Centrica gets set to reopen Rough gas storage facility

CENTRICA has applied for a licence to reopen Britain’s largest gas storage facility amid a scramble to shore up domestic energy supplies.

The FTSE 250 company is in talks with Kwasi Kwarteng, the Business Secretary, over reopening the mothballed Rough site under the North Sea and yesterday applied for a gas storage licence from regulators.

Centrica shut the site in 2017 saying it was uneconomic to run but is now looking at changing course as concern grows over gas supplies this winter because of Russia’s war on Ukraine.

Britain gets little gas directly from Russia but there are concerns about a knock-on effect if Vladimir Putin cuts off supplies to Europe in retaliation over sanctions.

Europe is also trying to cut its reliance on Moscow for gas supplies, which are a major source of cash for the Kremlin. Both Europe and the UK are now racing to fill up gas storage facilities ahead of winter.

It is thought Rough will cost about £2bn to reopen and could be up and running by September. Negotiations between the Government and Centrica come as the company’s chairman, Scott Wheway, warned this week that windfall taxes would deter investment.

The Government last month raised the tax on oil and gas producers from 40pc to 65pc and is considering extending the windfall tax to electricity producers, as it raises money to cushion households from rising energy bills.

Centrica’s business spans North Sea oil and gas production, electricity generation through a stake in nuclear, and household supply through British Gas.

Offshore Energies UK, the trade body, is seeking an “urgent summit” with Rishi Sunak over the way the tax is implemented and investment costs are offset. A government spokesman said of the windfall tax: “North Sea oil and gas are going to be crucial to the UK’S domestic energy supply and security for the foreseeable future – so it is right we continue to encourage investment there.”