(a) the conveying by the pipeline, or the processing by the facility, of the

quantities of substances which the owner or an associate of the owner

requires or may reasonably be expected to require;

(b) the conveying by the pipeline, or the processing by the facility, of the

5quantities of substances which another person with a right to have

things so conveyed or processed requires to be conveyed or processed

in exercise of that right.

(9) The condition in this subsection is that the notice contains provision for the

purpose of ensuring that if the notice does prejudice any of the matters

10mentioned in subsection (8) any person who suffers loss as a result may

recover from the applicant payments by way of compensation, of such

amounts as are determined in accordance with the notice.

(10) A notice under this subsection may contain such provisions as the Secretary of

State considers appropriate for any of the following purposes—

(a) 15to secure to the applicant the right sought in the access application;

(b) to secure that the exercise of the right is not prevented or impeded;

(c) to secure to the applicant such ancillary or incidental rights as the

Secretary of State considers necessary or expedient, which may include

the right to have a pipeline of the applicant’s connected to the pipeline

20or facility by the applicant or the owner;

(d) to regulate the charges which may be made for the exercise of any right

secured by the notice.

(11) A notice under subsection (10) may also—

(a) contain provision authorising the owner to recover from the applicant

25payments by way of consideration for any right secured by the notice

of amounts specified in the notice or determined in accordance with the

notice;

(b) contain provision permitting a right secured or a duty imposed by the

notice to be assigned.

(12) 30A notice under subsection (10) is to be given to—

(a) the owner and the applicant, and

(b) if the notice contains provision of a sort mentioned in subsection (9),

any person with a right to have anything conveyed by the pipeline or

processed by the facility.

(13) 35A notice under subsection (10) does not come into force unless and until the

applicant indicates acceptance of the terms of the notice in such manner and

within such period as is specified in the notice.

(14) For the purposes of subsection (2)(b) and (c) a pipeline is to be treated as being

situated in the sea in any area if it is situated in, under or over the sea in that

40area.

(15) In this section and section 79 “owner”, in relation to an upstream petroleum

pipeline, an oil processing facility or a gas processing facility, means any of the

following—

(a) a person in whom the pipeline or facility is vested;

(b) 45a lessee and any person occupying or controlling the pipeline or

facility; and

(c) a person who has the right to have things conveyed by the pipeline or

processed by the facility, where such right has been acquired by that

person on terms that—

(i) the person is entitled to exercise the right for a period of one

5year or more; and

(ii) the right is capable of being assigned or otherwise disposed of

to another person.

79 Power of Secretary of State to give a notice under section 78(10) on own

initiative

(1) 10This section applies where—

(a) a person has made an application of a kind mentioned in subsection (1)

of section 78 to the owner of a pipeline or facility, and

(b) the applicant and the owner have not reached agreement on the

application.

(2) 15The Secretary of State may on his or her own initiative give a notice under

subsection (10) of section 78 which would secure to the applicant the right

sought in the application; but this is subject to subsection (7) of that section and

subsections (3) and (4).

(3) The Secretary of State may not exercise the power conferred by subsection (2)

20unless the Secretary of State is satisfied that—

(a) the applicant and the owner have had a reasonable time in which to

reach agreement on the application; and

(b) there is no realistic prospect of them doing so.

(4) In considering whether to exercise the power conferred by subsection (2) the

25Secretary of State must—

(a) take into account (so far as relevant) the matters mentioned in

paragraphs (a) to (g) of subsection (6) of section 78;

(b) give the persons mentioned in subsection (5) an opportunity to be

heard.

(5)

30 Those persons are—

(a) the applicant and the owner;

(b) any person with a right to have anything conveyed by the pipeline or

processed by the facility;

(c) the Health and Safety Executive; and

(d) 35such other persons as the Secretary of State considers appropriate.

80 Compulsory modification of upstream petroleum infrastructure

(1) This section applies where—

(a) a person has made an application of a kind mentioned in subsection (1)

of section 78, and

(b) 40the Secretary of State is considering whether to give a notice under

subsection (10) of that section which would secure to the applicant the

right sought in the application.

(2) If it appears to the Secretary of State—

(a) that the pipeline or facility that is the subject of the application can and

45should be modified so as to increase its capacity; or

(b) that the pipeline or facility that is the subject of the application can and

should be modified by installing in it a junction or other apparatus

through which a pipeline of the applicant’s may be connected,

then the Secretary of State may give the applicant and the owner of the pipeline

5or facility a notice in accordance with subsections (3) and (4).

(3) A notice under subsection (2) must—

(a) specify the modifications which the Secretary of State considers should

be made to the pipeline or facility;

(b) specify the sums or the method for determining the sums which the

10Secretary of State considers should be paid to the owner by the

applicant for the purpose of defraying the cost of the modifications;

(c) require the applicant to make, within the period specified for the

purpose in the notice, arrangements which the Secretary of State

considers appropriate to secure that those sums will be paid to the

15owner if the owner carries out the modifications or satisfies the

Secretary of State that they will be carried out;

(d) require the owner, if the applicant makes those arrangements within

that period, to carry out the modifications within a period specified for

the purpose in the notice; and

(e) 20authorise the owner, if the Secretary of State is satisfied that the owner

has carried out or will carry out the modifications, to recover those

sums from the applicant.

(4) A notice under subsection (2) may also contain provision for the purpose of

ensuring that if the carrying out of the modifications prejudices any of the

25matters mentioned in subsection (8) of section 78 any person who suffers loss

as a result may recover from the applicant payments by way of compensation,

of such amounts as are determined in accordance with the notice.

(5) A notice under subsection (2) which contains provision by virtue of subsection

(4) must (in addition to being given to the applicant and the owner) be given to

30any person who has a right to have anything conveyed by the pipeline or

processed by the facility.

(6) In considering whether to give a notice under subsection (2) the Secretary of

State must—

(a) take into account (so far as relevant) the matters mentioned in

35paragraphs (a) to (g) of subsection (6) of section 78;

(b) give the persons mentioned in subsection (7) an opportunity to be

heard.

(7) Those persons are—

(a) the applicant and the owner;

(b) 40any person with a right to have anything conveyed by the pipeline or

processed by the facility;

(c) the Health and Safety Executive; and

(d) such other persons as the Secretary of State considers appropriate.

(8) If the Secretary of State gives a notice under subsection (2), section 78 has effect

45in relation to the pipeline or facility concerned as if references to the pipeline

or facility were references to the pipeline or facility as it would be with the

modifications specified in the notice.

(9) In this section “owner”, in relation to a pipeline or facility, means any of the

following—

(a) a person in whom the pipeline or facility is vested; and

(b) a lessee and any person occupying or controlling the pipeline or

5facility.

81 Variation of notices under sections 78 and 80

(1) The persons to whom a notice is given under subsection (10) of section 78 or

subsection (2) of section 80 may agree to vary or set aside the notice.

(2) The Secretary of State may vary a notice under subsection (10) of section 78 or

10subsection (2) of section 80 on the application of one of the persons to whom

the notice was given.

(3) But the Secretary of State may do so only if satisfied that the variation is

necessary to resolve a dispute that has arisen in connection with the notice

between the persons to whom it was given.

(4) 15In considering whether to vary a notice the Secretary of State must give an

opportunity to be heard to—

(a) the persons to whom the notice was given;

(b) any person with a right to have anything conveyed by the pipeline

concerned or processed by the facility concerned;

(c) 20the Health and Safety Executive; and

(d) such other persons as the Secretary of State considers appropriate.

(5) For the purposes of this section and section 82, a person is to be treated as

having been given a notice if the person has had assigned to him or her a right

which is secured by the notice or a duty which is imposed by the notice.

82 25Publication of notices and variations

(1) Where the Secretary of State gives a notice under subsection (10) of section 78

or subsection (2) of section 80, the Secretary of State may—

(a) publish the notice or any part of it;

(b) publish a summary of the effect of the notice or any part of it.

(2) 30Where the Secretary of State varies a notice in exercise of the power conferred

by subsection (2) of section 81, the Secretary of State may—

(a) publish the variation;

(b) publish the notice, or any part of it, as varied;

(c) publish a summary of the effect of the variation.

(3) 35Before publishing anything under this section the Secretary of State must give

an opportunity to be heard to the persons to whom the notice was given and to

such other persons as the Secretary of State considers appropriate.

83 Powers of Secretary of State to require information

(1) Where the Secretary of State has reason to believe that a person has made or

40received an application of a kind mentioned in subsection (1) of section 78, the

Secretary of State may by notice require the person to confirm whether or not

that is the case.

(2) The Secretary of State may by notice require a person who has made or

received an application of a kind mentioned in subsection (1) of section 78 to

provide the Secretary of State with specified information for the purpose of

enabling the Secretary of State to decide—

(a) 5whether to exercise any function conferred on the Secretary of State by

section 78, 79, or 80; and

(b) if so, how to exercise the function.

(3) Where a person has applied to the Secretary of State under section 81 for a

notice to be varied, the Secretary of State may by notice require any person

10within subsection (4) to provide the Secretary of State with specified

information for the purpose of enabling the Secretary of State to decide—

(a) whether to vary the notice; and

(b) if so, how to vary the notice.

(4) Those persons are—

(a) 15the person who applied for the notice to be varied;

(b) the other person to whom the notice was given;

(c) any person who has had assigned to him or her a right which is secured

by the notice or a duty which is imposed by the notice.

(5) The information that may be required under subsection (2) and (3) includes

20financial information.

(6) The Secretary of State may not disclose any information obtained under this

section unless—

(a) the person by or on behalf of whom the information was provided

consents to the disclosure, or

(b) 25the disclosure is required by virtue of an obligation imposed on the

Secretary of State by or under an enactment.

(7) In this section “specified” means specified in a notice under subsection (2) or

(3).

84 Enforcement

(1) 30A person is guilty of an offence if, in circumstances falling within subsection

(2), the person provides false information to the Secretary of State for the

purpose of—

(a) inducing the Secretary of State to exercise or not to exercise any of the

functions conferred on the Secretary of State by sections 78 to 81; or

(b) 35inducing the Secretary of State to exercise any of those functions in a

particular way.

(2) Those circumstances are that, at the time the information is provided, the

person—

(a) knows or believes the information to be false; or

(b) 40is reckless as to whether or not it is false.

(3) A person guilty of an offence under subsection (1) is liable on summary

conviction to a fine not exceeding level five on the standard scale.

(4) Proceedings for an offence under subsection (1) may not be instituted in

England and Wales except—

(a) by the Secretary of State or by a person authorised to do so by the

Secretary of State, or

(b) by or with the consent of the Director of Public Prosecutions.

(5) Where an offence under subsection (1) is committed by a body corporate and

5it is proved to have been committed with the consent or connivance of, or to be

attributable to neglect on the part of, an officer of the body corporate, that

officer (as well as the body corporate) is guilty of the offence and is liable to be

proceeded against and dealt with accordingly.

(6) Where an offence under subsection (1) is committed by a Scottish partnership

10and it is proved to have been committed with the consent or connivance of, or

to be attributable to neglect on the part of, a partner of the partnership, that

partner (as well as the partnership) is guilty of the offence and is liable to be

proceeded against and dealt with accordingly.

(7) The duty of a person to comply with a notice under subsection (10) of section

1578 or subsection (2) of section 80 is a duty owed to any person who may be

affected by a failure to comply with it.

(8) Where a duty is owed by virtue of subsection (7) to any person, the duty may

be enforced as if it were contained in a contract between that person and the

person who owes the duty.

(9) 20The duty of a person to comply with a notice under section 83 is enforceable by

civil proceedings by the Secretary of State—

(a) for an injunction or interdict;

(b) for specific performance of a statutory duty under section 45 of the

Court of Session Act 1988; or

(c) 25for any other appropriate relief or remedy.

(10) Civil proceedings under subsection (9) are to be brought—

(a) in England and Wales, in the High Court, or

(b) in Scotland, in the Court of Session.

(11) In this section—

• 30“officer”, in relation to a body corporate, means—

  (a)

  any director, manager, secretary or other similar officer of the
  
  body corporate, or

  (b)

  any person purporting to act in any such capacity;

• “partner”, in relation to a Scottish partnership, includes any person who
  
  35was purporting to act as a partner in the partnership.

(12) In subsection (11) “director”, in relation to a body corporate whose affairs are

managed by its members, means a member of the body corporate.

85 Minor, consequential and supplemental provision

(1) Schedule 2 contains minor and consequential amendments relating to this

40Chapter.

(2) Before exercising any power conferred by sections 78 to 81 in respect of an

upstream petroleum pipeline that is situated partly in a foreign sector of the

continental shelf, the Secretary of State must consult the relevant authorities in

the other country.

(3) The use of a pipeline by any person in accordance with a right secured by a

notice under subsection (10) of section 78 is not a contravention of section 14(1)

of the Petroleum Act 1998.

(4) Subsection (5) applies where—

(a) 5an authorisation has been issued under section 14 of the Petroleum Act

1998 (construction and use of controlled pipelines) for works for the

construction of a pipeline;

(b) the authorisation contains a term of a kind mentioned in section 15(5)

of that Act; and

(c) 10the proposed pipeline is to be a relevant upstream petroleum pipeline.

(5) Before serving a notice under section 15(6) of the Petroleum Act 1998 on a

person other than the holder of the authorisation, the Secretary of State must

give that person an opportunity to make with respect to the proposed

pipeline—

(a) 15an application of a kind mentioned in subsection (1)(a) of section 78 of

this Act, and

(b) if applicable, an application under subsection (3) of that section;

and for the purposes of any such application the provisions of this Chapter

have effect with the modifications in subsection (6).

(6) 20The modification are that—

(a) references to a pipeline are to the proposed pipeline as it would be once

constructed in accordance with the terms of the authorisation;

(b) references to the owner of a pipeline are to the proposed owner of the

proposed pipeline;

(c) 25section 80 is omitted.

(7) In subsection (4)(c) “relevant upstream petroleum pipeline” means an

upstream petroleum pipeline that is “relevant” for the purposes of subsection

(1) of section 78.

86 Interpretation

(1) 30In this Chapter—

• “foreign sector of the continental shelf” means an area within which rights
  
  are exercisable with respect to the sea bed and subsoil and their natural
  
  resources by a country or territory outside the United Kingdom;

• “gas” means any substance which is or, if it were in a gaseous state, would
  
  35be gas within the meaning of Part 1 of the Gas Act 1986;

• “gas processing facility” means any facility operated otherwise than by a
  
  gas transporter which carries out gas processing operations;

• “oil processing facility” means any facility which carries out oil processing
  
  operations;

• 40“payments” means payments in money or money’s worth;

• “petroleum” has the same meaning as in Part 1 of the Petroleum Act 1998,
  
  and includes petroleum that has undergone any processing;

• “pipeline” means a pipe or system of pipes for the conveyance of any
  
  thing;

• 45“upstream petroleum pipeline” means a pipeline or one of a network of
  
  pipelines—

  Energy BillPage 67

  (a)

  which is operated or constructed as part of a petroleum
  
  production project;

  (b)

  which is used to convey petroleum from the site of one or more
  
  such projects—

  (i)

  5directly to premises, in order for that petroleum to be
  
  used at those premises for power generation or for an
  
  industrial process;

  (ii)

  directly to a place outside Great Britain;

  (iii)

  directly to a terminal; or

  (iv)

  10indirectly to a terminal by way of one or more other
  
  terminals, whether or not such intermediate terminals
  
  are of the same kind as the final terminal; or

  (c)

  which is used to convey gas directly from a terminal to a
  
  pipeline system operated by a gas transporter or to any
  
  15premises.

(2) For the purposes of this section—

• “gas processing operation” means any of the following operations—

  (a)

  purifying, blending, odorising or compressing gas for the
  
  purpose of enabling it to be introduced into a pipeline system
  
  20operated by a gas transporter or to be conveyed to an electricity
  
  generating station, a gas storage facility or any place outside
  
  Great Britain;

  (b)

  removing from gas for that purpose any of its constituent gases,
  
  or separating from gas for that purpose any oil or water;

  (c)

  25determining the quantity or quality of gas which is or is to be so
  
  introduced, or so conveyed, whether generally or by or on
  
  behalf of a particular person,

  (d)

  separating, purifying, blending, odorising or compressing gas
  
  for the purpose of—

  (i)

  30converting it into a form in which a purchaser is willing
  
  to accept delivery from a seller, or

  (ii)

  enabling it to be loaded for conveyance to another place
  
  (whether inside or outside Great Britain); and

  (e)

  loading gas—

  (i)

  35at a facility which carries out operations of a kind
  
  mentioned in paragraph (d), or

  (ii)

  piped from such a facility,

  for the purpose of enabling the gas to be conveyed to another
  
  place (whether inside or outside Great Britain);

• 40“gas transporter” has the meaning given by section 7(1) of the Gas Act
  
  1986;

• “oil processing operations” means any of the following operations—

  (a)

  initial blending and such other treatment of petroleum as may
  
  be required to produce stabilised crude oil and other
  
  45hydrocarbon liquids to the point at which a seller could
  
  reasonably make a delivery to a purchaser of such oil and
  
  liquids;

  (b)

  receiving stabilised crude oil and other hydrocarbon liquids
  
  piped from an oil processing facility carrying out operations of
  
  50a kind mentioned in paragraph (a), or storing oil or other

  Energy BillPage 68

  hydrocarbon liquids so received, prior to their conveyance to
  
  another place (whether inside or outside Great Britain);

  (c)

  loading stabilised crude oil and other hydrocarbon liquids
  
  piped from a facility carrying out operations of a kind
  
  5mentioned in paragraph (a) or (b) for conveyance to another
  
  place (whether inside or outside Great Britain);

• “petroleum production project” means a project carried out by virtue of a
  
  licence granted under section 3 of the Petroleum Act 1998 or section 2
  
  of the Petroleum (Production) Act 1934, or an equivalent project in a
  
  10foreign sector of the continental shelf, and includes such a project
  
  which is used for the storage of gas;

• “terminal” includes—

  (a)

  facilities for such initial blending and other treatment as may be
  
  required to produce stabilised crude oil and other hydrocarbon
  
  15liquids to the point at which a seller could reasonably make a
  
  delivery to a purchaser of such oil and liquids;

  (b)

  oil processing facilities;

  (c)

  gas processing facilities; and

  (d)

  a facility for the reception of gas prior to its conveyance to a
  
  20place outside Great Britain.

87 Meaning of “associate” for the purposes of section 78

(1) For the purposes of section 78(6)(d) and (8)(a) a person is an associate of

another if—

(a) either or both of them is a body corporate, and

(b) 25one of them controls the other, or both are controlled by the same

person or persons,

and subsections (2) to (6) set out the circumstances in which one person (“A”)

controls another (“B”).

(2) Where B is a company, A controls B if A possesses or is entitled to acquire—

(a) 30one half or more of the issued share capital of B,

(b) such rights as would entitle A to exercise one half or more of the votes

exercisable in general meetings of B,

(c) such part of the issued share capital of B as would entitle A to one half

or more of the amount distributed if the whole of the income of B were

35in fact distributed among the shareholders, or

(d) such rights as would, in the event of the winding up of B or in any other

circumstances, entitle it to receive one half or more of the assets of B

which would then be available for distribution among the

shareholders.

(3) 40Where B is a limited liability partnership, A controls B if A—

(a) holds a majority of the voting rights in B,

(b) is a member of B and has a right to appoint or remove a majority of

other members, or

(c) is a member of B and controls alone, or pursuant to an agreement with

45other members, a majority of the voting rights in B.

(4) In subsection (3)(a) and (c) the references to “voting rights” are to the rights

conferred on members in respect of their interests in a limited liability

partnership to vote on those matters which are to be decided on by a vote of

the members of the limited liability partnership.

(5) In any case, A controls B if A has the power, directly or indirectly, to secure that

the affairs of B are conducted in accordance with A’s wishes.

(6) 5In determining whether, by virtue of subsections (2) to (5), A controls B, A shall

be taken to possess—

(a) any rights and powers possessed by a person as nominee for it, and

(b) any rights and powers possessed by a body corporate which it controls

(including rights and powers which such a body corporate would be

10taken to possess by virtue of this paragraph).

CHAPTER 4 Special administration

88 Energy supply company administration orders

(1) An energy supply company administration order (referred to in this Chapter

as an “esc administration order”) is an order which—

(a) 15is made by the court in relation to an energy supply company; and

(b) directs that, while the order is in force, the affairs, business and

property of the company are to be managed by a person appointed by

the court.

(2) The person appointed in relation to a company for the purposes of an esc

20administration order is the energy administrator of the company.

(3) The energy administrator of a company must manage its affairs, business and

property, and exercise and perform all the powers and duties of an energy

administrator, so as to achieve the objective set out in section 89.

(4) In relation to an esc administration order applying to a non-GB company,

25references in this section to the affairs, business and property of the company

are references only to its affairs and business so far as carried on in Great

Britain and to its property in Great Britain.

(5) In this Chapter—

• “energy supply company” means a company which is the holder of a
  
  30relevant licence; and

• “relevant licence” means—

  (a)

  a licence granted under section 7A(1)(a) or (b) of the Gas Act
  
  1986 to supply gas, or

  (b)

  a licence granted under section 6(1)(d) of the Electricity Act 1989
  
  35to supply electricity.

89 Objective of an energy supply company administration

(1) The objective of an energy supply company administration is to secure—

(a) that energy supplies are continued at the lowest cost which it is

reasonably practicable to incur; and