HC Deb 26 January 1981 vol 997 cc622-3
2. Mr. Eggar

asked the Secretary of State for Energy what matters remain to be resolved before the interim pipeline company, which will be responsible for the North Sea gas-gathering pipeline, can be formed.

21. Mr. Viggers

asked the Secretary of State for Energy if he will make a statement on the latest developments in the plans to construct a gas-gathering pipeline in the North Sea.

The Minister of State, Department of Energy (Mr. Hamish Gray)

The gas-gathering organising group is conducting discussions with gas producers and with potential customers for natural gas liquids, to determine the basis on which they would participate in the interim company, and with banks on the provision of interim finance. The organising group is pursuing these matters with a view to agreement on the structure and financing of an interim company by the end of March. Meanwhile, work continues on the offshore and onshore design of the project and its associated facilities.

Mr. Eggar

I am grateful for my hon. Friend's full reply. However, do the Government remain fully committed to the idea of introducing private equity capital from sources other than the oil companies and BGC?

Mr. Gray

At the moment, the finances are being arranged by the Bank of Scotland together with lead banks for the interim company. In due course, when the private utility is formed, it is intended to encourage private capital into it.

Mr. Douglas

Will the Minister clarify the role of BNOC in this organisation? Will he also confirm the statement he made during the debate on the Christmas Adjournment, that allowance could still be made for some of the NGLs to come down the line to Moss Morran and Braefoot Bay?

Mr. Gray

I made made it clear to the hon. Gentleman during the Adjournment debate that the basis on which the natural gas liquids would be dispersed was a commercial matter, that the Government had outlined the line they favoured but that it was now up to the commercial interests to conduct their own negotiations. I also made it clear to the hon. Gentleman that the BNOC and the British Gas Corporation would adopt the role of wholesalers in this matter, and on the purchase of gas liquids for the gas-gathering line.

Mr. Skeet

Since BNOC will be in control of at least 60 per cent. of the total ethane which comes from the North Sea, will BNOC organise the price or will it be the market?

Mr. Gray

The price will be largely determined by commercial negotiation. BNOC and the BGC, as I said, will act as wholesalers in this capacity.

Mr. Rowlands

What now are the chances of the Norwegians participating in any gas-gathering pipeline scheme and what initiative will the Government take to get them involved, since that would be of considerable mutual benefit?

Mr. Gray

We have made it clear up to now that the future of the gas-gathering line is not entirely dependent on our being able to purchase gas from the Norwegian sector of Statfjord and there is no question but that the gas-gathering system will go ahead whether or not we can purchase it. Nevertheless, we believe that the offer by the British Gas Corporation is the best package available to the Norwegians. If the decision is taken entirely on economic grounds, we are confident that the BGC proposals must still be very much in the reckoning.