Brent pipeline shut after leak
LONDON--The Brent Pipeline System, which transports 100,000 bpd of the benchmark crude from North Sea fields to the export terminal at Sullom Voe, has been shut after an internal leak forced the closure of a key platform.
The outage represents as much as an eighth of all the crude that makes up BFOE--a blend of the four major North Sea crude-oil grades: Brent, Forties, Oseberg and Ekofisk.
A spokeswoman for TAQA Bratani, owned by Abu Dhabi National Energy Co., said that a gas release at the Cormorant Alpha platform had led to the closure of eight other platforms, with some 27 North Sea fields affected.
The spokeswoman said that the pump station for the Brent system is on the Cormorant Alpha platform, and that without the pump station the network can't operate. An earlier statement said that the system was being shutdown "as a precaution."
TAQA said the gas is contained within the platform leg and none has been released into the environment.
The pipeline system only transports the Brent portion of the BFOE grade, with other systems carrying the Forties, Oseberg and Ekofisk components of the blend. This month's total output of the four grades that make up the BFOE benchmark was estimated to be 832,000 barrels a day, according to Dow Jones Newswires data.
Shortly after the news of the pipeline's closure the price of Brent crude for February delivery fell sharply, from $111.59 a barrel to $111.12 a barrel in late London trading. The movement can be explained by volatility ahead of the February contract expiration Wednesday, but a prolonged closure of the pipeline could push the price up by limiting supply.
The spokeswoman said TAQA couldn't yet say how long the pipeline would be closed.
TAQA has been expanding in the North Sea for a few years, making big purchases of assets from established players including BP PLC (BP), Exxon Mobil Corp. (XOM) and Royal Dutch Shell PLC (RDSA, RDSB)). The latter had operated the Brent pipeline system since the mid-1970s until TAQA took it over in July 2008.
The Cormorant Alpha platform, located 232 miles offshore Peterhead and 94 miles from Lerwick, has experienced problems before. In 1989 a nonfatal explosion sent shock waves through the industry still deeply affected by the Piper Alpha tragedy a year earlier in which 167 people died. In 1992, 11 workers died when a helicopter leaving Cormorant Alpha crashed into the North Sea.
As of the last helicopter flight at about 1830 GMT Tuesday, some 92 people will have been removed from the Cormorant Alpha from a total crew of 159. Three "specialist personnel" will traveled to the rig, a spokesman said.