The Central Area Transmission System gas pipeline in the U.K. North Sea is expected to restart in September after work to repair damage, pipeline operator BP PLC (BP) said Monday. “Following a comprehensive engineering assessment of the inspection data, it has been determined that the pipeline has suffered damage and a permanent repair will be required before the pipeline is safe to start up,” the statement said. “A metal sleeve will be installed to strengthen and protect the affected area of pipeline. Design and fabrication of the sleeve is already underway and it is expected that the system will restart during September,” it added. The pipeline shutdown has been affecting a significant proportion of the U.K. North Sea’s oil and gas output. All gas production is shut in at the fields connected to the pipeline – Andrew, Everest and Lomond operated by BP; the Eastern Trough Area Project, or ETAP, operated by BP and Royal Dutch Shell PLC Jade and J-Block operated by ConocoPhillips Corp. and Armada operated by BG Group. These fields produced around 30 million cubic meters of gas a day in March 2007, according to data from the U.K. department of Business, Enterprise and Regulatory Reform. The price of gas for delivery at U.K. hub the national balance point for August and September rose Monday as the extended CATS outage and other field shutdowns for scheduled maintenance threatened to disrupt gas supply, said a U.K.-based gas trader at a European utility. The August gas contract rose 5% to 32 pence a therm and September was up 4% to 30p/therm at 1120 GMT compared with Friday’s close. Oil production at the above fields plus Chevron Corp.’s Erskine and ConocoPhillips’ Jade field are also affected. BG Group said last week that 80,000 barrels of oil equivalent a day have been shut in at Armada. ConocoPhillips said all oil production was shut in at Jade and J-Block. These fields produced around 40,000 barrels a day of oil in March, according to government data. Chevron said oil production was impacted at Erskine, which produced around 10,000 barrels of oil a day in March. BP and Shell are able to re-inject associated gas production at ETAP so can continue production. The companies haven’t commented on how oil production from these fields has been affected. The extended CATS outage was also expected to support the price of benchmark crude oil Brent. “There’s going to be a big backlog of production and that should buoy Brent,” said a U.K.-based oil trader. September Brent crude was down 0.4% to $75.97 a barrel at 1120 GMT from Friday’s close. The pipeline was damaged by a ship dragging anchor on June 27. An initial remote-operated vehicle inspection showed some damage to the pipeline’s concrete casing. Divers later removed part of that concrete casing to discover the damage to the pipeline itself. Summer is the time when most North Sea operators conduct routine maintenance on their offshore infrastructure. During this time most divers and dive boats are fully committed and a person in the diving industry said it is difficult to find crews at short notice. BP said the dive vessel that performed the inspection was only secured after wide-scale industry cooperation. CATS is a 36 inch diameter gas pipeline transporting gas from the central North Sea to terminals at Teesside in the northeast of England.

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