British Gas, one of the UK's key business gas producers, has joined the row over high energy prices in Britain saying it is "part of the solution" rather than part of the problem.

Frank Chapman, British Gas's chief executive, denied that delays to the opening of its Dragon liquefied natural gas (LNG) facility, the diverting of cargoes to Asia and the business's own North Sea production problems had added to the difficulties.

Storage tanks at British Gas's Dragon LNG facility in Wales, which will open in 2008.

A 40% increase in recent investment - including spending on North Sea fields such as West Franklin which has just come on stream - were designed to bring more gas into Britain, he argued.

"You could say we are a large part of the solution...we are definitely not part of the problem," he said. His comments came after reporting a 4% fall in third-quarter output, which was blamed largely on an accident that temporarily hit the CATS pipeline and platform network in the North Sea.

Malcolm Wicks, energy minister, tried to stamp out rising fears about power shortages amid a 30% surge in wholesale gas and electricity prices. Some energy users had blamed delays to the opening of Dragon as adding to the problems.

British Gas said it was "very comfortable" that it was doing all it could to hasten the availability of LNG imports through its terminal at Milford Haven in south Wales which many had expected to come on stream this winter. "Dragon LNG is not late, it's going to be [open] the first half of 2008," said Mr Chapman, who doubted it had played a role in any supply crunch.

BG's boss refused to comment on the current level of gas prices or predict whether they would rise or fall in future. "The market sets the prices...I am not going to speculate on where gas prices are going to go," he added.

The company reported a slump in third-quarter pre-tax profits to £632m from £723m although total operating profits were up 6% to £672m and the City welcomed the results because they were ahead of its expectations.

Analysts at Citigroup praised the performance of the LNG business which produced a 70% increase in earnings of £149m. The investment bank believes this came from diverting high margin cargoes to Asia.

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Sources: http://www.guardian.co.uk/business/

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