The UK’s largest natural gas storage facility could be shut down permanently unless the Government steps in to help unlock critical investment, energy giant Centrica has warned.
Centrica, which owns British Gas, said its Rough storage site in the North Sea may be “decommissioned” after it halted refilling the facility last month due to cost concerns.
The site, located off the Yorkshire coast, accounts for around half of the UK’s total gas storage capacity and is key to meeting peak winter demand.“We are a big business, but this asset will lose probably £100 million this year because the cost of running it is over £100 million,” said Centrica CEO Chris O’Shea during an interview on the BBC’s Sunday with Laura Kuenssberg.
“If we were to simply spend £2 billion redeveloping this field and the summer-winter gas price stays the same, then we will lose that £2 billion and we’ll lose the cost of operating the facility. It’s just not sustainable,” he added.
Despite financial losses, O’Shea made it clear the company is not asking for direct government funding. “What we’re asking for is simply for the Government to help create the conditions which will unlock £2 billion of investment,” he said.
“It will create thousands of jobs in the construction phase, and it will safeguard the jobs of very highly skilled colleagues.”Without support, the site faces full closure. “Inevitably what will happen is that this asset will be decommissioned.
It will be shut down, and we will remove everything that we’ve got here. We’ll make it like it was never here, and we’ll lose this resilience,” said O’Shea.
He also stressed the strategic importance of the facility, pointing out that the UK only has about 12 days of gas storage compared to more than 100 days in countries like Germany and the Netherlands.
If Rough closes, the UK’s buffer could shrink to just six days.Centrica has floated the possibility of repurposing the site into “the world’s single largest hydrogen storage facility,” which O’Shea said could bring “huge savings to consumers.”
The Department for Energy Security and Net Zero responded that Rough’s future remains “a commercial decision for Centrica” but added it was “open to discussing proposals on gas storage sites.”
The debate over energy infrastructure comes amid backlash over executive pay at Centrica. Nearly 40% of shareholders recently voted against the company’s remuneration packages, with O’Shea’s total pay hitting £4.3 million last year, including a 29% rise in base salary.
Defending his pay, O’Shea said: “I have a job where the market rate is more than I ever thought I would earn… The energy transition is a huge economic opportunity… We need an energy system which is clean, that’s resilient, and it’s always available, and it’s affordable.”
A Government spokesperson reiterated their focus on clean energy and affordability: “Our mission for clean power by 2030 is achievable and will deliver a more secure energy system… The future of Rough storage is a commercial decision for Centrica.”
