INEOS has agreed to acquire the Forties Pipeline System (FPS) along with associated pipelines and facilities from BP.
Under the agreement, INEOS will pay BP a consideration of up to $250m that includes a cash payment of $125m to be payable on completion of the deal.
The remaining $125m will be paid over seven years under an earn-out arrangement.
The 235-mile Forties pipeline system links 85 North Sea oil and gas assets to the UK mainland and the INEOS site located in Grangemouth in Scotland.
INEOS chairman and founder Jim Ratcliffe said: "The North Sea continues to present new opportunities for INEOS.
"The Forties Pipeline System is a UK strategic asset and was originally designed to work together to feed the Grangemouth refinery and petrochemical facilities.
"We have a strong track record of acquiring non-core assets and improving their efficiency and reliability, securing long-term employment and investment.
"I am delighted that we can now bring this integrated system back under single ownership in INEOS."
Following completion of the deal, ownership and operation of FPS, the Kinneil terminal and gas processing plant, the Dalmeny terminal, sites at Aberdeen, the Forties Unity Platform and associated infrastructure will transfer to INEOS.
These assets will transfer as fully operational units, at which point INEOS will be responsible for a strategic UK asset that delivers almost 40% of the UK’s North Sea oil and gas.
BP group chief executive Bob Dudley said: “BP is returning to growth in the North Sea as we bring important new projects, including the Quad 204 redevelopment and Clair Ridge, into production and pursue further opportunities beyond these.
“While the Forties pipeline had great significance in BP’s history, our business here is now centred around our major interests west of Shetland and in the Central North Sea.
“The pipeline has long been an important feedstock supplier to INEOS at Grangemouth.
“We believe that through also owning FPS, INEOS will be able produce greater efficiencies and help secure a competitive long-term future for this important piece of UK oil and gas infrastructure.”
It is expected that around 300 people that operate and support the FPS business at Kinneil, Grangemouth, Dalmeny and offshore will become part of the INEOS Upstream business.
The acquiring entity will be INEOS FPS Limited, which forms part of INEOS Limited.
Subject to regulatory approvals and other closing conditions, the acquisition is expected to complete by the third quarter of this year.
Image: Forties Unity platform. Photo: courtesy of INEOS.