The UK’s biggest natural gas storage site has taken a step closer to reopening after the authority that governs the North Sea gave an initial go-ahead.
The North Sea Transition Authority (NTSA) said it had given a licence to Centrica – the first permission in a multi-stage process.
The authority said it was the “first stage of potential reopening” of the Rough gas storage field, which was closed in 2017.
“The award of a licence allows COUK (Centrica offshore UK) to progress with seeking the further regulatory approvals required before gas storage operations can commence, including further approvals required from the NSTA,” it said.
Centrica submitted its first application in June. If it wants to continue with the process it will have to get more permissions, from the Crown Estate and the Offshore Petroleum Regulator for Environment and Decommissioning.
Centrica is understood to be talking to the Department for Business, Energy and Industrial Strategy about the role Rough might play in helping to insulate the UK from shocks in the difficult gas market.
It is also looking to the future, hoping it might be able to use the site to store hydrogen.
Rough was closed in 2017 because Centrica thought the ageing site could no longer be run safely.
A review found that “as a result of the high operating pressures involved, and the fact that the wells and facilities are at the end of their design life and have suffered a number of different failure modes while testing, (Centrica) cannot safely return the assets and facilities to injection and storage operations”.
The company said major refurbishment would be needed and it would be too expensive, based on the cheap price of gas at the time.
The decision removed a large portion of the UK’s gas storage – it could hold enough gas to run the country for around 10 days.
Now gas is much more expensive, with the price beating several records in recent months, so the economics are different, and Europe is desperate for gas to see it through this winter as Russia threatens to turn off the taps.
On Wednesday the EU told member states to cut gas use by 15% until March amid tensions with the Kremlin over its unprovoked attack on Ukraine.
The proposal could be made mandatory if the European Commission wins the backing of members.