United Kingdom: Lack of gas storage capacity exposes country to risk of high gas prices

The UK government and Centrica have failed to reach an agreement on expanding the UK’s largest gas storage facility. This puts the country, which has relatively little gas storage capacity, at risk of gas shortages next winter, energy experts and MPs have warned, according to the Financial Times. The UK will therefore have to rely on LNG imports, which could prove costly during periods of high demand.

Centrica, which owns British Gas, partially restarted operations at the Rough gas storage facility last October at the government’s request, five years after it was closed. The facility is currently operating at only a fifth of its original storage capacity.

The facility was closed amid concerns about the integrity of the ageing underground spaces at the 30-year-old storage site, which are made up of porous sandstone. Centrica subsequently failed to agree with the government on funding for costly repairs.

The company has now asked the government for minimum revenue guarantees, which it says it needs in order to invest the £150 million required by next winter to double the facility’s capacity to 60 billion cubic feet.