APACHE Corporation is reducing its exposure to the North Sea by selling its interest in a giant pipeline and processing system to UK pension funds in a deal that looks likely to be worth hundreds of millions of pounds.

The American oil and gas giant has agreed to sell its interests in the Scottish Area Gas Evacuation pipeline and an associated link to funds advised by London-based Ancala Partners.

The SAGE pipeline carries the output from nine North Sea fields around 200 miles for processing at a terminal at St Fergus North of Aberdeen.

The value of the transaction has not been disclosed. It has been agreed within months of BP and Total agreeing North Sea pipeline sales worth £910 million in total.

Oil and gas giants have been reducing investment in the North Sea amid the plunge in oil and gas prices since 2014, to free up cash to invest elsewhere.

Earlier this month Apache noted it planned to sell off non core assets to raise funding to invest in developing assets after making a bumper shale find in America’s Delaware basin.

The company did not comment on the deal with Ancala.

However, its decision to sell off pipeline interests in the North Sea rather than oil and gas fields may be greeted with some relief in the industry.

In October 2014 there were reports Apache was considering pulling out of the North Sea to focus on developing its US shale interests.

The company has retained interests in a range of North Sea assets including the giant Forties and Beryl complexes.

In its third quarter results announcement this month Apache noted the long-term exploration potential in the Beryl area.

Apache likely expects to achieve cost savings by offloading the pipelines to buyers who would hope to be able to run them more efficiently.

Private equity specialists think the oil and gas infrastructure business could offer rich pickings for investors.

Pipelines can generate steady returns over long periods and there is scope to consolidate the fragmented ownership structures that are common in the sector.

Spence Clunie, managing partner of Ancala Partners, said: “SAGE is a high quality business with a skilled and experienced workforce that fits well with the investment characteristics of Ancala Partners’ mandate.”

The Ancala Midstream Acquisitions vehicle formed by the private equity firm has agreed to buy Apache’s 30.28 percent share of SAGE. It will also buy Apache’s 60.56 per cent interest in the pipeline that connects the Beryl field to the SAGE line.

Aberdeen-based Wood Group will manage the pipelines for the company. The 110 people working for Apache on the terminal will transfer to Wood Group. There will be no job losses as a result of the deal.

Ancala Midstream’s management team will be led by Jim Halliday, an oil and gas sector veteran who has held senior posts in BP’s North Sea operations.

He said the firm aims to maximise throughput for all producers, to extend the life of the system and to connect new fields.

The pipelines handle output from fields operated by a range of firms.

Last year Total and BP agreed deals to sell interests in significant North Sea pipeline systems to private equity investors for £585m and £324m respectively.