A MAJOR gas storage scheme which will substantially increase UK capacity, reduce the likelihood of seasonal price hikes and help prevent future domestic and industrial shortages has been given the go ahead.

King Street Energy, the Glasgow-based gas storage developer, has been given the green light to develop ten underground caverns in the extensive salt deposits of Northwich, Cheshire. 

The Department of Communities and Local Government  has also given planning permission for a twin pipeline from Cheshire to the Mersey Estuary which will enable sea water to be used to create the caverns more quickly and safely.

The construction of the pipeline asset could also speed up the development of other gas storage facilities in the Cheshire basin where many of the geologically suitable areas for on shore gas storage facilities in the UK are located.  Until now, a lack of sufficient water plus reduced demand for brine has constrained the development of gas storage sites.  

A spokesperson for King Street Energy, said: “We are delighted that this important project has been given the go-ahead. Increased gas storage capacity is urgently needed in this country and developments like ours will add to the UK’s diversity of supply and be vital to securing UK energy needs in the future. It will also allow suppliers to manage the kind of variable demand we’ve seen in recent cold weather much more effectively.” 

The UK has been a net importer of gas since 2004 and currently has enough storage capacity for just 5 per cent of its annual consumption compared with 21 per cent in Germany and more than 18 per cent in the US. The recent cold weather left Britain with only four days of gas left in reserve at one stage. National Grid has in the last week issued four gas balancing alerts – warnings of potential shortages to major users and called on shippers to bring extra supplies into the system.

With the UK expected to be reliant on foreign gas imports for up to 80 per cent of its supplies by 2020, the King Street initiative and others like it will also play an important role in helping the UK to ride out international supply disputes and pipeline reliability problems. It will also help to reduce the UK’s need to import gas when it as its most expensive in the peak winter months

In granting the consent, the Communities and Local Government letter said: “There is clearly an urgent need for additional gas storage in the UK in order to maintain a secure supply of energy in the future. The appeal site is one of a limited number of locations where underground gas storage can be accommodated.”

Niall Trimble, of the The Energy Contract Company, experts in global energy markets, said: “This is excellent news for gas consumers in Britain. Although the gas market in the UK has coped well with the recent period of high demand, greater difficulties lie ahead."