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Bnoc: Gas Liquids Mandate

Volume 417: debated on Wednesday 25 February 1981

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asked Her Majesty's Government:Whether, and if so under what circumstances, the British National Oil Corporation has a mandate from the Government to be the major trader in all gas liquids, including ethane, which will be carried by the proposed gas gathering pipeline in the North Sea.

Replying on 17th December in another place to the honourable Member for Sheffield (Mr Hallam), my honourable friend the Minister of State for Energy said that he would not stand in the way of the exercise by the British National Oil Corporation of the rights to natural gas liquids which it enjoys under participation agreements. He stated that the British National Oil Corporation and the British Gas Corporation would co-operate in the arrangements for the disposal of the gas liquids from the proposed gas gathering line. The corporations will make their own arrangements about the form of their co-operation. I understand that, while the two corporations will be jointly responsible for determining sales policy and the conditions of sale, the British Gas Corporation is to take responsibility for sales contracts for ethane, while the British National Oil Corporation will have responsibility for sales contracts for the other liquids.The quantities subject to the British National Oil Corporation's participation rights, together with the volume available to the two corporations as licensees of gas liquids expected to be carried through the proposed line and any further quantities acquired in commercial negotiations, will in practice make the corporations the major trader in these gas liquids including ethane.This should facilitate the prompt entry into disposal negotiations necessary to the project. However, my honourable friend made it clear that there is no obligation on licensees to sell through an intermediate agency that part of their natural gas liquids which they will retain after the exercise of participation rights.