Gas price moves impact UK storage plans

Centrica says its Rough gas storage facility in the southern North Sea continues to perform well, making an important contribution to the UK gas supply network.

Offshore staff

LONDON -- Centrica says its Rough gas storage facility in the southern North Sea continues to perform well, making an important contribution to the UK gas supply network.

Investment in the facility over the past few years has delivered improvements in injection capability, enabling the reservoir to be filled and depleted to higher levels.

However, the recent narrowing of the differential between the UK’s summer and winter gas prices is impacting underlying returns achievable from the facility and also the economics of Centrica’s three planned gas storage projects.

Engineering studies continue on two of these projects - Baird and Bains - which are both centered on decommissioned offshore production facilities. Both are complex programs, Centrica points out, and satisfactory returns must be achieved on either investment. The company expects to make a decision concerning both schemes in 2011.

07/30/2010

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