Government Pipeline and Storage System

Tuesday 22nd May 2012 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

A draft Energy Bill has been published today, including provisions to enable the sale of the Government Pipeline and Storage System (GPSS).

The GPSS was established at the beginning of the second world war to supply aviation fuel to military airfields across the country. Since then it has grown to become an important commercial asset, serving a number of major civil airports such as Heathrow and Gatwick. Military use now only equates to around 10% of the GPSS throughput, with the system distributing around 40% of aviation fuel in the UK.

Following a review of the GPSS it has been concluded that it does not need to remain under MOD ownership and could benefit from the investment that a private sector operator can be expected to bring, although a final decision on sale will be subject to market conditions at the time. Such investment has the potential to increase the resilience of the system and allow even greater commercial development by removing current restrictions unless there is an underpinning defence requirement. Sale will not impact on defence outputs and military requirements can be met through contractual arrangements with the purchaser of the system. Consultation is being undertaken across Government to ensure other outputs are similarly accounted for.

The primary purpose of the legislation is to create a set of transferrable rights to maintain, use, remove, replace or renew the GPSS, to restore land if any part of it is removed or abandoned, to inspect or survey the GPSS or the land on or under which the GPSS runs and to access the land on or under which the GPSS runs for these purposes.

The legislation will also provide that where an interest in land is depreciated as a result of the creation of these rights, the owner will be entitled to compensation and impose an obligation on the owner of the GPSS to pay compensation in respect of loss caused by the exercise of these rights.

An exercise is being launched today to notify those landowners on or under whose land the GPSS runs and interested bodies of the impact the legislation will have on them and provide them with the opportunity to comment on the draft provisions, which have been published as part of the draft Energy Bill. As part of this exercise I am also writing today to all those MPs within whose constituency it is situated.

More detailed information can be found on the MOD’s website at: http://www.mod.uk/gpss.

Comments on the draft provisions should be submitted by 31 July and the Government’s response will be published on the MOD website shortly thereafter.