Centrica granted consents to reopen Rough storage

The North Sea Transition Authority (NSTA) has granted the final consents to Centrica Offshore UK that will allow the company to recommence gas storage operations at its Rough facility in the Southern North Sea.
The facility was closed in 2017 and since then Centrica Storage Ltd (CSL) has been producing the cushion gas left in the facility. At that time of closure gas supplies were plentiful and the UK’s LNG terminals underutilised, while the need to maintain and upgrade the 30-year old facility was urgent, but not economic given the small differential in gas prices over the year. Prior to leaving the EU in 2019 the UK also had access to gas storage in other EU states as part of the Internal Energy Market.
Centrica’s storage arm was created as a separate business unit in 2003 as required by competition authorities after Centrica acquired Rough in 2002.
Bloomberg reported that Rough’s storage capacity would be brought back gradually, with Centrica expecting to inject gas equal to 10 liquefied natural gas cargoes.
Ofgem has granted the facility an exemption from the requirement to offer third party access from 3 August 2022 until 30 June 2024. Generally, under EU rules that still apply, users must be able to negotiate access to storage when technically or economically necessary for efficient access to the system. But in July, CSL applied for exemption from that requirement, telling Ofgem that significant capital expenditure is required to recommence gas storage operations at Rough for this winter and to expand capacity for winter 2023/24. It said that without the exemption, CSL would not make the necessary investment now to repurpose Rough.
Ofgem said it would grant an exemption for less than two years to allow CSL to recover the necessary investment and provide enhanced security of supply. The regulator said that allowing gas storage operations at Rough will provide approximately an additional 28 bcf of gas storage capacity for the winter of 2022/23 and 59 bcf for the winter of 2023/24.
As promised in requesting the exemption, CSL publish a statement on its website alongside an email address that can be used by parties to register an interest in using the infrastructure. It also promised to put in place arrangements to ensure that any unused capacity this winter will be made available to other potential users, including arrangements for an auction.
Longer term, Centrica has highlighted the potential for Rough as a hydrogen store but in 2021 it put the cost of the conversion at around £650 million and said government support would be required, along with a regulated operating model.

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