Total Seeks Sale of UK Pipe Stake: Report
France's Total has held negotiations with potential buyers for its 25.7% interest in the Shell-operated Shearwater Elgin Area Line (Seal) gas pipeline in the UK North Sea, Reuters reported on July 15 citing sources. The stake could fetch up to $200mn, the sources said.
Companies such as Antin and NorthSea Midstream Partners have taken over from producers the ownership and operation of offshore UK infrastructure. The new owner's income is guaranteed under long term ship or pay terms with the former capacity-owners.
Commissioned in 2000, Seal carries gas from Shell's Shearwater and Total's Elgin Franklin platforms to the Bacton gas sub-terminal on the Norfolk coast. From there it can be exported through the Interconnector to Belgium, or pumped into the UK grid, depending on prices.
The oil majors are continuing with their withdrawal from the North Sea, as they look to raise cash to weather the downturn and fund higher-margin projects. But the value of these assets has fallen considerably since prices collapsed.
BP has agreed to sell its 27.5% interest in the Shearwater field, together with interests in the Andrew area fields, to Premier Oil, with the pair recently agreeing to cut the sales price considerably. Meanwhile ExxonMobil, having sold its Norwegian business to Var Energi last year, is now reported to be courting buyers for its shares in almost 40 UK fields.
Total is working to close another deal to sell non-core UK fields to Norway-based private equity investor HitecVision, which is Eni's partner in Norwegian producer Var Energi. The sale of the Seal stake is line with the company's strategy. In August last year it sold a 30% interest in a French fuel pipeline system to a local operator, with CFO Jean-Pierre Sbraire saying at the time that "rather than own infrastructure assets, the group's aim is to hold contracts to use infrastructure when needed to manage its industrial assets."