North Sea Gas

Oral Answers to Questions — Ministry of Power – in the House of Commons at 12:00 am on 26th April 1966.

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Photo of Mr Derek Page Mr Derek Page , King's Lynn 12:00 am, 26th April 1966

asked the Minister of Power what consideration is being given by Her Majesty's Government to the planning of pipelines and related equipment for the handling and distribution of North Sea gas.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

asked the Minister of Power what consultations are being held with industry on the modifications of gas-using equipment which will be required for using North Sea gas.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

I am giving very close attention to all the consequences of the discovery of gas in the North Sea. The scope and scale of these consequences will depend on the amounts discovered. The planning of pipelines and equipment for the handling, distribution and use of North Sea gas is in the first place for the gas industry and I am discussing it with them in the context of their capital development programmes.

Photo of Mr Derek Page Mr Derek Page , King's Lynn

Will my right hon. Friend bear in mind the social needs of Norfolk and East Anglia in general for the industry which must flow as a result of these discoveries? Will he keep in close contact with the Regional Council?

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

asked the Minister of Power what additional capital sums he proposes to allocate to the nationalised gas industry for piped distribution of North Sea gas during 1966-70; what compensating economy there will be on capital account in respect of imported liquid methane and associated underground storage, respectively; and whether he will make a statement.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

May I first of all say how pleasant it is to see the hon. Gentleman's moustache again.

Until more is known about the availability of gas from the North Sea, it is not possible to estimate what investment will be required for its distribution. The only firm proposal at present is to construct a pipeline to transmit gas from the British Petroleum Company's wells from the coast to the existing methane grid at a cost of £5 million. No investment has been proposed in connection with additional imports of methane.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

Does the right hon. Gentleman's reply mean that the capital allocation sums during the period between 1966 and 1970 for imported liquid methane will now remain unaltered?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

The capital expenditure in regard to the importation of Algerian methane has been completed. It is not possible to make any capital predictions about North Sea gas in general until we have some idea of the quantities involved.

Photo of Mrs Jill Knight Mrs Jill Knight , Birmingham, Edgbaston

asked the Minister of Power when gas storage tanks will be available in the West Midlands area to house the gas shortly to be available from the North Sea project.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

Storage tanks will not be required for this purpose.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

asked the Minister of Power what is the estimated date for the supply of North Sea gas to Midlands industry.

Photo of Mr Robert Maxwell Mr Robert Maxwell , Buckingham

asked the Minister of Power what is the earliest date on which gas from British Petroleum's North Sea concession is expected to be available to consumers; and what price per therm is to be paid by the Gas Council to British Petroleum.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

The supply of 50 million cubic feet a day is planned to be available by about the middle of next year for use by the Midlands and other gas boards connected to the methane line. Smaller quantities may become available on shore before then. As the House was informed on 4th February, these supplies are being made available under an agreement for 15 years between the Gas Council and British Petroleum. The price of gas under this agreement will in general be for negotiation, but as a limited and temporary arrangement—and I should stress this—the price for an initial period of three years will be 5d. a therm for amounts up to an average of 100 million cubic feet a day.

Photo of Mr Robert Maxwell Mr Robert Maxwell , Buckingham

Does not my right hon. Friend agree that this price is rather exorbitant? Would he not further agree that British Petroleum would be able to recoup its investment within three years, and will he confirm that he will not allow Shell to strike that kind of financial bonanza?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

This agreement was a limited and temporary arrangement suitable for the conditions at that particular time. It does not commit anybody to the same sort of agreement in the future.

Photo of Mr Henry Brewis Mr Henry Brewis , Galloway

By what percentage does the Minister think this will reduce the price to the domestic consumer in the Midlands?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

It is impossible to give a figure till we have some idea of what there is in the North Sea, and this is a figure we have not yet got.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Are the supplies of North Sea gas expected to be of such a quantity as to require a revision of the figures in the fuel section of the National Plan?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

Obviously, this whole question of North Sea gas will change our attitudes to many things. At present, however, no one knows the quantities which are available.