§ Mr. Mylesasked the Secretary of State for Energy whether the British National Oil Corporation will in future participate in gases taken from the United Kingdom continental shelf.
§ Mr. GrayI announced on 19 October the Government's intention to introduce measures to abolish the British Gas Corporation's statutory rights over the purchase of gas. These measures are intended to introduce real competition into the United Kingdom market for gas. In the light thereof and since, in my view, the supply of ethane from Fulmar and through the FLAGS pipeline to the British petrochemical industry may be equally well assured without the interposition of BNOC, I have asked BNOC not to exercise participation options in respect of methane and ethane. Where options already exist I have asked it to make such arrangements as may be necessary to enable licensees to enter securely into long-term supply contracts. The question of participation in later streams of ethane will be considered in the light of developments in the years immediately ahead.
The market prospects for liquefied petroleum gases, which require special storage and handling facilities are markedly different from those for crude oil. It is widely 106W expected that the availability of these gases, both from the Middle East and from the North Sea, will grow fast in the present decade and will be more than sufficient to secure supplies for existing United Kingdom markets.
In these circumstances, I do not consider the exercise of further options in respect of LPG to be necessary in the national interest, and I have asked BNOC to confirm that it will not be exercising those options. However, later this decade, security and other considerations may make it desirable for the public sector to play a greater role in the disposal of LPGs from the United Kingdom Continental Shelf. I look to licensees to agree with BNOC to put in place the relevant options to participate in LPGs as in crude oil where these provisions are not already in place.