French utility Gaz de France has signed an agreement with Ineos Enterprises for the commercial development of a proposed salt cavern storage facility at Stublach in northwest England, with a total capacity that could reach 400 million cubic meters of natural gas.

The project, which is located in Cheshire, will be developed in three phases between 2013 and 2018, in up to 28 caverns, making it one of the largest salt cavern projects in Europe. The scheme has already received council and government approval, and so the first phase remains on track to commence cavity development in 2009.

According to Gaz de France (GDF), the new facility, which will be one of the main UK storages, will enhance the security of supply to the UK market. The budget for the scheme is estimated at around GBP350 million (around E500 million).

GDF said that it will operate the infrastructures under a 30-year lease agreement running until 2037 and that the first caverns will be commissioned in 2013. Ineos Enterprises will provide solution mining services for the creation of the caverns.

This initiative will also allow GDF to extend its international storage portfolio in an expanding market by applying its 50 years of experience and expertise in the different storage technologies. The group currently has Europe’s second-largest storage capacity, with facilities in France, Germany, Slovakia and Romania.

GDF said that the UK gas market is the largest in Europe, with a forecast growth of 2% per year, and with imports of natural gas to increase as North Sea production declines. As a result, new gas storage capacity, which brings flexibility to manage security of supply, will develop rapidly. Currently, storage represents around 4% of annual UK consumption, as compared with 24% in France and 19% in Germany.