The UK government has issued the first license under a new regime to encourage the construction of more gas storage. This move is expected to increase UK’s gas storage capacity by 30%. The Gateway Project, located in the east Irish Sea, will create twenty new salt caverns each the size of the Albert Hall.
Lord Hunt, minister of Energy and Climate Change, said: “The successful performance of the UK’s gas system, even during the severely cold weather seen this winter, shows that we have one of the most resilient gas systems in the world. But we do want to encourage more gas storage capacity, like Gateway, to provide flexibility in the future at times of high demand.
“This shows the Energy Act 2008 is proving its worth by enabling the Government to license an important new gas storage project.”
George Grant, chairman of Gateway Storage Company, said: “The support and encouragement given by DECC to bring the Gateway Storage project forward through the new consenting process has been invaluable, as was the Crown Estate’s agreement of the offshore site license.
“We are now fully engaged with the project’s engineering design and are targeting 2014 for the start of commercial storage operations.”
The Crown Estate, which has already agreed and issued the lease for the Gateway project, welcomed the decision.
According to DECC, as North Sea oil and gas supplies decline, there is a greater need for gas import capacity and storage. The UK’s gas import capacity is now about 125% of the country’s 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.
Gateway Storage Company is the name of the licensee of the project, in which a number of salt caverns will be created below the Irish Sea to store 1.5 billion standard cubic meters of gas. Gateway will 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.