The UK competition watchdog has opted to remove historic undertakings relating to the Rough gas storage facility in the North Sea.
Rough is a partially depleted gas field, 18 miles off the coast of Yorkshire.
It is a layer of sandstone under the North Sea that operator Centrica has been withdrawing and injecting gas into and out of through 30 different boreholes, or wells.
The sandstone is covered with a separate layer of impermeable rock, which acts as a natural cap to keep gas from escaping up to the sea.
The facility had the potential to hold 70% of the UK’s gas storage capacity.
But back in June it was announced that it was to close due to its age, physical deterioration and the associated safety risks, plus the high cost of refurbishing the facility to make it workable.
Following on from that facility’s owners, Centrica plc (Centrica) and Centrica Storage Limited (CSL), requested that the Competition and Markets Authority (CMA) remove historic undertakings – designed to ensure competition in the sector – as part of the closure process.
These included the legal, financial and physical separation of CSL from Centrica, restrictions on Centrica’s access to capacity and ensuring non-discriminatory access to capacity for Rough’s customers.
Following a review, the CMA has provisionally decided to release CSL and Centrica from these undertakings.
The companies will also need agreement from the Oil and Gas Authority to cease its their storage operations.
Martin Cave,CMA chair said: “CMA panel members made this provisional decision based on the age and degradation of the gas wells and other facilities at Rough, which mean that the assets are no longer capable of safe operation for gas storage without substantial refurbishment.
“We also considered present and anticipated market conditions which meant that the level of investment required to meet the legal obligation to operate safely was not economically viable. This has led to our provisional finding that the undertakings are no longer required.”