Gas-gathering System (Hansard, 23 March 1981)

§ 1. Mr. Douglas
asked the Secretary of State for Energy if he will make a statement on the progress made in financing the gas-gathering system for the North Sea.

§ The Minister of State, Department of Energy (Mr. Hamish Gray)
The gas-gathering organising group has invited parties with an economic interest in the project to consider participation in the financing. The Bank of Scotland is discussing interim bank financing with a group of banks, and I understand that a report will be submitted soon to the organising group.

§ Mr. Douglas
Is it the Minister's contention that that report should be made available to Parliament for discussion? I ask that because there is increasing disquiet that the Government are raping the gas industry to the tune of £1.6 billion and are at the same time scraping round the private sector to obtain funds to finance this important gas-gathering system, which is vital to the interests of my constituency?

§ Mr. Gray
It would not be suitable to make such a report available to Parliament, because this matter is part of a commercial negotiation. Parliament could contribute nothing beneficial at this stage.

§ Mr. Eggar
Can my hon. Friend confirm that work of the gas-gathering pipeline is up to date? When will there be private share ownership of the gas-gathering pipeline system?

§ Mr. Gray
I can confirm to my hon. Friend that the arrangements for the gas-gathering system are up to date. The organising group is making good progress. Approximately £8 million has already been spent, with pre-construction surveys and so on. It is not intended to make private shareholdings available now, but that is an option for the future.

§ Mr. Gordon Wilson
Does the Minister accept, however, that there is concern that there has been slippage in the time scale of the financing arrangements for the gas-gathering pipeline? Will he look into those complaints? Further, will he take on board the fact that the Norwegian gas-gathering pipeline may be going ahead at the same time? That will bring a combined demand for pipe-laying barges and other hardware, which might push up the prices of those items to high levels, if the equipment can be found.

§ Mr. Gray
The answer to the hon. Gentleman's first question is that, naturally, these things take time. A. large quantity of gas and an enormous amount of money are involved. It would be unrealistic to think that arrangements could be concluded overnight. The answer to the hon. Gentleman's second question is that the Norwegians must make their own decisions on those matters. Even so, it is unlikely that the Norwegian pipeline will compete with our pipeline on time scale. We believe that our pipeline will be completed in the 1984–85 period that has been envisaged. We do not expect the Norwegian pipeline to be able to compete with that for progress.

§ Mr. Rowlands
Is the Minister aware that the delays and uncertainties about getting the scheme off the ground are doing considerable damage not only to the industries of my hon. Friends and others, but to the hopes of others, including the Norwegian authorities, in the scheme? There are severe doubts about whether the gas-gathering pipeline will be built in anything like the time scale that the Minister suggests.

§ Mr. Gray
I could not disagree more with the hon. Gentleman. Companies are not apprehensive. Naturally, everyone wants the scheme to get off the ground as soon as possible, but the negotiations are vital both to the companies and to the Government. They must take a Little time.