What will be the future of UK gas storage?

The UK gas system is currently under some strain as Centrica Storage Ltd announced that their largest gas storage site, Rough, would be offline until April 2018. This was announced at the beginning of 2017, and since then, the facility has been withdrawing gas into the UK system and is now only 5% full. Injections into storage will be unavailable until April 2018, and so very little gas remains at the facility for next winter. Rough generally makes up around 70% of UK winter supply. In the absence of Rough, the UK has been heavily dependent on imported gas from Norway, as well as Liquefied Natural Gas from around the world.

The lack of stored gas has begun to raise some questions over the future of gas supply in the UK. Only over the last few weeks, Medium Range gas storage sites have been in operation across the UK to help balance the system (at time of writing). There are eight Medium Range storage site located onshore in the UK which can provide quick response supply in times of high demand. They can also switch operation quickly; i.e. MRS sites can withdraw gas into the UK system in the morning, and then switch in the afternoon to injection into storage to replenish what has been supplied. The only fault with MRS sites is that they have considerably smaller/lower capacity capabilities than Rough (Long Range Storage site). 

 

National Grid’s website notes:

Will we need storage as North Sea gas declines?
The strength of the UK gas supply lies in its diversity and the fact that the UK market is able to deliver gas well in excess of maximum demand. The industry needs to ensure that we have gas to replace UKCS, whether it’s more imported LNG, more interconnector capacity to get gas from the continent, or more storage. As the gas supply market is ultimately responsible for ensuring there is enough gas to meet its customer needs, the market must decide how to replace UKCS.
— National Grid

And on the back of this, there are currently measures being taken to ensure there will be enough gas supply in the UK. While LNG contracts have always been in place, and pipelines connecting the UK to European countries are still flowing healthily, Centrica have been improving alternative offshore facilities to strengthen UK own supply of gas. Centrica have invested £60 million in improvement on Morecambe Bay gas sites. They will be refurbishing some platforms located off shore in Morecambe Bay in an attempt to strengthen gas supply to the UK from the East Irish Sea.

 

 

 

 

Sources: EDF, Centrica Storage Ltd, Energy Live News, National Grid, Reuters.