Gas-supply deal in pipeline between UK and Norway

Brian Wilson, the energy minister, is this weekend locked in negotiations with his Norwegian counterpart to secure an agreement to pipe critical gas supplies to the UK. The treaty would give the UK access to the vast Ormen Lange field in the Norwegian Sea, and secure gas supplies for decades.

"The current position means that by 2006 we will become a net importer of gas, so the treaty is absolutely essential," said Mr Wilson.

The UK's consumption of gas is set to rise dramatically as the country moves towards cleaner forms of power. The Government predicts that by 2020 some 70 per cent of the country's electricity will be generated from gas. The UK's own North Sea stocks are drying up.

Mr Wilson's meeting with Norwegian energy minister Einar Steensnaes, in Lerwick on the Shetland Islands, is unlikely to diffuse a dispute involving BP, Norwegian state oil company Statoil and Shell. The companies anticipate large profits if the UK taps into the Ormen Lange field and are vying for a lead role.

BP wants the Government to use the existing pipeline systems – Seal, Miller and Cats. It owns a stake in each one and would benefit from an increase in tariffs if they were used. Statoil and Shell, on the other hand, want to construct a dedicated £670m link for the gas supply.

It is understood that both sides have lobbied the Government. But senior Whitehall sources insisted that the weekend's talks were to establish broad agreement between the two countries and would not go into that level of detail.