Contracts for gas sales and transport

If this was not possible or desirable, permission had to be sought for a landfall outside the country. The general rule was not applied for a long time because of the difficulties presented by laying and maintaining pipelines on the seabed across the deep Norwegian Trench. Nor had a market for natural gas been developed in Norway.

In the summer of 1973, both the Total group and Petronord reached agreement with the British Gas Corporation (BGC) on the sale of the Frigg gas. This meant that all production from the field would be landed in the UK. All companies who found gas on the UKCS were legally obliged to offer it to the BGC. The Total group on the UK side concluded a sales contract with the BGC on 13 December 1973.

The sales contract for the Norwegian share of the gas depended on approval by the national authorities, which was given by the Storting (parliament) in May 1974. An application to lay a pipeline to Scotland was submitted by the Petronord group to the Ministry of Industry on 30 October 1973.

The Storting unanimously approved the government’s proposal to land the gas in Scotland by a vote on 13 June 1974, and the green light was given in a royal decree of 21 June 1974. Signed on 30 July 1974, the Frigg transport agreement called for two pipelines – one British and one Norwegian – to be laid from the field to St Fergus. The Norwegian government secured an option to land gas in Norway but, since the country had no great need of this commodity, it was never exercised.

Signed in July 1974, the Norwegian sales contract with the BGC incorporated a currency guarantee and opportunities for index-based adjustments. The price was to regulated twice a year. This deal was later regarded as one of the best-ever gas sales contracts.

For further details, see the article on landing the gas.