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British Gas faces fierce pipeline opposition

British Gas rivals have joined forces in lobbying MPs to support the hiving-off of the nationwide pipeline network as a separate subsidiary within British Gas. An amendment to the Gas Bill proposing the move, to be discussed next week in the House of Commons, is set to become one of the main issues in the run-up to the liberalisation of the domestic gas market from next year.

Independent companies including Enron Europe, United Gas, Bell Gas and Caledonian Gas have written to MPs calling for a separate company and management to be established. They argue that without separation there is no guarantee of fair play for British Gas rivals which need to use the pipes.

British Gas has created a pipeline arm, Transco, and established Chinese Walls between this and the gas supply businesses. Its rivals say that experience shows that Chinese Walls within a large company do not always work.

The debate has taken on a significant political dimension with Labour opposing the amendment, laid down by Conservative backbencher Alan Duncan. The party said that the disruption of setting up a separate subsidiary could threaten the smooth introduction of competition in the domestic gas market.