UK needs ‘greater access’ to gas storage in Europe

The UK needs to secure its gas supplies by gaining “greater access” to an “abundance” of storage in Europe, consultancy firm Mitie Energy has warned.

Britain should make better use of interconnectors rather than building “hugely expensive” storage facilities.

“The UK’s only long-range gas storage facility Rough will be offline this winter raising concerns over the security of gas supplies during the period,” it noted in an analysis. “Ongoing issues at the facility have left many questioning the UK’s lack of gas storage capacity compared with other large European gas markets.”

The Rough facility provides just 3.6 billion cubic metres (bcm) of long-range storage. By comparison Germany, which consumes a similar volume of gas to the UK, has 21 bcm of long-range storage in total.

At the moment the Interconnector which runs from the UK to Belgium is the “sole link” with storage on the continent. There is also the Balgzand Bacton Line (BBL) to the Netherlands but this offers “very little flexibility as it appears to be predominantly booked for supplies bought under long-term contracts”.

“As a result, there are often times when the UK is exporting through the Interconnector but importing through the BBL,” it added. “Freeing up this capacity could provide an additional 50 million cubic metres per day link to storage on the continent – slightly more than what Rough currently contributes”.

Mitie said there is plenty of spare storage to access on the continent. Even by the end of an “extreme” cold spell across Europe in 2013, German storage was still 25 per cent full and Italian and French storage 10 per cent full.

Liquefied natural gas (LNG) is “much less responsive” to supply shortages than the Rough facility or interconnectors as a tanker leaving Qatar, the main exporter to Britain, takes roughly two weeks to arrive in the UK. Nevertheless, the firm said a global glut of LNG and the underutilisation of import facilities meant Britain was unlikely to need to build any new storage capacity itself in the short to medium term.

Gas prices in the UK shot up after Centrica Storage announced in July that a 42-day closure of the Rough facility would be extended over the winter in order to carry out a prolonged testing programme. The facility is expected to come back online in March or April.