What we do

We manage the UK seabed out to the 12 nautical mile territorial sea limit and, under the 2008 Energy Act, hold the rights for gas storage within the gas importation and storage zone (GISZ), which extends out to the continental shelf

Overview

Overview

Offshore natural gas storage has been taking place within UK waters, in the Rough field, since 1983. By 2015, capacity is likely to be around twice the present capacity. Forecasts of the capacity required by 2020 to ensure security of gas supply during peak demand winter months vary widely, but a value of around four times current developed capacity is not unreasonable.

Government policy is to promote more offshore storage to assist with security of supply. Developers of offshore projects need to be aware that both a storage licence (from DECC) and a storage lease (from us) are required, as set out in the 2008 Energy Act. Effectively this requirement separates the regulatory and proprietary roles.

The leasing process

The leasing process

For storage in a subsurface feature that is not subject to a current petroleum production licence (either a salt cavern or abandoned hydrocarbon field), our grant of rights will be subject to competition requirements. This is likely to require an open, transparent and potentially competitive process, although these requirements will be assessed on a regular basis.

In the case of a depleted hydrocarbon field subject to a current petroleum licence, DECC will have run a competitive oil and gas licensing round which removes the need for us to undertake a further tender process.

We anticipate that a developer will enter into an Agreement for Lease (AfL) which will cover the period during exploration, appraisal and consenting for the gas storage project. The AfL will be conditional upon the developer having obtained a gas storage licence under section 4 of the 2008 Energy Act by a specified date. The appropriate full lease may be entered into once all required consents (including an approved gas storage development plan) have been obtained.