PETROCHEMICALS giant Ineos is continuing to show its support for the recovering North Sea oil industry after announcing a £500 million investment in the pipeline network that delivers 40 per cent of the oil and gas used in the UK.

The firm, which is led by founder and chief executive Sir Jim Ratcliffe, who is the UK’s richest man, said it is making the investment in the Forties Pipeline System to prolong its life by at least 20 years.

It is part of a £1 billion investment from the privately owned company that will also see £350m ploughed into a new energy plant at Grangemouth and £150m into a new plant in Hull.

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Andrew Gardner, chief executive of Ineos FPS, said: “North Sea oil and gas producers are telling us that they want to be in the North Sea well into the 2040s so we are making this commitment to be there with them.

“Following acquisition of FPS in 2017 we are now embarking on a period of investment that will guarantee that the system can support them for decades to come.”

The overhaul will see Ineos modernise the 235 mile pipeline, which was opened in 1975 and can transport up to 600,000 barrels of oil to UK refineries every day.

It comes after Ineos acquired the network as well as a number of associated pipelines from BP in a $250m deal that closed at the end of 2017.

The pipeline, which brings oil onshore near Peterhead and transports it to the Grangemouth Refinery, had to be shut down for several weeks soon after to allow a hairline crack to be repaired. As part of that several households in Netherley near Stonehaven had to be evacuated.

Mike Tholen of trade association Oil & Gas UK upstream welcomed the new investment, saying it was a “vote of confidence in the future potential of the UK North Sea”.

“The rejuvenation of this critical infrastructure, embedded at the heart of industry for nearly 40 years, strengthens our aim to add another generation of productive life to the basin outlined in Vision 2035,” he said.

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“The modernisation programme will provide operators with a greater degree of certainty when making investment decisions about the future development plans for their assets.”

It comes less than two years after the business paid $1bn to acquire the North Sea oil and gas portfolio owned by Denmark’s Dong Energy.

That acquisition gave Ineos stakes in giant fields off Shetland, Norway and Denmark and resulted in a dramatic increase in the scale of its North Sea activities.

At the Grangemouth Refinery, which has been owned by Ineos since 2005, the £350m investment will be used to develop a steam and power plant that will power the company’s petrochemical manufacturing facilities there.

Ineos paid £54m to acquire the existing power plant from Fortum in 2014. The new plant is expected to be more energy efficient than the existing gas-fired combined heat and power one, which was commissioned in 2001 and sells excess energy into the National Grid.

Last year the business announced that it was investing £60m to build a tenth furnace at its Grangemouth ethylene plant.

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Ineos O&P chief executive Tobias Hannemann said the latest investment forms part of the company’s “wider plans to secure a bright future for manufacturing at Grangemouth”.

The Hull investment, meanwhile, will see the company create a facility for the production of vinyl acetate monomer, a key component in products including toughened glass, paints band adhesives that is currently not produced in the UK.

Sir Jim said the £1bn investment package showed that “at an uncertain moment for the country” Ineos “has confidence in its businesses and is committed to continue investing in manufacturing and high-skilled jobs in the UK”.