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UPDATE 1-INEOS Energy to sell its Norwegian oil and gas business to PGNiG for $615 million

LONDON, March 25 (Reuters) - INEOS Energy said on Thursday it has agreed to sell its Norwegian oil and gas business to Poland’s PGNiG Upstream Norway AS for $615 million.

The deal includes all of INEOS’ oil and gas interests in production, licenses, fields, facilities and pipelines.

INEOS Energy was formed late last year, incorporating the group’s existing oil and gas assets, and is chaired by former BP finance chief Brian Gilvary.

“The deal allows us to monetise a non-operated, predominantly gas portfolio at an attractive price compared to our hold value,” Gilvary said in a statement.

The purchase of INEOS E&P Norge AS, with its estimated 117 million barrels of oil equivalent, would bring PGNiG Upstream Norway’s output to about 1.5 billion cubic metres (bcm) annually over the next five years, PGNiG said in a separate statement.

PGNiG expects its annual gas production in Norway to reach 4 bcm in 2027.

“Acquisition of the INEOS E&P Norge AS assets means a sharp increase in our gas output in Norway, and will ensure considerable gas volumes for the Baltic Pipe,” PGNiG CEO Pawel Majewski said.

The Polish company sees supplies from Norway as an alternative to its gas purchases from Russia beyond 2022.

The Baltic Pipe gas pipeline project will connect Poland with Norwegian gas fields via the Baltic Sea and Denmark and is due to begin operations in October 2022 and have an annual capacity of around 10 bcm. (Reporting by Susanna Twidale, additional reporting by Karol Badohal; Editing by Susan Fenton)

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