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Centrica plans to close Rough gas storage site: Update

20 Jun 2017 12:55 (+01:00 GMT)
Centrica plans to close Rough gas storage site: Update

Adds detail throughout

London, 20 June (Argus) — UK utility Centrica is applying to close its Rough natural gas storage site, after concluding that it cannot safely restart injections.

The firm plans to produce all recoverable cushion gas, which is estimated at 5.18bn m³. Centrica has completed well integrity tests at the site and concluded that injections cannot resume.

The "different failure modes" of some of the wells, combined with wells and facilities at the end of their design life, mean that the company cannot safely return Rough to storage operations, it said.

Refurbishment and replacing the wells would not be "economic" from a commercial perspective, because of tight seasonal spreads.

Centrica has to wait for approval from the UK government before it can begin extracting Rough's cushion gas. Receiving permission could take a number of months, it said.

Withdrawal capacity is unavailable until the start of the 30 September gas day because of planned maintenance. No further constraints are detailed, so withdrawals could be available from the start of winter, depending on government approval.

But producing all the cushion gas would take years, Centrica said. The firm intends to publish a withdrawal curve for the facility before withdrawal operations recommence. Maximum withdrawal capacity will depend on the number of wells that are operational.

The last withdrawal curve was published in October, when Centrica expected Rough to be operating with 18 of the 24 wells at the 47/3B platform, allowing maximum withdrawal capacity of around 32mn m³/d, with 1.3bn m³ in storage.

But more wells subsequently failed pressure testing, with six of 12 that had been assessed by February unable to restart injections by the start of summer — although withdrawal capacity remained available in early summer.

Centrica published withdrawal scenarios based on four, eight, 12, 16 or 20 wells returning to operation in summer 2016.

Maximum withdrawal capacity would have been around 37mn m³/d with inventories of just under 1.3bn m³ and 20 wells, compared with 28mn m³/d with 16 wells, 16mn m³/d with 12 wells, 14mn m³/d with eight wells and 7mn m³/d with four.