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Centrica announces permanent shutdown of Rough storage facility

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Centrica Storage Ltd (CSL) has announced that it will permanently shut the Rough facility in the North Sea – Britain’s largest natural gas storage site.

This latest announcement follows CSL’s recent wells testing programme and analysis. The company has also concluded a review into the feasibility of returning Rough to injection and storage operation. Ultimately, CSL concluded that – due to the high operating pressures involved, as well as the fact that the wells and facilities are at the end of their design life and have suffered various failure modes while testing – it can not safely return the assets and facilities to injection and storage operations.

In addition to this, the company claims that – from a commercial point of view – an assessment of both the economics of seasonal storage today, as well as the cost of refurbishment or rebuilding the facility and replacing the wells, suggest that both pathways would not be economically viable.

Consequently, CSL is planning to make all of the relevant applications to permanently end Rough’s status as a storage facility, and to produce all recoverable cushion gas from the field (estimated at 183 billion ft3).

Reuters reports that, without Rough, Britain could become more vulnerable to winter price shocks. The news agency added that wholesale prices would have to increase to attract more Norwegian, European or LNG suppliers, with a consequent impact on consumer prices.

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