BP sells stake in CATS pipeline for $486 million

LONDON -- BP has agreed to sell its equity in the Central Area Transmission System (CATS) business in the UK North Sea to Antin Infrastructure Partners for $486 million.

BP is currently the operator of CATS with a 36.22% stake, and Antin—an independent European infrastructure manager—already owns a majority interest (62.78%) in the business, following a deal with BG last year. The other partners are ConocoPhillips, with a 0.66% interest, and Eni, with the remaining 0.34%.

“The North Sea is an important region for BP. Our strategy here is to focus our resources and investment to create an efficient, sustainable and competitive business, which will contribute to UK energy security for many years to come. Key elements of this are the completion of our major projects in the central North Sea and Shetland area, and continued management of our portfolio,” Trevor Garlick, regional president, BP North Sea, said.

“CATS has been a great business for BP but, aligned to the recommendations of the Wood Review, we believe securing this new owner will ensure a better long-term future for this key piece of North Sea infrastructure,” Garlick added.

The sale of CATS will be as a fully operational business, with staff expected to transfer to the new employer with contractual terms and conditions protected under UK TUPE regulations.

Subject to the receipt of regulatory and other third party approvals, BP aims to complete the sale and transfer of operatorship before the end of 2015.

The agreement comprises a payment on completion of $453 million and a deferred amount of $33 million, subject to certain post-closing adjustments.

The sale does not impact BP’s rights to capacity in CATS.

Construction of the CATS pipeline and associated infrastructure commenced in 1991, with first throughput in 1993.

CATS is comprised of a riser platform located adjacent to the Everest platform in Block 22/10; a 36-in. diameter, 404-km long pipeline, from the riser platform to the gas terminal; and a gas terminal at Seal Sands, Teesside. The terminal occupies a 70-acre site and has a processing capacity of 1,200 MMcfgd.