Russia’s Gazprom buys 50% of UK Humbly Grove storage capacity
Gazexport, the export arm of Russia’s Gazprom, has bought 143 million cubic metres (Mm3) of capacity at the UK’s Humbly Grove storage site from trading company Vitol, Gazprom said on Thursday. The contract will run for five years.
Humbly Grove is the most advanced of all the new storage projects in the UK and is on schedule to start commissioning in October this year. The Gazprom contract will start in the summer of 2006, but operator Star Energy said injection could theoretically start from October this year.
Gazprom has started marketing gas directly to customers in the UK through Gazprom Marketing and Trading and already has a small position at the Rough storage site on a yearly contract, a spokesman said. “We are investigating all of the possible UK storage projects and are in other discussions,” he said. “This is clearly only a first step.” He declined to give details of any specific negotiations.
Gazprom also has a large stake in the Interconnector pipeline from Belgium to the UK, which will allow it to bring 5 Gm3 to the UK after reverse capacity is expanded. It also has 2 Gm3 capacity to the UK via the planned BBL pipeline from the Netherlands. Gazprom has access to western Europe’s biggest storage site at Reiden in Germany through affiliate Wingas as well as further upstream in Ukraine.
Humbly Grove in Hampshire is operated by Star Energy with Vitol owning all of the remaining 280 Mm3 capacity until May 2009, with an option to prolong. Humbly Grove will be a medium duration storage facility with deliverability of around 80 GWh/day, meaning it can be emptied in about 39 days.
Star Energy plans to build several other storage sites in the UK, including the Welton project, but none have planning permission yet. Star Energy is mainly owned by banks and hedge funds, with Malaysian state energy company Petronas taking a 16.9% stake earlier in July and Vitol holding 9.48%.
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