Clause 80 - Acquisition of rights to use upstream petroleum infrastructure

Part of Energy Bill [Lords] – in a Public Bill Committee at 4:45 pm on 16th June 2011.

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Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change 4:45 pm, 16th June 2011

This group of amendments effects a number of adjustments and improvements to the provisions of chapter 3 of this part of the Bill, dealing with access to upstream petroleum infrastructure.

Amendments 53 and 55 to 60 are intended to clarify the scope of the chapter and refine it to make the powers provided more effective, both for the Secretary of State and industry. Amendments 53, 59 and 60 clarify that the provisions of this chapter are to apply to gas processing facilities only where they are upstream. It was pointed out to us by a company planning to build a liquefied petroleum gas import terminal that the previous definition of gas processing facility was sufficiently broad that it would catch its proposed facility and it would be possible in principle for someone to apply to the Secretary of State to determine access terms for that terminal. That is not our intention as this chapter has been framed specifically for the upstream petroleum sector.

Amendments 53, 59 and 60 therefore amend the definitions in this chapter so that it applies only to upstream gas processing facilities. The main feature of these amendments is that gas processing facilities now fall within the scope of this chapter only insofar as they are used for processing gas conveyed by pipelines from a production project. That is to say, they are not in scope with respect to gas delivered or arriving by tanker.

Amendment 55 extends the provision for access notices to provide for compensation where the access may reduce the value of the composite liquids passing through the system. Subsection (10) already provides for compensation where the access sought adversely affects the capacity available to other users of the system. This new subsection allows additionally for compensation in cases where the adverse effect in not on capacity, but on the quality or value of the commingled petroleum liquids.

We also wanted to make sure that the provision in subsection (12)(b), for access notices to be copied to all users of the system in question, took account of the commercial interests of the persons most affected by such notices, namely the owners of the facilities and those seeking access to them. We think it is right that other users of the system should be made aware of provisions in the notices that might affect their interests, particularly any provision for compensation under subsection (9). But the owners, or the applicants, might reasonably regard publication of other terms of the notices as being potentially damaging to their interests.

Amendment 56 therefore provides for the Secretary of State to hear any representations from the owners and applicants before copying the notice more widely; and if necessary, to redact the notices appropriately. By virtue of amendments 57 and 58, we have made similar provision in respect of modification notices issued under clause 82. Finally, amendments 61 and 62 remove carbon dioxide pipelines from the scope of this chapter: third-party access to these pipelines will be addressed through separate regulations implementing the third-party access requirements of the carbon capture and storage directive to be laid before Parliament in the near future. These are detailed technical amendments, and I hope that that has clarified their purpose to the Committee. I hope that they will be adopted.