Sleipner Gas (Hansard, 14 May 1984)

§ Mr. Orme
asked the Secretary of State for Energy what progress is being made towards a decision on the proposed purchase on Sleipner gas by the British Gas Corporation; and if he will make a statement.

§ The Secretary of State for Energy (Mr. Peter Walker)
The Government are considering the proposal by the British Gas Corporation to buy Sleipner gas. A number of gas producers and consumers have made representations about the proposal. A decision will be taken as soon as possible.

§ Mr. Orme
Will the Secretary of State confirm that the British Gas Corporation has made a commitment to purchase all North sea gas that becomes available, plus Sleipner gas? If so, is it not in the interests of BGC and of the British economy to go ahead with that agreement? Will he also tell us the truth about the battle between the Treasury and his Department regarding the agreement, as we do not want another huge increase in gas prices, as is apparently advocated by the Treasury, with the backing of the oil lobby?

§ Mr. Walker
The right hon. Gentleman, with his great interest in these matters, will be delighted and relieved to 2 know that there is no great battle going on between myself and the Treasury on this matter. As he knows, this is a major and fairly complicated transaction, involving a great deal of detail, and it is right that a matter of such magnitude should be considered very carefully. It is important to ensure security of supplies for the industry in a way that will not retard the development of our own North sea resources. That is the Government's object in their examination of the proposal.

§ Mr. Rost
Will my right hon. Friend give an assurance that he will not be bullied by the British Gas Corporation into a hasty decision before he has fully considered the implications for the offshore supply industry, loss of revenue, balance of payments and, above all, the price of gas as it will affect the consumer?

§ Mr. Walker
My hon. Friend's comments illustrate the importance and magnitude of the decision. Clearly it must be thoroughly examined, and that is what the Government are doing.

§ Mr. Barron
In relation to the estimated cost of Sleipner gas, is the right hon. Gentleman satisfied that exploration of the smaller areas of gas, including those in the southern North sea, confirm that the proposal should be pursued, as the gas cannot be found in our own areas?

§ Mr. Walker
It is important to develop those areas and not to take any decision that would detract from or stop those developments. Bearing in mind the future requirements of this country, and with the Frigg field, for example, going out of supply, there is no reason why we should not have a transaction which will guarantee the continued development of the North sea, as the hon. Gentleman requires, as well as ensuring security of supplies.

§ Mr. Eggar
Will the my right hon. Friend confirm that it would be possible for the British Gas Corporation to renegotiate the contract both to extend the maturity of the final date for taking all the gas and to reduce the quantity in any one year? Will he also confirm that it would be possible to link any decision on Sleipner with a decision to allow or not to allow United Kingdom gas exports?

§ Mr. Walker
Anything is possible, of course, and a range of complicated considerations are involved. The Government are anxious that there should be continuing development of our North sea resources, especially in the new frontier areas into which we are now moving. There is also a great need to ensure the security of gas supplies to this country.