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Energy Bill [HL]


Energy Bill [HL]
Part 2 — Security of energy supplies
Chapter 3 — Upstream petroleum infrastructure

66

 

(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)   

an authorisation has been issued under section 14 of the Petroleum Act

5

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)   

the proposed pipeline is to be a relevant upstream petroleum pipeline.

10

(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)   

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

15

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)   

The modification are that—

20

(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)   

section 80 is omitted.

25

(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)   

In this Chapter—

30

“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

be gas within the meaning of Part 1 of the Gas Act 1986;

35

“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;

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

40

“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;

“upstream petroleum pipeline” means a pipeline or one of a network of

45

pipelines—

 
 

Energy Bill [HL]
Part 2 — Security of energy supplies
Chapter 3 — Upstream petroleum infrastructure

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)   

directly to premises, in order for that petroleum to be

5

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)   

indirectly to a terminal by way of one or more other

10

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

premises.

15

(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

operated by a gas transporter or to be conveyed to an electricity

20

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)   

determining the quantity or quality of gas which is or is to be so

25

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)   

converting it into a form in which a purchaser is willing

30

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)   

at a facility which carries out operations of a kind

35

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);

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

40

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

hydrocarbon liquids to the point at which a seller could

45

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

a kind mentioned in paragraph (a), or storing oil or other

50

 
 

Energy Bill [HL]
Part 2 — Security of energy supplies
Chapter 3 — Upstream petroleum infrastructure

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

mentioned in paragraph (a) or (b) for conveyance to another

5

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

foreign sector of the continental shelf, and includes such a project

10

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

liquids to the point at which a seller could reasonably make a

15

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

place outside Great Britain.

20

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)   

one of them controls the other, or both are controlled by the same

25

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)   

one half or more of the issued share capital of B,

30

(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

in fact distributed among the shareholders, or

35

(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)   

Where B is a limited liability partnership, A controls B if A—

40

(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

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

45

(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

 
 

Energy Bill [HL]
Part 2 — Security of energy supplies
Chapter 4 — Special administration

69

 

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)   

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

5

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

taken to possess by virtue of this paragraph).

10

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—

15

(a)   

is 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

20

administration 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,

25

references 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

30

relevant 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

35

to 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

40

(b)   

that it becomes unnecessary, by one or both of the following means, for

the esc administration order to remain in force for that purpose.

 
 

Energy Bill [HL]
Part 2 — Security of energy supplies
Chapter 4 — Special administration

70

 

(2)   

Those means are—

(a)   

the rescue as a going concern of the company subject to the esc

administration order; and

(b)   

transfers falling within subsection (3).

(3)   

A transfer falls within this subsection if it is a transfer as a going concern—

5

(a)   

to another company, or

(b)   

as respects different parts of the undertaking of the company subject to

the esc administration order, to two or more different companies,

   

of so much of that undertaking as it is appropriate to transfer for the purpose

of achieving the objective of the energy supply company administration.

10

(4)   

The means by which transfers falling within subsection (3) may be effected

include, in particular—

(a)   

a transfer of the undertaking of the company subject to the esc

administration order, or of a part of its undertaking, to a wholly-owned

subsidiary of that company; and

15

(b)   

a transfer to a company of securities of a wholly-owned subsidiary to

which there has been a transfer falling within paragraph (a).

(5)   

The objective of an energy supply company administration may be achieved

by transfers falling within subsection (3) to the extent only that—

(a)   

the rescue as a going concern of the company subject to the esc

20

administration order is not reasonably practicable or is not reasonably

practicable without such transfers;

(b)   

the rescue of that company as a going concern will not achieve that

objective or will not do so without such transfers;

(c)   

such transfers would produce a result for the company’s creditors as a

25

whole that is better than the result that would be produced without

them; or

(d)   

such transfers would, without prejudicing the interests of those

creditors as a whole, produce a result for the company’s members as a

whole that is better than the result that would be produced without

30

them.

90      

Application of certain provisions of the Energy Act 2004 in relation to esc

administration orders

(1)   

Sections 156 to 167 of, and Schedules 20 and 21 to, the Energy Act 2004 (special

administration regime for energy licensees) apply in relation to an esc

35

administration order as they apply in relation to an energy administration

order within the meaning given by section 154(1) of that Act, but with the

modifications set out in subsections (2) to (4).

(2)   

In the application of those provisions generally—

(a)   

for “energy administration”, in each place where it occurs, substitute

40

“energy supply company administration”;

(b)   

for “a protected energy company”, in each place where it occurs,

substitute “an energy supply company”.

(3)   

In the application of Schedule 20—

(a)   

in paragraph 32(d), for the words from “““energy administration

45

application”” to “Energy Act 2004” substitute “““energy supply

company administration application” means an application to the court

 
 

Energy Bill [HL]
Part 2 — Security of energy supplies
Chapter 4 — Special administration

71

 

for an energy supply company administration order under Chapter 3

of Part 3 of the Energy Act 2004, as applied by section 90 of the Energy

Act 2011”;

(b)   

in paragraph 32(e), for “section 155 of the Energy Act 2004” substitute

“section 89 of the Energy Act 2011”;

5

(c)   

in paragraph 36, for “section 154(4) of this Act” substitute “section 88(4)

of the Energy Act 2011”;

(d)   

in paragraph 43, after “the Energy Act 2004” insert “and section 90 of

the Energy Act 2011”;

(e)   

in paragraph 44(5), after “the Energy Act 2004” insert “and section 90 of

10

the Energy Act 2011”;

(f)   

in paragraph 45, after “section 157(1)(e) of this Act” insert “as applied

by section 90 of the Energy Act 2011”;

(g)   

in paragraph 47, after “Part 1 of this Schedule” insert “and section 90 of

the Energy Act 2011”.

15

(4)   

In the application of Schedule 21—

(a)   

in paragraph 1(b), for “section 155(3)” substitute “section 89(3) of the

Energy Act 2011”;

(b)   

in paragraph 12, for “section 155” substitute “section 89 of the Energy

Act 2011”.

20

(5)   

Sections 171 and 196 of the Energy Act 2004 (interpretation) apply for the

purposes of the application by subsection (1) of the provisions mentioned in

that subsection, but with the modifications set out in subsection (6).

(6)   

In the application of section 171(1)—

(a)   

insert, at the appropriate places, the following definitions—

25

““energy supply company” has the meaning given by section 88(5)

of the Energy Act 2011;”;

““energy supply company administration order” has the meaning

given by section 88(1) of the Energy Act 2011;”;

““energy supply company administration rules” means rules

30

made under section 411 of the 1986 Act by virtue of section

159(3) of this Act, for the purpose of giving effect to this Chapter

as applied by section 90 of the Energy Act 2011;”;

““objective of the energy supply company administration” is to be

construed in accordance with section 89 of the Energy Act

35

2011;”;

(b)   

in the definition of “energy administrator” for “section 154(2)”

substitute “section 88(2) of the Energy Act 2011”;

(c)   

in the definition of “relevant licence” for “section 154(5)” substitute

“section 88(5) of the Energy Act 2011”.

40

91      

Conduct of administration, transfer schemes, etc

In section 159(3) of the Energy Act 2004 (conduct of administration, transfer

schemes, etc under Chapter 3 of Part 3 of that Act), after “Chapter”, in the

second place where it appears, insert “(including this Chapter as applied by

section 90 of the Energy Act 2011)”.

45

 
 

 
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