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Gas-Gathering Systems

Volume 13: debated on Monday 23 November 1981

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asked the Secretary of State for Energy is he will make a statement on his policy on initiatives by North Sea operators on gas-gathering systems.

I expect the private sector to co-operate on schemes to bring gas and natural gas liquids ashore in an efficient and timely way. I am pleased to be able to tell the House of the first example of this, namely, the northern leg pipeline, which is planned to collect gas from the Magnus, Murchison and Thistle oilfields. The operators have agreed with Shell and Esso that this gas should be delivered through the Far North Liquids and Associated Gas Systems pipeline to St. Fergus starting in 1983. I am informed that full agreements covering construction, transmission and sale are expected to be signed in a matter of weeks.

In answer to a previous question the Secretary of State said that lots of jobs would be available as a result of the gas-gathering system now envisaged.

Will the Minister tell us how many jobs will be available following the abandonment of the scheme envisaged in paper 44, in which all the gas was then envisaged as coming ashore, and not merely the gas to which he has referred, which is due to ullage in the FLAGS system? Will the hon. Gentleman assure the House that his approach will be to optimise the advantage to the United Kingdom economy, because that is what we expected from the gas-gathering system?

I am a little surprised that the hon. Gentleman is being so churlish. He should have been sufficiently gracious to welcome the scheme. Of course it will result in the provision of jobs. It relates to only three fields, but there are many others from which gas will be collected and the companies will come forward in due course, just as the consortium has done.

Does my hon. Friend agree that the news is excellent for the British economy, the consumer and taxpayer and that it should be welcomed by all who have the country's interests at heart? Does he agree that the British Gas Corporation's monopoly of the purchase and distribution of gas was an obstacle to the plans for the gas-gathering pipeline system, and that now that the monopolies are to be broken there should be further good plans for other gas-gathering and distribution systems?

I should be less than fair if I did not remind my hon. Friend that there were a number of reasons for the failure of the gas-gathering pipeline. However, it is certainly true that the British Gas Corporation's monopoly was one of them. My hon. Friend is correct to say that considerable opportunities are now presented for the private sector.

Does the Minister agree that FLAGS would not exist but for the previous arrangement? I am pleased that the Government have managed to welcome one system for the gathering of gas, but does not that system represent about one-tenth of the patchwork quilt that we must weave together to achieve the scale of gas gathering that a common carrier line would have provided?

I can understand the right hon. Gentleman's disappointment at this success. I remind him that the proposal that I have announced today will reclaim about 100 million cubic ft. of gas per day from the three fields. That is merely the start and will be achieved by 1983. The best that we could have hoped for under the original proposal was 1984 or 1985.

The Minister is totally unconvincing. Everybody who has followed the progress knows that the Minister was a passionate supporter of an integrated pipeline. His failure to persuade the Prime Minister on that score led to this partial solution. When will he be able to come to the Dispatch Box and make a specific announcement about the rest of the pipeline, which he said was essential and vital to the national interest?

I hope to come to the Dispatch Box before long and from time to time. I, or one of my colleagues, will make announcements as and when the time comes. Hon. Members must realise that time is involved. One cannot construct and plan a pipeline overnight. This is a marvellous example of how minds have been concentrated to achieve the present stage.