The November ICE Brent futures contract price declined following a Genscape notice released on September 7 regarding the recent restart of BP’s 1.15 million bpd Forties Pipeline System. The pipeline’s outage contributed to a price increase on September 6.
The system was shut for about two days, while all the processing trains at the Kinneil fractionation terminal were down from about 9:01 p.m. (GMT) on September 4 to 11:26 p.m. (GMT) on September 6, according to Genscape. Barrels on the Forties pipeline system flow to the fractionation terminal were stabilized for consumption. Genscape detected that Forties pipeline flow can be affected by issues at the terminal’s gas fractionation trains.
By 3:40 p.m. (GMT) on September 7, the ICE Brent price decreased by $0.73/bbl to $46.97/bbl, which followed Genscape noticing that the Kinneil Train 1 and 2 fractionation units were restarted and Forties pipeline flow had resumed at 12:21 p.m. (GMT). Flow rose to about 586,000 bpd on September 9 and remained above 450,000 bpd on September 14.
Prior to the restart alert, Brent increased about 1.5 percent or $0.72/bbl to $47.89/bbl at 4:55 a.m. (GMT) on September 6 from when Genscape alerted subscribers that all processing trains at the Kinneil fractionation terminal were shut on September 4. News of the pipeline shutdown, along with a weaker U.S. Dollar helped par losses from changing OPEC production freeze rhetoric. “The U.S. Dollar Index declined by a tad over 1 percent September 6 providing some positive support for the oil complex on a day when the Saudi Energy Minister said there was no need to freeze crude oil output for now, even though they signed a pact with Russia the day before to cooperate in world oil markets," said Dominick Chirichella of Energy Management Institute on September 6.
Additionally, a one-month maintenance is scheduled for the Buzzard oilfield beginning September 17, reducing Forties output. According to Reuters, several cargos were delayed or dropped due to lower than expected supply. The Buzzard oilfield is the main constituent to Forties pipeline flow.
The Forties Pipeline System has an oil processing capacity of 1.15 million bpd and flows from the Forties Unity platform to the Kinneil crude stabilization plant. From there, stabilized oil is delivered either directly to ship at Hound Point, to tank at Dalmeny, or to the refinery at Grangemouth.
Access Genscape's Forties Supply Chain Service to receive timely insightful alerts. They not only highlight variations in the real-time pipeline flow, but also underline events that affect the key operating units at Kinneil and Grangemouth. The daily snapshot of oil storage, pipeline, shipment, and refinery activity provides a valuable overview of Forties exiting the system. Genscape has an extensive in-the-field network of high-tech, proprietary monitors that provide real-time tracking and measurements of production levels, cargo shipments, outages, and other key factors. To learn more, or request a free trial of Genscape's Forties Supply Chain Service, please click here.