Gas connection to Europe gets approval

Plans for a pounds 500m gas pipeline connecting Britain to mainland Europe took a large step forward yesterday with planning permission for the landing site at Bacton on the Norfolk Coast. The pipeline, in which British Gas has a 40 per cent interest, is regarded as vital if the UK is to resolve the problem of massive over-capacity which is squeezing the company.

Bacton will be home to the gas compression station at the UK end of the pipeline. The consortium, which includes eight other companies including BP, Conoco, Amerada Hess and National Power, hopes to export the first gas in October 1998.

The planning permission from the North Norfolk District Council is a boost to the fortunes of beleaguered British Gas, which continues to be dogged by controversy. The company faces liabilities of about pounds 1.5bn related to contracts with North Sea producers which are forcing it to buy much more gas than it can sell.

The completion of the pipeline will coincide with the opening of the entire domestic market to competition, which starts with a trial in the South-west in April this year.