"The use of gas domestically would contribute towards value creation, industrial and technological development and a better environment - as well as help the lack of flexibility and capacity when it comes to electricity production," he said.

Norway, a major exporter of natural gas to Europe, generates virtually all of its electricity from hydropower. The country generates about 120 terawatt hours (TWh) in a normal year of precipitation but annual consumption is about 118 TWh and rising.

Steensnaes said densely populated areas along Norway's western coast, in the central city Trondheim and around the capital Oslo in the southeast could be brought on stream for natural gas use in the years ahead.

But the minister said there would be no further gas-fired power plants before emissions-free technology becomes available apart from three facilities already approved.

"We have placed a sort of time-out on the development of gas-fired power plants until this technology becomes available," Steensnaes said.

Steensnaes, who came to power on October 19 after a centre-right coalition won a general election in September, said he would fight to protect the environment despite his role as the oil and energy minister of oil-rich Norway.

"The Oil and Energy Ministry is not a ministry which will be aimed at optimising the energy use only to be reined in by considerations for the environment - it will be an intergrated part of the government's environment policies," he said.

Steensnaes said the government aimed to develop 3.0 TWh of wind power and 4.0 TWh of district heating based on environmentally friendly sources of power such as waste heat from industry and heat pumps, before 2010.

Steensnaes, who has said he wants a partial privatisation of state utility Statkraft, said the same would not happen with state grid Statnett.