Energy associations and analysts are calling on the UK government to boost Britain’s gas storage capacity amid the new energy supply crisis that has choked oil and gas supply from the Middle East and sent energy prices soaring.
Natural gas prices in the UK and Europe have jumped by more than 50% since the Iran war began, with 20% of global LNG supply offline in Qatar and the UAE, and Asia buying up spot LNG cargoes, outbidding European buyers.
Currently, the UK storage capacity is about 0.9 bcm.
“This means the UK depends on steady domestic flows and Norwegian pipelines, not large seasonal storage,” OEUK, the biggest energy industry trade group, said in the early days of the conflict in the Middle East.
UK energy firm Centrica owns and operates the UK’s largest gas storage site, Rough.
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Centrica restarted storage operations at Rough in 2022 to bolster the UK’s energy security and help reduce consumer bills. It has since expanded the storage capacity of the site in the Southern North Sea and the Easington onshore gas processing terminal in East Yorkshire.
Today, Rough provides half of the UK’s gas storage, being able to store 54 bcf of gas – enough to provide the equivalent volume of gas to heat 2.4 million UK homes over winter.
However, the Iran war exposed the vulnerability of UK gas supply and the need for increased storage, according to energy groups.
“Maintaining and expanding the UK’s gas storage infrastructure is essential for safeguarding the resilience of the UK’s energy system,” OEUK director of policy, Enrique Cornejo, told the Financial Times.
Even before the second energy crisis in four years materialized, the National Energy System Operator (NESO) warned in November that Britain could face risks to natural gas supply in the 2030s as a freefall in domestic production makes it increasingly dependent on imports.
By Tsvetana Paraskova for Oilprice.com
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