Centrica to shut UK's main offshore gas storage site
20 June 2017
The Rough field, the UK's biggest natural gas storage site under the North Sea, will be permanently shut by operator Centrica because of the age and poor condition of injection and recovery infrastructure. Rough accounts for about 70% of the country’s gas storage capacity and a lack of alternative storage facilities is likely to increase dependency on imports and gas market volatility.
The UK gas and energy supplier said it had undertaken an extensive test programme and concluded that, “as a result of the high operating pressures involved, and the fact that the wells and facilities are at the end of their design life and have suffered a number of different failure modes while testing,” it could not safely return the facilities to injection and storage operations.
Centrica said it would recover the estimated 183 billions of cubic feet (bcf) remaining in the field and seek licences to close the site down.
Seasonal gas storage provides security and flexibility of supply. At times of low demand and therefore low gas prices in the summer, gas is injected into storage to be kept for when demand rises in the winter. Rough was able cover a tenth of the country's peak winter demand.
The UK has seven other gas storage sites but they offer more limited capacity. Without Rough, the country is likely to be more vulnerable to winter price hikes. Wholesale prices would have to rise to attract more gas from Norway, Europe or liquefied natural gas (LNG) suppliers, with a knock-on effect on consumer prices.
European utilities are losing billions of euros from gas storage facilities, triggering site closures and divestments in a market suffering from oversupply and weak demand.
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