North Sea Gas Gathering (Hansard, 6 July 1981)

§ 9. Mr. Douglas
asked the Secretary of State for Energy if he will report on developments in establishing the North Sea gas-gathering system in the light of discussions with his Norwegian counterparts.

§ 17. Mr. Viggers
asked the Secretary of State for Energy if he will make a statement on current developments in planning the gas-gathering pipeline system.

§ Mr. Gray
Despite a highly competitive bid by British Gas, the Norwegian Storting has decided that gas from the Norwegian part of Statfjord and from other Norwegian fields should be transported via Norway to the Continent.
The United Kingdom gas-gathering line is highly economic on the basis of United Kingdom gas alone. The organising group is now considering the responses, that it has received from the individual companies.

§ Mr. Douglas
Does the Minister accept that one reason why the Storting took that decision was to enhance the petrochemical industry in Norway? In view of the recent press discussions about the possible dangers to the viability of the project for Shell and Esso at Moss Morran and Braefoot Bay, will the Minister give his view on the long-term viability of downstream petrochemical efforts in Britain? How will we finance our gas-gathering system?

§ Mr. Gray
The hon. Gentleman has asked a number of questions. The furtherance of the petrochemical industry in Norway was only one of a number of issues considered by the Norwegian Government. I venture to suggest that a political decision may have had a bearing on the final decision. The hon. Gentleman will appreciate that during the negotiations on a project such as Moss Morran the Department of Energy is constantly in touch with all the companies concerned. I can say no more than that at this time. The proposals put forward by companies for the financing of our gas-gathering system are currently under consideration by the organising committee.

§ Mr. Viggers
Does my hon. Friend agree that that vital project—the largest industrial project ever planned in Britain—will have the greater confidence of the participants if they can see that the ultimate purchaser of the gas will not be restricted to the monopoly of the British Gas Corporation and that market forces can operate in the supply of gas from that pipeline?

§ Mr. Gray
I confirm that the gas-gathering system has the highest priority. The Government's intention is that there should be maximum participation by the private sector. My hon. Friend will appreciate that it is a little difficult to hasten the measures when the amounts involved are of such magnitude.

§ Mr. Gordon Wilson
When does the Minister hope to reach a decision on this matter? Is he aware that the passage of time does not help the viability of the project? What impact will the reluctance of Esso to go ahead with Moss Morran have on the pipeline project?

§ Mr. Gray
We hope to reach a conclusion on the final financing of the pipeline during the summer months. I did not quite catch what the hon. Gentleman said about Moss Morran.

§ Mr. Gordon Wilson
What impact will Esso's reluctance to go ahead with Moss Morran have on the pipeline project?

§ Mr. Gray
The two are not connected. Esso has always made it clear that it wants supplementary supplies from the gas-gathering system but that the main supply will come from the flag line. That should not directly affect the negotiations at their present stage.

§ Mr. Rowlands
Has not another deadline been passed? Was not a statement due on 1 July about the financing of the pipeline? Is not the major handicap and obstacle not that mentioned by the hon. Member for Gosport (Mr. Viggers) but the fact that the Government are not willing to allow British Gas to go ahead with the project and give a guarantee or to give a guarantee themselves for the financing of the pipeline?

§ Mr. Gray
The potential of the project is such that capital can be raised in due course from private sources. The hon. Gentleman was not quite correct about the statement. The date that he mentioned—1 July—was the closing date for companies to submit their proposals to the organising group. They are presently being considered by that group.

§ Mr. Eggar
Will my hon. Friend confirm that it remains the Government's intention that the gas-gathering pipeline should be owned by a private sector utility? Will he assure us that the British Gas Corporation's monopoly right of purchase of North Sea gas will be removed in due course?

§ Mr. Gray
As I said earlier, it is the Government's intention that the major share of financing ultimately should be in the hands of the private sector. I cannot give a positive commitment on my hon. Friend's second point.