New infrastructure players to help UK North Sea in twilight years

Tue Jul 1, 2014 7:45am EDT
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* Pipelines, processing plants, terminals sought

* Pension funds interested in non-operating stakes

* Oil majors need to unbundle assets for quick sale

By Claire Milhench

LONDON, July 1 (Reuters) - The ageing oil and gas network of the UK North Sea is seeing a welcome rise in interest from infrastructure specialists and pension funds, giving oil majors a chance to offload unwanted assets and ultimately improve recovery from mature fields.

Britain's North Sea infrastructure has developed in an ad hoc fashion over the years, and still tends to be owned and operated by the original producers.

Now, with their own output on the decline, oil and gas majors are unwillingly turning into service providers for smaller producers who need access to these pipelines and platforms to get their output to shore.

But oil majors want to reduce their stakes in these non-core assets to free up capital for use elsewhere. This provides an opportunity for independent midstream owner-operators, pension funds and infrastructure funds to step in.

To date, there have been just a handful of transactions in the UK midstream sector - most recently June's sale by BG Group of its majority stake in the CATS gas pipeline to France's Antin Infrastructure Partners.   Continued...