Twenty wells at Britain's Rough gas storage site should be available for withdrawals beginning Nov. 1, Centrica Storage Ltd. (CSL) said on Aug. 22. The number of wells that will be available turned out to be an amount above the operator's previous estimate; this eases concerns about record-low gas stocks this winter.
Centrica, which owns British Gas, one of Britain's largest energy suppliers, imposed restrictions in March last year on how much gas could be stored at Rough as a safety precaution after identifying potential issues with well integrity.
Following investigations, Centrica shut down the facility for injections and withdrawals of gas in June this year and then said the outage would be extended until March or April next year.
However, it also said it hoped to be able to re-open at least four wells for withdrawals only by Nov. 1.
Britain depends on stored reserves to help manage winter demand spikes and to ensure security of supply. The Rough site accounts for more than 70% of the country's storage capacity, National Grid data shows.
There were fears Britain could go into next winter with very low levels of gas stocks, because if only four wells returned to service, the site would have a maximum withdrawal rate of about 5 million cubic meters per day (MMcm/d).
If 20 wells are available for withdrawals, the maximum withdrawal rate is about 35 MMcm/d, based on CSL data earlier this month.
"It certainly eases concerns [about stocks]. It has had an impact on the first-quarter price and beyond, and hopefully it will mitigate future issues if Centrica can address problems now," said Nick Campbell, an analyst at Inspired Energy.
The British gas prices for delivery this winter fell by 0.90 pence to 40.90 pence per therm at 1122 GMT, having previously traded at a high of 42.20 pence per therm earlier on Aug. 22.
The first-quarter 2017 contract was down 0.40 pence at 43.70 pence per therm.
However, CSL said it could not increase the reservoir pressure at Rough while it was doing its well testing program, so no wells were currently available for injection.
Recommended Reading
Bobby Tudor on Capital Access and Oil, Gas Participation in the Energy Transition
2024-04-05 - Bobby Tudor, the founder and CEO of Artemis Energy Partners, says while public companies are generating cash, private equity firms in the upstream business are facing more difficulties raising new funds, in this Hart Energy Exclusive interview.
73-year Wildcatter Herbert Hunt, 95, Passes Away
2024-04-12 - Industry leader Herbert Hunt was instrumental in dual-lateral development, opening the North Sea to oil and gas development and discovering Libya’s Sarir Field.
Baker Hughes Awarded Saudi Pipeline Technology Contract
2024-04-23 - Baker Hughes will supply centrifugal compressors for Saudi Arabia’s new pipeline system, which aims to increase gas distribution across the kingdom and reduce carbon emissions
BP Restructures, Reduces Executive Team to 10
2024-04-18 - BP said the organizational changes will reduce duplication and reporting line complexity.
OFS Sector Loses Jobs, but Trade Org Says Growth Potential Remains
2024-05-08 - According to analysis by the Energy Workforce & Technology Council, the OFS job market may still have potential for growth despite a slight decrease in the sector in April.