CMA frees Centrica from Rough gas storage commitments

Decision follows announced closure of North Sea facility in June

The Competition and Markets Authority (CMA) has provisionally accepted a request from Centrica for the company to be released from historic commitments relating to the Rough gas storage facility.

The request was made after Centrica Storage announced plans in June to permanently close the site due to concerns it had become unsafe and uneconomic.

As part of the closure process, Centrica and Centrica Storage asked the CMA to free them from historic undertakings concerning the operation of Rough which were introduced to ensure competition within the sector.

These included the legal, financial and physical separation of Centrica Storage from the rest of Centrica, restrictions on Centrica’s access to capacity and commitments to non-discriminatory access to capacity for Rough’s customers.

CMA chair Martin Cave, said: “CMA panel members made this provisional decision based on the age and degradation of the gas wells and other facilities at Rough, which mean that the assets are no longer capable of safe operation for gas storage without substantial refurbishment.

“We also considered present and anticipated market conditions which meant that the level of investment required to meet the legal obligation to operate safely was not economically viable. This has led to our provisional finding that the undertakings are no longer required.”

A final decision will be published next month.

The Rough gas storage facility consists of a partially depleted North Sea gas field situated off the coast of Yorkshire, along with an onshore gas processing terminal at Easington near Hull. It is the only long-range gas storage facility in the UK. 

Author: Tom Grimwood,
Channel: Operations & Assets , Policy & Regulation

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