Oral question asked in the House of Lords, by Lord Crickhowell (Conservative). It was answered on Wednesday, 30 November 2005.

Gas Supply

Question: My Lords, is the noble Lord aware of the considerable concern among heavy fuel users at the lack of transparency in the present arrangements and the scope that there may be for suppliers to manage them to the disadvantage of this country? That fear is reinforced by the granting of licences for LNG terminals that exclude third-party use and which seem guaranteed to ensure that Britain pays the highest price in the market or has its supplies diverted elsewhere. Is he leaving this matter entirely to the Commission, or are the Government prepared to take action about the matters that are under their control?

Answer: My Lords, the methods we are pursuing at the European Commission are the appropriate channels for effective action, and we have made it absolutely clear that we expect action to be taken. The noble Lord is right that there are anxieties for the very big consumers of gas in view of the shortages. We expected the interconnector to bring more gas into the UK than has proven to be the case. The noble Lord is right that the price being offered is high enough and competitive. Therefore, there are imperfections in the market which alone explain why this gas is not available. It is important to the Government that there has been substantial private investment in terminals for LNG because we will be dependent on additional storage facilities, and we are pleased to record the fact that several major terminals will come on-stream in the very near future.

Secondary information