Dispute over North Sea gas

21 October 1996 00:00  [Source: ICB]

The proposed landing site for a North Sea gas pipeline has caused ICI to take on Elf, Shell and BP.

The landing site for a new pipeline from gas fields in the North Sea to the UK mainland has become a controversial issue, setting ICI against the interests of Elf, Shell and BP. The parties await resolution from the UK's department of trade and industry.

The pipeline, planned by French oil company Elf, is proposed to take North Sea gases from the Elgin and Franklin fields to Bacton in Norfolk, for onwards export to Belgium. A branch pipeline would take liquid hydrocarbon condensate to BP's Grangemouth, Scotland, site for processing to supply ethane to BP's two crackers there.

But ICI, the T&G Union chemicals trade group, British Gas and the Teesside Development Board are jointly lobbying the DTI against the plan, insisting the gas should be landed at Teesside. They believe this would attract £1bn ($1.6bn) in chemical industry investment to the area, create new jobs and further the DTI-backed aim of making Teesside into the largest petrochemical complex in Europe. The T&G estimates some 1500 jobs could be generated on Teesside.

Shell is backing the Elf plan, as it would further plans for development of its Shearwater field, adjacent to the Elf ones. BP argues the Teesside route makes little sense when gas can be piped from Grangemouth to Teesside easily, but not the other way round.

BP Chemicals has an interest in Teesside, having a 20% share in ICI's Wilton cracker 'It is quite wrong that the needs of Teesside should be pitted against Scotland once again, instead of working together,' said BP Chemicals ceo Bryan Sanderson.

Shell endorsed BP's feelings, and told ECN that Teesside does not have the facilities to handle the increased volume of liquid hydrocarbons. BP also emphasised that arguments about jobs are unfounded when the development of its new field would create jobs for Teesside anyway.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly