UK Faces Tight Winter - correction
Para 1 of this story, originally published on July 18, said "unlikely to inject any gas until mid-autumn"; it is corrected below to "unlikely to withdraw any gas until mid-autumn."
Centrica says the UK’s largest gas storage facility, the offshore Rough field, will not inject any more gas until spring 2017 and is unlikely to withdraw any gas until mid-autumn. The July 15 announcement caused prompt UK gas prices to fall, but those for winter gas to rise by 10% to a 12-month high.
Rough has capacity for 150bn ft³ (4.25bn m³) but the volume stored is only one-third of that, namely 50bn ft³ so – unless there is a subsequent revision to Centrica Storage’s plans – that is now the maximum that will be available from Rough this winter.
Centrica Storage (CSL) said on the afternoon of July 15 in a ‘Remit’ notice that a 42-day outage, announced a month ago, to conduct pressure-testing revealed a problem at one well and indicated “potential uncertainties” at others, adding that the outage will be extended until March or April 2017.
“In the meantime because of the uncertainty as a prudent and safe operator CSL cannot inject or withdraw gas from Rough,” it noted July 15.
CSL will however examine “the feasibility of returning a number of wells to service for the winter 2016/2017 withdrawal season” and “anticipates it will complete this study by October 30, 2016.”
It expects at least four wells to return to service for withdrawal operations by November 1, 2016 – but it said that CSL cannot increase the Rough reservoir pressure during the testing programme, and so there would be no injections to storage.
Centrica's Rough Storage platform (Credit: Centrica)
The wording suggests it expects to return 4 or more wells to withdrawal by November 2016 but that there is a small risk that none might resume withdrawals this year.
CSL said it will “publish a revised withdrawal curve as soon as it is available” but that, whilst testing is ongoing, it has suspended the sale of Storage Bundled Units for the year starting spring 2017.
The price of winter gas (Oct 1 2016 - Mar 30 2017, delivery at the national balancing point hub) on ICE futures ended July 15 at 47.7p/th ($6.29/mn Btu) – up 10% on the July 14 close of 43.44p/th. As of July 18 morning the winter 2016 price had eased slightly to around 46.85p/th
Normally Rough is filled by the start of the winter season to its full 4.2bn m3 capacity. It represents about 90% of the UK's total normally available gas storage capacity of about 4.6bn m³.
Mark Smedley