U.K. Could Lose 50% of its Gas Storage

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

The U.K. faces losing half of its gas storage capacity if British Gas owner Centrica follows through on threats to shutter the Rough storage facility in the North Sea.

Centrica, owner of British Gas, has warned that it is planning to shut the U.K.'s key gas storage hub in the North Sea unless the new U.K. Prime Minister Andy Burnham intervenes. The threat comes at a time when high gas prices and low gas storage levels have become some of the leading energy concerns in Europe. 

Government Funding Sought

The Rough storage hub is located 18 miles off the coast of East Yorkshire in the North Sea. It can store 54 billion cubic feet (bcf) of natural gas, half the U.K.'s gas storage needs, and enough to power the grid for up to six days. Centrica warned that it will shut Rough next April unless it receives government support with regards to gas pricing support. It wants the government to agree to a short-term deal whereby Centrica will pay to fill the reservoir if the government will pay a fee for the storage. According to Industrial Info Resources data, there are 160 gas and hydrogen storage projects in Europe worth more than US$8 billion in investment. The warning came as part of Centrica's recent weak half-yearly results presentation and its decision to axe 1,300 jobs. 

Centrica's Stance

"We continue to engage constructively with the U.K. Government on the future development of Rough," the company stated. "While we remain keen to invest in this nationally important asset, any redevelopment must be supported by a long-term regulated framework which delivers appropriate support. Our current production consent with the North Sea Transition Authority (NSTA) expires in April 2027, and we do not currently intend to seek an extension." The company cited the ongoing oil and gas crisis caused by the war in Iran for price volatility thanks to the greatly reduced flow of Gulf liquefied natural gas (LNG) through the contested Strait of Hormuz. 

A Political Decision 

Chris O'Shea, chief executive of Centrica, told The Observer newspaper: "[This] is a political decision for the government rather than a commercial decision for Centrica." He added: "We've lost eight weeks [since the ideal refill start date], and every day wekeep talking, we keep losing time to get this thing up and running for thecoming winter." The latest data shows that Rough held 31% less gas at the end of June than at the same period last year.

Rough Losing Money

This is not the first time that the future of Rough has been uncertain. It was shut in 2017 when the U.K. government refused to financially support it. It was partly reopened in 2022 after a government request when Russia's invasion of neighbouring Ukraine sparked historic gas price spikes across Europe. At the beginning of last year Centrica warned that the gas storage facility could be closed if the government didn't financially support a £2 billion (US$2.7 billion) redevelopment of the site to allow it to store more gas and hydrogen. Industrial Info Resources is tracking plans for anatural gas to hydrogen conversion project at Rough. At the same time, Irish infrastructure company dCarbonX (London, England) announced plans to build a new gas storage facility in the East Irish Sea that would boost the U.K.'s gas storage capacity by 50%. Industrial Info is tracking four associated projects. 

Gas Storage a European Issue

In April, Industrial Info Resources reported that Europe's gas storage was historically low. Data from Gas Infrastructure Europe (GIE) showed that gas storage levels were  just above 28% in the EU - a record low - with levels in some countries much lower. For additional information, see April 13, 2026, article - Europe Bracing for 'Prolonged Fuel Disruption.' It now looks like the European Union (EU) could be facing the lowest gas storage levels in at least 15 years as it enters the winter heating season. Consultancy Wood Mackenzie reported that the EU's critical gas restocking season, which runs from April to October, will see storage levels at just 76%. 

Key Takeaways

• The U.K. could lose half of its gas storage capacity if British Gas owner Centrica follows through on threats to shutter the Rough storage facility in the North Sea.
• Centica wants the government to pay for storage to offset the high costs of filling Rough with gas.
• Centrica has plans to redevelop Rough to store both gas and hydrogen.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).