Total to sell gas pipelines in UK for £585m

Total, Europe's second- biggest oil company by market capitalisation, has agreed to sell gas pipelines and a terminal in the UK for £585 million (€798m) to North Sea Midstream Partners as part of a longstanding plan to shed non-core assets. The French company will sell its interests in networks known as FUKA and SIRGE as well as the St. Fergus Gas Terminal in Scotland, according to a statement.

Sale of the assets, which attracted significant interest, isn’t a sign Total is pulling out of the region amid a crash in oil prices, Michael Borrell, senior vice president for Europe and central Asia at Total EandP, said on a conference call.

Total expects to become the largest oil and gas producing company in the UK at the end of 2015 following the start up of the Laggan-Tormore natural gas field, which lies west of the Shetland Islands. “We continue to grow our production in the U.K.,” Borrell said. “Infrastructure assets like these are not part of the core business and we can transfer our operatorship and our equity ownership in them to somebody that specializes in this business.”

Total chief executive officer Patrick Pouyanne has said he will curb spending and quicken the pace of asset sales after the price of oil crashed. The company wants to raise $5 billion through disposals this year, and is targeting a total of $10 billion through 2017. "The sale of these midstream transportation assets is another example of Total's strategy of active portfolio management and strong potential to unlock value from a range of infrastructure assets," chief financial officer Patrick de La Chevardiere said in the statement.

Bloomberg