Gas prices for the coming winter surged more than 8% on Wednesday after Centrica Storage said its Rough facility would close until 3 August. The plant accounts for 72% of the country’s gas storage capacity, but has been affected by safety issues. The move could push the UK’s gas stocks to record lows this winter. There have been problems at the Rough facility since March 2015, when Centrica imposed restrictions on storage levels because of an issue with its wells. While testing the wells involved, Centrica said, it had “identified an additional issue” on one of them.
Wholesale gas prices have been volatile
following news that the UK’s largest gas storage
facility is being shut down for 42 days.
Gas market specialist Niall Trimble of the Energy Contract Company said the Rough facility was a key part of the UK’s gas storage network.
“After all these years, it’s still the majority of our storage,” he said.
Analysis: John Moylan, industry correspondent
When I took the short flight to the Rough gas field in 2011, its two platforms and 30 wells were operating at full pelt. The field, which lies around 20 miles off the East Yorkshire coast, was providing gas for the UK.
It’s been doing that since the 1975. It was converted into our major gas storage facility a decade later. But last year, a limit was imposed on the maximum operating pressure of the facility, reducing the volume of gas stored there by about a third. The UK has been consuming less gas in recent years. And we have more sources of gas – including LNG and pipelines to Europe – than ever before. But this latest setback raises more questions about how long Rough can continue – and what will take its place?
“But it’s old. These things have a finite lifetime without major refurbishment. Things start to break down.
“There’s the immediate problem that we might not be able to fill it in time for winter. I suspect we might not be able to fill it completely.
“But longer term, this raises questions about how long this vital storage facility can keep operating.”
Mr Trimble said that if Europe had to endure a cold winter, it might be difficult for the UK to bolster its supplies with gas from the continent.
“If stocks look tight, we can try to source more LNG [liquefied natural gas] shipments. But they can take several weeks to arrive,” he added.