Major UK pipeline shutting down amid refinery strike

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By RAPHAEL G. SATTER

Associated Press Writer

LONDON (AP) -- Oil giant BP PLC on Sunday was closing a pipeline system responsible for delivering almost a third of Britain's North Sea oil production.

The closure of the Forties Pipeline System was prompted by a two-day strike that began Sunday morning at the Grangemouth oil refinery in central Scotland. Refinery owner Ineos has already stopped production at the facility, which provides electricity and steam to the pipeline.

The pipeline was supposed to be completely shut down by 1 a.m. EDT Sunday. A British energy industry group said the closure could cost $99 million a day.

Oil ecutive Malcolm Webb demanded the government intervene "to ensure that the country is not held to ransom in this manner," adding that the strike "is now affecting some 80 companies and their operations, which are in no way connected to or involved in this dispute."

Grangemouth is the major oil supplier to Scotland and parts of northern England, and those areas were expected to feel the greatest impact from the strike. The shutdown has also raised fears of gas shortages in those areas, which rely on the system for their fuel.

The government wants to avoid a repeat of scenes in 2000 when motorists were forced to line up at gas stations as truckers angry at heavily taxed fuel brought Britain to a standstill by blockading refineries. On Saturday, it urged drivers not to hoard fuel.

"There is plenty of petrol and diesel in Scotland to meet demand during this period of time," the government's business secretary, John Hutton, told the British Broadcasting Corp. "But of course there is going to be a challenge if people change the way that they consume fuel."

Pat Waters of the Automobile Association said he was not so sure.

"I think there will be some difficulties despite the assurances," he said, adding that rationing was a possibility.

Gas stations in and around Edinburgh were limiting gas purchases to 20 pounds -- equivalent to $40 -- per visit Saturday, and lines of cars formed beside some pumps. A number of stations ran out of gas and diesel by midmorning.

Some gas stations were charging 1.25 pounds -- $2.47 -- Saturday for a liter of unleaded, up from about 1.08 pounds -- $2.14 -- on Monday.

Scottish First Minister Alex Salmond said BP was releasing extra stocks to help meet demand, and that fuel arriving by boat from European ports would also help fill the gap.

Prime Minister Gordon Brown said the strike was unnecessary and called for new negotiations between Ineos and the workers' union, Unite. Talks to avert a strike broke down earlier this week.

Grangemouth's 1,200 workers planned the strike over pension issues, one of a series of labor disputes to hit Britain as the global economy weakens.

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Associated Press Writer Ben McConville in Edinburgh, Scotland contributed to this story.