Pipe network may be sold off

By TERRY MURDEN
Published on 27/05/2012 00:00

AN UNDERGROUND network of oil pipelines developed by the UK government during the Second World War to protect supplies could be privatised as part of plans to modernise Britain’s energy infrastructure.

According to law firm Pinsent Masons, proposals announced in the draft Energy Bill last week would allow the ownership of certain pipeline and storage assets to be transferred to the private sector.

The government pipeline and storage system (GPSS) has its origins in measures taken by the wartime government to provide a secure oil distribution network for the UK. It still connects Leuchars to Linkswood, and Inverness to Lossiemouth.

The GPSS has been expanded and restructured over several decades and today includes some 2,500km of cross-country pipelines, storage depots, pumping stations and other facilities.

It distributes about 40 per cent of the aviation fuel used in the UK.

Murdo MacLean, an energy specialist at Pinsent Masons, said: “These measures will be of particular interest to utilities or other investors.”

The GPSS remains strategically significant because it is used to supply major commercial airports including Gatwick and Heathrow as well as bases of the RAF and the US Air Force throughout Britain.

Pinsent Masons says there would be an “upfront benefit” for the government, though there is no timetable for inviting bidders.