Department of Energy and Climate Change
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New offshore gas storage opportunities to open up
A proposed new licensing scheme will open up an area of up to 200 miles around the UK for offshore gas storage and importation projects.
The scheme will create a regulatory environment that will encourage investment in new gas supply infrastructure, including gas storage.
Energy Minister Mike O'Brien said:
"There are promising opportunities for offshore gas storage in depleted oil and gas fields and new salt caverns. But we need to simplify the processes involved so that more investment is forthcoming.
"Gas storage will become more important in the future as the oil and gas in the North Sea continues to decline and other sources of gas play a bigger part.
"Increasing our ability to store natural gas and receive further supplies of Liquefied Natural Gas will help secure supplies of energy for the UK in the future.
"The new system will encourage investment and give companies certainty about the consents required for offshore gas storage and unloading."
The proposed licensing scheme is outlined in a consultation document that was published today by the Department of Energy and Climate Change (DECC).
Under the scheme developers will need to obtain a lease from The Crown Estate for the area they wish to use for gas storage or gas unloading, and a licence from DECC to explore, operate or develop the field or facility.
DECC and The Crown Estate will work closely together to ensure that the lease and the licence can be progressed in parallel.
The scheme will apply to the offshore storage of natural gas in sub-sea geological formations, such as depleted oil and gas fields, salt caverns and potentially aquifers. The consultation also covers the unloading and regasification of liquefied natural gas offshore.
Notes to editors:
1. The licensing scheme will operate in areas of the UK Continental Shelf - up to 200 nautical miles from the mainland - comprising the territorial sea and the Gas Storage and Importation Zone.
2. The consultation document will be available tomorrow (Thursday 12 February) at http://decc.gov.uk/consultations/offshore-gas.html. The 10 week consultation period will end on 23 April 2009.
3. The Energy White Paper set out a commitment to bring forward new legislation to provide a simple consents procedure involving two determining authorities, DECC (BERR at the time) and The Crown Estate. Provision for this was included in the Energy Act 2008.
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