to a feed control valve connecting to the Kinneil gas plant being unexpectedly closed.
Operators with outlying UK North Sea fields connected to the FPS had only just resumed upstream production mid-January, following a three-week shutdown of FPS during December 2017.
The 235-mile Forties Pipeline links 85 North Sea oil and gas assets to the UK mainland. Ownership and operation of the system was transferred from BP to Ineos on October 31 2017.
Update 5.25pm UK time, February 7: Ineos confirmed to NGW that: "a feed control valve closed at its Kinneil facility at around 10.20am today (Wednesday, February 7). Automated safety systems operated as expected to safely close the main pipeline system. We have now identified the issue that caused this and are hoping to resolve it this evening. We then plan to start-up again overnight."
On gas markets, March UK NBP prices firmed by a penny over the past 24 hours to close at 50.9 pence per therm, whereas day-ahead NBP closed February 7 at the same price - but down from 51.175p/th on the previous February 6 close. TTF also lost some of the price gain recorded during the afternoon of February 7 in the final hour's trading, with day-ahead TTF closing €18.35/MWh, and TTF for March closing €18.15/MWh, and TTF for 2Q2018 at €16.80/MWh, so down 20 eurocents from this afternoon's peak.