Centrica To Produce 30 Bcf Of Gas From Rough Site By 1Q 2018

Reuters

LONDON, Aug 1 (Reuters) - British energy supplier Centrica said it expects to produce up to 30 billion cubic feet (bcf) of gas from its Rough gas storage site by the first quarter of next year, subject to regulator approval.

In June, Centrica applied to the country's Oil and Gas Authority (OGA) for permission to withdraw remaining stocks and some cushion gas from its Rough site, which it has decided to close.

The facility is Britain's largest natural gas storage site but at more than 30 years old has suffered from prolonged outages due to issues with the integrity of its wells.

Even though it plans to close it, Centrica wants to produce all recoverable gas from the Rough field, which is estimated at 183 bcf, a process which would take years.

In its 2017 interim results on Tuesday, the company said it had applied to the OGA to produce up to an initial 30.7 bcf to reduce pressure on the wells at Rough so risks related to operating the reservoir are as low as possible.

Subject to approval in the third quarter this year, Rough would start producing gas following its planned maintenance period.

"Up to 15 bcf is expected to be produced in H2 2017, with the remainder expected to be produced in Q1 2018," Centrica said.

Centrica took a 224-million pound post-tax impairment charge in the first half of this year related to the Rough field.

"The value of the (cushion) gas covers the future net cost of decommissioning (Rough), depending on the technology we apply," chief executive Ian Conn said on an analysts' call.

Cushion gas is the minimum volume of gas required in an underground storage reservoir to provide the necessary pressure to deliver working gas volumes to customers.

(Reporting by Nina Chestney, editing by Louise Heavens and Jane Merriman)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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