A crucial North Sea pipeline network is facing possible closure a decade earlier than planned because of the UK Government’s North Sea tax raid.
The Forties Pipeline System - which connects more than 80 offshore gas and oil fields to the UK mainland - may shut down as early as 2030 if plans to extend the windfall tax suffocates investment.
Ineos bought the pipelines from BP in 2017 and committed to investing £500million to ensure it could run until the 2040s.
However, the Telegraph reports that UK Government’s plans to curtail North Sea capital and investment allowances means the system could face decommissioning instead.
Andrew Gardner, the chief executive of Ineos Forties Pipeline System, told the newspaper: “Back in 2017, we told our customers and workforce we’d operate [until] 2040 or beyond, because the amounts of hydrocarbons still left in the ground meant the oil and gas would keep flowing.
“But if Labour’s tax policy stops our customers offsetting their drilling and other investment costs against tax, then volumes will shrink – and we’re looking at 2030-35 as a more likely end date.”
Mr Gardner’s warning comes after Ineos - owned by Sir Jim Ratcliffe - recently confirmed plans to close Grangemouth refinery in Scotland in early 2025 with the loss of hundreds of jobs.
Gary Smith, general secretary of the powerful GMB Union, which represents many offshore workers, said: “Successive governments have taken a hostile position and a fundamentally dishonest position on the realities of oil and gas. We are going to need oil and gas for decades to come.
“What is totally counterproductive from a Labour perspective is taxing the industry out of business and putting bans on new exploration. You’re going to create a cliff-edge for the industry which will have devastating implications.”