LONDON – Britain’s Competition and Markets Authority (CMA) has decided to provisionally release Centrica and Centrica Storage Ltd. (CSL) from undertakings concerning the future of the Rough gas storage facility in the UK southern North Sea.
In June, CSL announced its intention to close the plant due to a combination of the facility’s age, physical deterioration, associated safety risks, and the high cost of refurbishment for the facility to remain in operation.
Centrica and CSL had also requested that the CMA remove historic undertakings that included the legal, financial, and physical separation of CSL from Centrica; restrictions on Centrica’s access to capacity; and guarantee non-discriminatory access to capacity for Rough’s customers.
The two companies will also need the approval of the UK’s Oil & Gas Authority to cease their storage operations.
CMA chair Martin Cave said that based on a review of the age and degradation of Rough’s gas wells and other facilities, the assets are deemed no longer capable of safe operation for gas storage without substantial refurbishment.
“We also considered present and anticipated market conditions which meant that the level of investment required to meet the legal obligation to operate safely was not economically viable.”
The Rough undertakings were first made following Centrica’s acquisition in 2002 of the Rough gas storage facility, but were subsequently amended following Competition Commission reviews in 2006 and 2011 and a further review by the CMA in 2016.