HC Deb 10 November 1983 vol 48 c406
16. Mr. Stephen Ross

asked the Secretary of State for Northern Ireland when he expects gas from the Kinsale field to be available to consumers in the Province; and what reduction in current costs can be anticipated.

Mr. Butler

It is expected that natural gas will be supplied to the Belfast area towards the end of 1985 and to Londonderry as soon as possible thereafter. Supply to other areas of the Province will depend on the outcome of independent technical and market studies that I am commissioning. Natural gas tariffs are likely to be up to 25 per cent. below current average town gas prices.

Mr. Ross

May I congratulate the Minister on the successful conclusion of these negotiations, which represent a great step forward for the Province? Will the gas available be sufficient for present known needs—I think that the agreement has a 22-year term with a supply of 1,720 million therms? Will that be sufficient for present known needs?

Mr. Butler

I am grateful to the hon. Gentleman for his opening remarks. I believe that this development will be to the benefit of the Northern Ireland economy and Northern Ireland consumers. We are confident that there is sufficient gas for the period of the contract. We anticipate about a sixfold increase in the consumption of natural gas in taking account of needs.

Mr. McCusker

If it is essential to hold on to existing consumers to get the sixfold increase in demand and to envisage reducing the price in two years by 25 per cent., why is the Minister insisting that the undertakings increase their prices by another 7.5 per cent.?

Mr. Butler

For the simple reason that it was a condition of the subsidy to the undertakings that they should increase their prices in line with fuel and labour costs. In order to attract the subsidy retrospectively for 1982–83, it will be necessary for them to increase prices. I should point out to the hon. Gentleman that the percentage increase in those prices is only a little above that which has obtained for other forms of energy, certainly for coal.