British oil and gas pipeline set to close over strike
26/04/2008 16h45

LONDON (AFP) - A North Sea pipeline which supplies around 40 percent of Britain's oil and gas as well as international markets will shut down within hours because of a strike, operator BP said Saturday.

The Forties pipeline in Grangemouth, west of Edinburgh, Scotland, is being closed as a knock-on effect of industrial action by 1,200 workers at a neighbouring oil refinery in a row over pensions.

It is the first time in more than 70 years that a British refinery is being closed by a strike.

The pipeline cannot function without electricity and steam generated by the refinery, which has already closed ahead of the strike Sunday and Monday.

BP executives are currently holding meetings to decide when the pipeline should be shut down.

"They are meeting and they will decide at what time they have to shut it down in the course of the day," a spokesman for the oil giant told AFP.

"The strike begins at 6:00 am (0500 GMT Sunday) and one hopes the power and the steam will be going as long as possible."

A decision will be taken "sometime between now and 6:00 am tomorrow morning," he added.

Offshore oil industry body Oil and Gas UK has warned that closing the pipeline could cost 50 million pounds (63 million euros, 99 million dollars) a day in lost production.

"The potential effect of the industrial action at Grangemouth on UK oil and gas production is wholly disproportionate to the scale of the dispute itself," its chief executive Malcolm Webb said.

Some 70 oil fields feed into the pipeline, which pumps out around 700,000 barrels of oil a day. Around two-thirds is immediately exported.

North Sea oil platforms could be forced to shut down due to the action, the BP spokesman said, adding they would likely take a few days to get up and running again afterwards.

Oil prices Friday soared amid news of the situation -- in London, Brent North Sea crude for June rose two dollars to 116.34 a barrel after earlier crossing the key 117 dollar mark.

Some British motorists have already started stocking up on petrol because of the dispute, despite calls from the government not to panic-buy and official reassurances that there is enough in reserve to last through the strike.

Many petrol stations, particularly in Scotland, have started rationing the amount of fuel customers are allowed to buy.

The situation is worst in Scottish cities such as Edinburgh and Glasgow while some retailers have started hiking up their prices and rationing the amount of fuel customers can buy.

Prime Minister Gordon Brown has said there is no need for industrial action in the dispute and urged Grangemouth's owners and the Unite trade union, which is representing workers, to talk.

Business Secretary John Hutton told Sky News television there was "no justification" for the disruption.

"There are sufficient stocks of petrol and diesel to get out to motorists and other business users," he added.

"If people buy petrol and diesel in the way they would normally do it, there is no reason for there to be any substantial problems with fuel".

The dispute comes at an awkward time for Brown, ahead of London mayoral and local elections on May 1 in which opinion polls suggest his Labour Party could struggle.

Thousands of teachers in England and Wales went on strike over pay Thursday in their first nationwide industrial action in over 20 years, while he is also facing a revolt over tax reforms in a crunch vote taking place Monday.

Original article: AFP
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