French oil major Total has agreed to sell some of its gas pipeline assets in the UK’s North Sea to North Sea Midstream Partners, an affiliate of U.S.-based private equity firm ArcLight Capital, for 585 million pounds ($907 million). The sale includes the Frigg UK (FUKA) and SIRGE gas pipelines and the St. Fergus gas terminal, Total said in a statement on Thursday.
Europe’s second-largest oil company, Total unveiled a plan earlier this year to cut investments and jobs, and accelerate its asset sale programme after oil prices more than halved in the past year. “Infrastructure assets like these are not part of our core business,” Michael Borrell, head of continental Europe and Central Asia at Total’s exploration and production unit, said in a conference call with reporters.
But the sale should not be misinterpreted as a vote of no-confidence in the North Sea, he said. Total expects to become the largest oil and gas producer in the UK by the end of the year, it said in the statement. The start-up of its third hub in British waters, the Laggan-Tormore project in the Shetlands, is expected later this year.
($1 = 0.6452 pounds)