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UK awards gas storage license for North Sea project

Energy minister hails move as vital for energy security.

The UK government has awarded a gas storage license for ENI's proposed new gas storage facility at the Deborah field, under the southern North Sea near the Bacton terminal.

This license is said to be a major step ahead of ENI's work to establish whether there is commercial demand for the offshore field to be used for gas storage, and will pave the way for the company to seek further approvals for the facility.

UK energy minister Charles Hendry said that this is potentially a vast and crucial development, and gas storage is a vital means of providing flexibility in the gas market at times of high demand, ensuring energy supplies security.

"The government has made it a priority to ensure we have secure energy supplies, now and in the future, as we do not consider our current gas storage capacity is adequate in a world, where we would be increasingly reliant on imported gas," Hendry said.

"Our plans to legislate on gas security in the forthcoming Energy Security & Green Economy Bill will help underpin commercial demand for gas supply infrastructure, like gas storage and import facilities."

ENI chief operating officer of Gas & Power Domenico Dispenza said that the Deborah gas storage facility will have a working capacity of 4.6bcm, more than doubling the UK's gas storage capacity, and enhancing security of supply for the UK and for North West Europe.

"ENI is pleased that the major regulatory requirements - the agreement for a lease from The Crown Estate and the Gas Storage License from DECC - are now in place," Dispenza said.

ENI anticipates to move towards a final investment decision by the first quarter of 2011, leading to first commercial operation in 2015.