Kwasi Kwarteng is looking at relaxing gas quality rules for UK pipelines so North Sea supply can help beat the energy crisis.
According to the Telegraph, the Business Secretary is discussing plans to allow less efficient, lower calorie gas to be piped into the network to make the most out UK reserves.
At a conference in London over the weekend, Mr Kwarteng said “we are exploring domestic gas storage options carefully”, including “potential regulatory options to extract more gas from existing fields”.
Last year Neptune Energy made direct representations to the UK Government to use emergency powers for this very measure.
Today, a spokesman for Neptune Energy welcomed the news, and said the industry’s proposed adjustment to the gas entry specification levels – to similar levels seen in other European countries – would help safely secure additional quantities of gas, bolstering UK energy security, and at no additional cost.
Writing for Energy Voice last year, the firm’s UK managing director Alexandra Thomas said approximately half a trillion cubic feet of lower specification gas has been identified in the Southern North Sea.
Enough for 12 million UK homes
This “not insignificant” volume could be enough to heat 12.2 million UK homes for one year, she said.
Ms Thomas said reducing the lower limit by just 1% would allow for more gas to be used from the Southern North Sea which has already undergone in-depth lab testing.
Last year the UK Government knocked back Neptune’s request with arguments it was not a supply emergency and there would not be an impact on price.
However the Telegraph said the invasion of Ukraine is thought to have changed the equation. Although the UK gets little gas directly from Russia, there are concerns about a knock-on impact to supplies with countries competing for alternatives to resource from Russia.
Any move to reduce the gas rules comes amid rising tensions between the UK Government and the industry, particularly after Chancellor Rishi Sunak was “chastened” over the windfall tax in Aberdeen last week.
The UK Government has been making moves to try to alleviate the coming crunch over winter.
After talks with Westminster, Centrica has applied to reopen Rough, the UK’s largest gas storage facility, after being closed in 2017.
It was announced earlier this month that Equinor and Centrica have agreed a deal to supply an additional 1 billion cubic metres of gas to the UK in time for winter – enough for 4.5 million homes.
In May it was reported that as many as six million households face power cuts this winter, with the Government drawing up plans for rationed electricity if supply issues deteriorate