UK regulator exempts early return of Rough gas store from nTPA rules

UK energy regulator Ofgem has approved Centrica's request for a time-limited exemption from negotiated third-party access rules to expedite the return of the Rough storage facility this winter, the regulator said Aug. 3.

Centrica ended gas storage operations at Rough in 2017. It is currently in discussions with the UK government to reopen the facility but needs a "regulated return model" to support a GBP2 billion investment, it said July 28.

"Allowing gas storage operations at Rough will provide approximately an additional 28 Bcf of gas storage capacity for the winter of 2022/2023 and 59 Bcf for the winter of 2023/2024," Ofgem said.

"We consider that this provides a significant increase in gas storage capacity for GB for the next two winters and, consequently, promotes security of supply," it said, noting the exemption would run to June 30, 2024.

This would allow Rough to be used during the time usually be required to make negotiated third party access arrangements, "providing security of supply for the coming winter and benefiting GB consumers," Ofgem said.

The regulator had not consulted on its decision due to the urgency to reopen the facility, it said.

"The exemption is for a relatively short period of time, less than two years, so we consider that is it likely there would be no adverse impacts on third parties and, if there were any impacts, these would be limited," it said.

In a results presentation July 28, Centrica said a phased return was possible this winter, starting at 30 Bcf in 2022-23 and rising to 60 Bcf in 2023-24.

Initial investment in 2023 was put at GBP150 million. No government funding would be needed if a regulatory support model was in place to underpin infrastructure investment, it said.

Platts assessed the price of quarter-ahead UK natural gas at 472 pence/therm Aug. 2, up 94% since June 30, according to data from S&P Global Commodity Insights.