UK Regulator Warns That More Gas Sources Needed As North Sea Reserves Depleted Further

Britain needs to develop alternative sources of international gas to prevent energy shortages, the Department of Industry and Ofgem, the energy regulator, are expected to warn. Their joint report on the security of Britain's energy supply is to be published during June.

The investigation follows a Cabinet Office report, by the Performance and Innovation Unit, published in February that concluded that there were enough global gas reserves to meet growing demands for the energy source.

Ministers remain concerned that Britain could find itself hostage to a few regional suppliers as North Sea reserves are depleted over the next twenty years. Much of the gas is expected to come from Norwegian North Sea fields, the former Soviet Union as well as Northern Africa.

Brian Wilson, the UK energy minister, today flies to Azerbaijan to look, among other things, at prospects for the new pipeline that a BP-led consortium is planning to build from the offshore Shah Deniz gas field to Turkey through Georgia. With some 700bn cubic metres, the field is expected to start producing about 8bn cubic metres a year from 2005.

Initially, only the three countries through which the pipeline passes will take the gas. But analysts believe Turkey, which plans to import from Russia and Iran as well as Azerbaijan, may have ordered more gas than it needs.

Mr Wilson will give a talk on energy liberalisation before a meeting on Friday in Luxembourg of European Union energy ministers on the same theme. However, EU officials do not expect a breakthrough ahead of France's parliamentary elections, which start on Sunday.