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Markets & Forecasts

Oil-indexed gas pricing faces North Sea shake-up

Outages on the Forties Pipeline System can have a big impact on gas and LNG pricing because of its role in transporting a crude used in the Brent benchmark, pricing of which is also facing significant changes Outages on the Forties Pipeline System can have a big impact on gas and LNG pricing because of its role in transporting a crude used in the Brent benchmark, pricing of which is also facing significant changes.
By Peter Stewart 19 July 2019 World / Global Markets 0 34411
Problems on the Forties Pipeline System could potentially have a much bigger indirect impact on gas and LNG pricing. (INEOS)

Last week’s outage on the Forties Pipeline System (FPS) should ring alarm bells for anyone with gas or LNG contracts linked to the Brent benchmark.

Oil flows through the 36-inch diameter FPS were reduced to 190,00 barrels per day compared with an average of 400,000 b/d to allow repairs to be made to one of three processing units at the Kinneil oil and gas facility near Grangemouth on the northeastern coast of Scotland. 

Although the FPS transports only crude oil, its closure can have a knock-on impact...