British Energy Minister Peter Hain said the operation of the UK/Belgium gas interconnector pipeline has been “very odd” and hindered competition in the UK gas market.
“Some very odd things are happen…
British Energy Minister Peter Hain said the operation of the UK/Belgium gas interconnector pipeline has been “very odd” and hindered competition in the UK gas market. “Some very odd things are happening on the interconnector. Our concerns are the operation of the interconnector does not reflect market fundamentals,” Hain told the House of Commons Trade and Industry Select Committee. “We are not satisfied the interconnector is acting in a way that is competitive – far from it,” he added. Britain asked the European Commission this month to investigate possible anti-competitive use of the pipeline which opened in 1998 and links Bacton in eastern England with the Belgian port of Zeebrugge. The government, already worried about rising domestic gas bills ahead of an expected election in May, is concerned gas companies have manipulated the gas link to keep UK wholesale prices artificially high. Last month the interconnector flow unexpectedly turned around and the pipe started exporting gas to mainland Europe despite record UK demand and lower prices at Zeebrugge than in Britain. Hain, who was recently appointed energy minister in a cabinet reshuffle, said he hoped the Commission would complete its report as quickly as possible. He told the committee that the pipe, which can import up to eight billion cubic metres a year of gas into Britain, has never been operated at more than 75% of capacity despite booming gas demand. European long-term gas supply contracts are indexed to oil, and the opening of the interconnector meant crude prices have become an important influence on UK gas prices.