Total has agreed to sell all of its interests in the FUKA and SIRGE gas pipelines and the St. Fergus Gas Terminal in a US$905 million (£585 million) deal.
Subject to regulatory approvals, the assets will be bought by North Sea Midstream Partners, which owns and operates the Teesside Gas Processing Plant (TGPP) in northeast England.
The move will make it the second recent sale of significant North Sea pipeline infrastructure to an independent pipeline operating company.
BG Group completed the $961 million sale of the Central Area Transmission System (CATS) pipeline earlier this year to Antim Infrastructure Partners, with Wood Group then appointed to act as duty holder. CATS delivers gas to the TGPP, which also processes gas from the Breagh field, which came onstream in 2014.
Total's move comes as it looks to sell off non-core assets as part of "portfolio management." Patrick de La Chevardière, CFO at Total, said: “Transferring ownership to an entity specializing in midstream UK assets creates value for us and ensures a long and bright future for the facilities."
The Frigg UK Pipeline (FUKA) is a 362km, 32in gas pipeline that was originally constructed in 1977 to connect the Frigg field on the UK - Norway median line to the St. Fergus Gas Terminal in Scotland. The Frigg field is now decommissioned but the FUKA pipeline is still operational, delivering gas from some 20 fields in the northern North Sea to the terminal at St Fergus. Total holds a 100% operated interest in the FUKA pipeline.
The St. Fergus Gas Terminal is a three-train processing plant with a capacity of 2.6 Bcf/d, currently serving over 20 fields. Total holds a 100% operated interest in the terminal.
The Shetland Island Regional Gas Export System (SIRGE) is a 234km, 30in gas pipeline with a capacity of 665 MMscf/d connecting the Shetland Gas Plant to the FUKA pipeline. Total holds a 67% operated interest in the SIRGE pipeline alongside Dong E&P (UK) Ltd. (18.3%), Chevron North Sea Ltd. (7.2%) and OMV (UK) Ltd. (7.5%).
Following the completion of the sale, North Sea Midstream Partners will have an agreement with px Group for the operation and maintenance of the assets.
Total, which has been present in the UK since 1962, retains its upstream assets which had equity production of 89,000 boe/d in 2014, centered on two areas: the Alwyn/Dunbar area in the northern North Sea and the Elgin/Franklin area in the Central Graben, where the West Franklin Phase 2 project was brought on stream earlier this year.
When Laggan-Tormore project comes on stream West of Shetland, Total will have a third hub. Total says, by the end of 2015, it is expected to become the largest producing oil and gas company in the UK.
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