Centrica has been given the green light to reopen the UK’s largest gas storage facility.
The Rough gas storage site off the coast of Yorkshire comprises a partially depleted gas field in the North Sea and an onshore gas processing terminal at Easington.
The facility, which once accounted for around 70% of the UK’s gas storage capacity, was closed by Centrica in 2017 after a testing programme identified problems with a number of the 30 wells used to inject and withdraw gas from the Rough gas field. The firm said it was no longer commercially viable to operate the facility safely.
In June, Centrica applied to North Sea Transition Authority (NSTA) for a storage licence for the Rough site to enable it to reopen the facility in response to the current gas crisis. The licence was granted by the authority in July.
In a statement on its website on Tuesday (30 August), the NTSA said it has now granted Centrica “all of the required NSTA regulatory approvals to commence gas storage operations.”
NSTA chief executive Dr Andy Samuel said: “It’s testament to the hard work and commitment of the teams that we have been able to move through the licensing and consent process both thoroughly and at pace, to bolster energy security by enabling Centrica to start injecting gas at the Rough storage facility.”
Writing on Twitter, the decision was also noted by business and energy secretary Kwasi Kwarteng, who said: “After months of work, the UK oil and gas regulator has today granted the required approvals and consents to Centrica to open the Rough gas storage facility off the East Yorkshire coast.”
Centrica declined to comment on when it will resume operations at the site.
Meanwhile, Ofgem has granted urgent status to a Uniform Network Code (UNC) modification proposed by Centrica that would allow the company to transfer previously acquired entry capacity to the National Transmission System (NTS) to the Aggregated System Entry Point (ASEP) for the Rough site.
Prior to the closure of the facility in 2017, Centrica acquired long-term entry capacity at the Easington ASEP, which at the time could be used to enter gas into the NTS from both Rough and the Easington Beach entry point.
Following the introduction of the Tariff Network Code – a network code on harmonised gas tariff structures that was established by a European Commission regulation and transposed into UK law following its departure from the EU – entry capacity is now treated differently for storage and non-storage entry points.
National Grid Gas subsequently created a new ASEP for Rough, enabling entry capacity to be booked with the appropriate discounts and exemptions applied. However, this also means Centrica can no longer use the long-term entry capacity bought for the Easington ASEP to withdraw gas from Rough and would therefore have to purchase new entry capacity at much higher prices.
The modification proposed by Centrica, designated UNC817, would allow the company to transfer entry capacity booked for Easington to the new Rough ASEP, with nominations being made on a monthly basis for each day in the following month. The arrangements would be temporary, ending on 31 March 2023.
Ofgem has now granted urgent status to the modification without making any judgment on the merits of the proposals.
The regulator said the operation of the Rough gas storage facility over the coming winter could provide a “significant increase in gas storage capacity for Great Britain and, consequently, promote security of supply.
“In this context, we recognise that uncertainty regarding the applicable charging arrangements at Rough could be detrimental. Therefore, regardless of Ofgem’s decision on UNC817 and the resulting charging arrangements at Rough ASEP, we recognise it is important to give clarity on the arrangements ahead of the upcoming winter.”
Ofgem also noted the new Rough ASEP was only created on 4 August: “This has left limited time to clarify the relevant commercial arrangements at this ASEP. The ordinary governance process would not allow the consideration of the modification ahead of the upcoming winter in the absence of urgency.”
The regulator said it expects to receive the UNC panel’s recommendation on the proposals on 8 September.