For Sale: World War II Oil Pipeline

30 May 2012

An underground network of pipelines which kept Britain’s Second World War effort well oiled could be privatised as part of plans to modernise the UK's energy infrastructure.

Ownership of the Government Pipe-line and Storage System (GPSS) could be transferred to the private sector, according to international legal firm Pinsent Masons.

The GPSS has its origins in measures taken by the Government during World War II to provide a secure oil distribution network for the United Kingdom. The network has been expanded and restructured over several decades and today includes some 2500km of cross country pipe-lines, storage depots, pumping stations and other facilities.

The GPSS distributes some 40% of the aviation fuel which is used in the UK, including international and military airports.

According to Murdo MacLean, an energy specialist at Pinsent Masons, proposals announced in the draft Energy Bill would allow certain assets within the GPSS to be transferred to the private sector.

He said: "These measures will be of particular interest to utilities or other investors who may wish to acquire interests in cross country pipe-lines and related infrastructure and earn revenues from the provision of oil transportation and storage services to Government departments and commercial entities such as airports, which source fuel through the GPSS.

"GPSS is still strategically significant in that it is used to supply major commercial airports such as Heathrow and Gatwick, as well as bases of the Royal Air Force and the United States Air Force throughout Great Britain.”

Pinsent Masons says that although there would be an "upfront benefit" in terms of the capital the Government could receive for the asset, it remains to be seen how quickly the Government will move to invite private sector bids.

The move was announced as part of a package of measures which commentators say will lead to the biggest shake-up of the UK energy market since privatisation.