Natural Gas (Imports)

Part of the debate – in the House of Commons at 3:32 pm on 30 January 1992.

Alert me about debates like this

Photo of Mr Colin Moynihan Mr Colin Moynihan , Lewisham East 3:32, 30 January 1992

It has been the Government's object to create the market conditions within which competition can work for the benefit of all participants, suppliers, transporters and consumers. Important progress has been made in Britain. The Oil and Gas (Enterprise) Act 1982 and the Gas Act 1986 opened pipelines to competition on the basis of what is now called third-party access and provided for appropriate regulation by the Office of Gas Supply. Under the regulatory regime established when British Gas was privatised, steps taken in response to identified market problems have led over recent years to a growing number of companies supplying gas to industrial customers in competition with British Gas. Additional measures now being discussed will contribute to this process.

The United Kingdom has large reserves of gas on its continental shelf, and liberalisation of the market has provided a spur to their development. The Government support the European Commission's efforts to bring the benefits of liberalisation to the wider market of the Community and to remove barriers to competition and obstacles to trade. A market in which gas moves freely across frontiers and competes its way freely to final consumers provides the best assurance for all, including the emerging market economies of eastern Europe, the continued development of which will bring the environmental attractions of gas within reach of the widest public.

Until now, the United Kingdom has lacked the necessary gas transport links with the European market. I am pleased to say that several companies have told my Department that they would be interested in building a gas interconnector between the United Kingdom and the continent to enable UKCS gas to reach continental markets in competition with other gas suppliers to continental Europe. Six companies—British Gas, BP, Conoco, Elf, Norsk Hydro and Statoil—have now come together to conduct the first stage of a feasibility study on a gas interconnector between the United Kingdom and Europe.

At the suggestion of the companies, it was decided that the group would benefit from having an independent chairman with experience of the oil and gas business. Mr. Geoffrey H. Chipperfield, CB, former permanent secretary at the Department of Energy and currently permanent secretary and chief executive of the Property Services Agency, has accepted an invitation to chair the study, which is now under way. The Government believe that other companies will wish to participate in the full feasibility study when it is launched, and opportunities for this will be opened later in the year.

At the same time, two proposals for the import of Norwegian gas have been put to my Department. National Power proposes to contract a supply equivalent to the consumption of a single power station. Statoil also proposes to negotiate a supply of gas to an independent power generation project in Britain.

In addition to these developments on exports and imports, BP, Statoil and Norsk Hydro propose to establish a joint venture United Kingdom gas marketing company, which will work for increased gas competition in both the industrial and the power generation markets in Britain. I welcome this move.

These developments will make a significant contribution to the opening up of competition and gas trade. We are confident that United Kingdom gas suppliers will benefit considerably from the liberalisation of gas trade throughout Europe.