Monday, 25 October 2010

Centrica looking to axe £1.5m gas storage schemes

Centrica, the UK's biggest energy firm is considering abandoning its £1.5
billion plans to build two gas storage facilities in the North Sea.

The energy group, which owns British Gas and Scottish Gas, needs financial
help from the Government to subsidise the project, which would increase
Britain's storage capacity by one-third.

A final investment decision is due to be taken early next year, but it is
understood in the current economic climate the projects will be shelved by

Gas prices fell to a new low for the year in New York last Thursday after
the US Government reported that American supplies grew more than expected in
the preceding week.

The US Energy Information Administration said stocks of natural gas held in
underground storage grew by 93 billion cubic feet.

The larger of the two Centrica projects, being led by construction firm
Baird, would hold 1.7 billion cubic metres of gas, while the second facility
developed by Bains would hold 570 million cubic metres.

The move will be a blow for the Coalition Government, which has set a target
of increasing Britain's gas security as the country becomes increasingly
reliant on imported supplies.

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