§ Mr. Skeetasked the Secretary of State for Energy in view of his policy on self-sufficiency in this sector, at what price butane would have to be sold in the United Kingdom from North Sea sources to make a further polyisoprene rubber plant an economic proposition.
§ Mr. CryerHigh-cis polyisoprene, a synthetic rubber very similar to natural rubber, is not at present produced in the United Kingdom. The Synthetic Rubber Working Party—now part of the Petrochemicals Sector Working Party—recommended in July 1976 that the United Kingdom should build a large polyisoprene plant using North Sea butanes as feedstock.
The Government have said that they recognise that a commercially viable polyisoprene plant would benefit the national balance of payments, and accord with its policy that North Sea oil and gas resources should be exploited to maximum advantage.
The Synthetic Rubber Working Party has considered the major factors influencing the commercial viability of the project—butane feedstock price and availability; the scale and capital cost of the project; and marketing and product pricing. Of these factors, the working party has given most attention to the butane feedstock. It estimates that, for the project to be viable, the price of butane in this country would need to be in the region of 80 to 100 United States dollars a tonne. The main market for butane is the United States energy market, and this has hitherto set world prices for 269W butane. The current view from potential feedstock suppliers—and endorsed by the Petrochemical Sector Working Party—is that butane would be available for the project in adequate quantity but only at a comparable price of about 120 United States dollars a tonne. But it could be that, in the future, long-term trends in butane supply might favour the project: for example, as schemes are put into action in various parts of the world to increase recovery of butanes and other gases and gas liquids, the prevailing price level may become depressed.