Centrica intends to close Britain’s largest natural gas storage site Rough, the utility said on Tuesday morning.
The ageing asset has suffered numerous problems over the past few years. On 12 April, operator Centrica Storage (CSL) said the site would be offline for the 12 months to March 2018 as it underwent testing ( click here for story ).
Rough is operated by Centrica Storage, a wholly owned subsidiary of Centrica.
On Tuesday, Centrica said: “As a result of the high operating pressures involved, and the fact that the wells and facilities are at the end of their design life and have suffered a number of different failure modes while testing, CSL cannot safely return the assets and facilities to injection and storage operations.”
When it was fully operational Rough accounted for around 70% of total British storage capacity and was the market’s sole seasonal storage site.
Britain’s remaining stores are all medium-range, or fast-cycle, emphasising deliverability over capacity.
“From a commercial perspective, an assessment of both the economics of seasonal storage today, and the costs of refurbishment or rebuilding the facility and replacing the wells, suggests that both pathways would not be economic.”
The winter-summer spread, which underpins the profitability of seasonal capacity, has been crushed over the past several years.
CSL now intends to produce all recoverable cushion gas from the field, estimated at 5.2 billion cubic metres (bcm).
Click here to read an ICIS briefing on Rough’s woes. More to follow... email@example.com