Following the discovery of a "small hairline crack" in The Forties Pipeline System – one of the most important oil conduits in the world – its operator Ineos has decided a total controlled shutdown is the safest option. This has sent the spread between WTI and Brent soaring…
A “small hairline crack” was discovered during a routine inspection last week by Ineos contractors, just south of Aberdeen in Scotland. The pipeline’s pressure was reduced for a full assessment but during that time the crack extended.
As Bloomberg reports, Brent futures rose as much as $1.18 to $64.71 a barrel in London – the highest since June 2015…
“Despite reducing the pressure the crack has extended, and as a consequence the Incident Management Team has now decided that a controlled shutdown of the pipeline is the safest way to proceed,” Ineos said in a statement.
“This will allow for a suitable repair method to be worked up.”
The pipeline system feeds crude to the Hound Point export terminal near Edinburgh in Scotland.
At over 400,000 barrels a day, the supplies that flow through the link are the single largest constituent part of the Dated Brent grade that helps to settle more than half the world’s physical oil prices.
via http://ift.tt/2jtfIHP Tyler Durden