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Energy Security Boost as DECC Licenses Major Gas Storage Project

The £600m Gateway Gas Storage project has received the first gas storage licence to be issued by the UK Government under a new regime designed to encourage the construction of new storage facilities in this country. The licence has been issued under the auspices of the 2008 Energy Act and it consolidates the main environmental and planning consents that were given to the project by the Department of Energy & Climate Change and the UK Marine & Fisheries Agency in November 2008.

George Grant, Chairman of Gateway Storage Company said: "The support and encouragement given by DECC to bring the Gateway Storage project forward has been invaluable, as was the Crown Estate's agreement of the offshore site licence. We are now fully engaged with the project's engineering design and are targeting 2014 for the start of commercial storage operations."

The Gateway facility will add new capacity equal to approximately 30% of current UK storage capacity, sufficient to meet five days of Britain's average gas demand. Gateway will be built in 20 salt caverns, each the size of the Albert Hall, and sited approximately 750m beneath the surface of the seabed. Located 15 miles offshore, south west of Barrow-in-Furness, the storage scheme will be connected to the National Gas Transmission System via a new pipeline to a gas compression station adjacent to the existing Morecambe gas terminals at Barrow.

Last month (January 21st 2010), Gateway announced that AMEC, Parsons Brinckerhoff and Senergy had been appointed to undertake the detailed engineering design work for both the offshore and onshore elements of the scheme. Their work will support a commitment to construction of the facility at the end of this year (2010) and enable the commencement of gas storage services for the UK market in 2014.

Gateway Storage is a company that was formed to develop the gas storage project and is managed by Stag Energy.

Stag Energy is an independent company, headquartered in Edinburgh. The company, established in 2002, has extensive experience of managing the development, construction and operations of gas storage and power generation projects in the UK and overseas.

  • As North Sea oil and gas supplies decline, there is a greater need for gas import capacity and storage.
  • Since 2006 there has been a sharp increase in our gas supply capacity, including the opening of the Langeled pipeline connecting the UK to Norway, the BBL pipeline connecting the UK to the Netherlands, as well as LNG import terminals at the Isle of Grain, Teesside, and Milford Haven (the South Hook and Dragon terminals). The LNG terminals have enabled Liquefied Natural Gas to be imported from global markets, including such countries as Algeria and Qatar.
  • The UK's gas import capacity is now about 125% of our annual gas consumption, which represents a 500% increase during the last 10 years.
  • Gas storage helps the UK's gas market to meet seasonal and short-term peaks in demand, and to respond to price volatility. In recent years, Centrica's Rough field has been the UK's only offshore gas storage facility and our largest single facility, but a number of new projects are now coming forward, both onshore and offshore.
  • The Energy Act 2008 created a regulatory framework, in which Crown Estate controls the exclusive rights to use geological structures beneath the seabed for gas storage, and DECC operates a licensing system that allows us to regulate storage for environmental and other purposes.
  • Gateway Storage Company Limited is the name of the licensee of the project, in which a number of salt caverns would be created below the Irish Sea to store 1.5 billion standard cubic meters of gas.
  • Gateway would be built in salt caverns approximately 750m beneath the surface of the seabed and located 15 miles offshore, south west of Barrow-in-Furness. The Gateway company propose to connect the facility to the National Gas Transmission System (NTS) via a new pipeline to a gas compression station adjacent to the existing Morecambe gas terminals at Barrow.
  • The Department of Energy and Climate Change is central to the UK Government's leadership on climate change. We are pushing hard internationally for ambitious effective and fair action to avert the most dangerous impacts. Through our UK Low Carbon Transition Plan we are giving householders and businesses the incentives and advice they need to cut their emissions, we are enabling the energy sector's shift to the trinity of renewables, new nuclear and clean coal, and we are stepping up the fight against fuel poverty.
Posted 26/02/2010

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