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Halite challenges UK refusal of natural gas storage facility

09 May 2013 16:39:30 | esgm

Storage developer Halite Energy has sent a pre-legal-action letter to the UK government objecting to its rejection of the company's proposal for a natural gas storage facility at Preesall in Lancashire.

The UK Department of Energy and Climate Change (DECC) refused Halite's application last month, citing a lack of comprehensive geological data (see ESGM 9 April).

Keith Budinger, Halite's chief executive, said the company's legal team has sent a "letter before claim" to DECC in relation to the decision. In such disputes, a formal letter before claim must be sent before any legal action to provide an opportunity to settle the matter outside of court.

Budinger said: "The letter sets out prospective grounds of legal challenge to the decision and requests that the secretary of state responds to the issues raised."

Halite's proposed facility would have the potential to store 600 million cubic metres (mcm) of gas for commercial purposes and a total capacity of 900mcm.

Even if the company is successful in overturning DECC's decision, the economic environment into which the Lancashire facility would be brought remains fraught.

Some storage developers whose projects have won environmental approval have yet to make final investment decisions on their projects, while a narrowing of the NBP's seasonal contract spreads has led to a substantial price fall for capacity allocated for the new storage year at Centrica's long-range Rough facility (see ESGM 8 May). Jack Elliott and Tom Marzec-Manser

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