Grangemouth refinery operator Ineos said it agreed to acquire the important Forties Pipeline System (FPS) and associated pipelines and facilities in the North Sea from BP for up to $250 million.

The 235 mile Forties pipeline system links 85 North Sea oil and gas assets to the UK mainland and the Ineos site in Grangemouth in central Scotland.

Ineos will pay BP up to $250 million, comprising a cash payment of $125 million on completion and an earn-out arrangement over seven years that could total $125 million.

On completion, 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,” said Ineos.

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.

Ineos chairman 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.”

BP group chief executive Bob Dudley commented: “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.”

Ineos said that 20% of the oil that passes down the pipeline feeds the Ineos refinery to provide 80% of Scotland’s fuel.

The acquisition and transfer of operatorship is targeted to complete in the third quarter of this year, subject to the receipt of regulatory and other third party approvals.