Centrica shares rally as it bolsters UK gas reserves

SHARES in Centrica rose after it reopened Britain’s largest gas storage facility amid moves to prevent blackouts this winter.

The British Gas owner said its Rough site would operate at around 20pc of its previous capacity and add 50pc to UK reserves.

It is the first time in five years that Centrica has pumped gas into the site. The firm said Rough can store up to 30bn cubic feet of gas for homes and businesses over this winter and 2023.

It comes as the Government looks to ramp up domestic energy sources amid blackout warnings as the Ukraine war hits supplies.

Centrica boss Chris O’Shea said: ‘In the short term, we think Rough can help our energy system by storing natural gas when there is a surplus and producing this gas when the country needs it during cold snaps and peak demand.

‘Rough is not a silver bullet for energy security, but it is a key part of a range of steps which can be taken to help the UK this winter.’

Yet the site off the Yorkshire coast is expected to meet only 1pc of demand on a cold day. Credit Suisse said the ‘economics of storage is highly attractive’ as gas prices are expected to rise. Shares gained 5pc, or 3.5p, to 73.2p.

The FTSE 100 was down 0.37pc, or 26.02 points, to 7047.67 and the FTSE 250 fell 0.91pc, or 165.25 points, to 17,916.67.

Banking stocks took a hit following NatWest’s bleak results.

Shares in Lloyds fell 3.5pc, or 1.5p, to 41.3p while Barclays was down 2.5pc, or 3.8p, to 146.4p and Standard Chartered slid 3pc, or 16.2p, to 519.6p.

Meanwhile, mining giant Glencore fell 0.9pc, or 4.3p, to 496.8p even though it lowered forecasts for the year on zinc, nickel and coal production following a series of setbacks.

Zinc production in the three months to September was affected by supply problems in Kazakhstan linked to the war in Ukraine.

And worker strikes at mines in Canada and Norway hit nickel production, while severe flooding in Australia affected Glencore’s coal output.

Gambling firm Flutter met some of its largest investors following a backlash over executive pay at its annual general meeting earlier this year.

The owner of Paddy Power and Betfair said it will provide an update on discussions over a new policy when its annual report for the year is published. Shares slid 2.7pc, or 310p, to 11245p.

Shares in fashion retailer Asos fell 11.3pc, or 73p, to 573p following a broker downgrade.

Construction firm Grafton Group appointed the former boss of aviation firm Swissport International AG as its chief executive. Eric Born will replace Gavin Stark at the helm of the builders’ merchant next month. Shares sank 3.3pc, or 23.4p, to 692.6p.

And Computacenter fell 4.1pc, or 79p, to 1829p after the tech hardware seller warned it would prioritise investments in IT and cyber-security over profit in the short term. The group said such investments are vital for its ‘longterm success’.

Computacenter also said its supply chain challenges and high levels of inventory would persist through to next year.

IGas Energy criticised the Government for reimposing the ban on fracking in the middle of an energy crisis.

The group said it was ‘shocked and disappointed’ at the decision, adding that the U-turn ‘risks driving investment away’. But its shares rose 8.3pc, or 2.3p, to 30p.

Elsewhere, United Oil & Gas celebrated a positive result after it drilled a well in the Western Desert in Egypt.

The group said the well should boost its production levels once it is brought on stream. Shares rose 14.3pc, or 0.2p, to 1.8p.