Plans to build two gas storage facilities in the North Sea at a cost of £1.5bn could be scrapped, according to reports.
Centrica, the UK’s biggest energy firm, needs financial backing from the Government in order to subsidise plans to increase Britain’s storage capacity by a third, the Sunday Telegraph reported.
The British Gas owner is due to make a decision on the investment early next year, but the newspaper said the projects are unlikely to be sanctioned due to the current economic climate.
Construction company Baird is leading on the larger of the two projects, which would hold 1.7bn.m³ of gas. The second, smaller, facility developed by Bains would hold 570M.m³.
The cancellation of the projects would come as a blow to the coalition Government, which has made increasing Britain’s gas security a priority as the country becomes more reliant on imported gas.
Centrica saw overall operating profits for the first half of its financial year jump 65% to £1.56bn, helped by the addition of 223,000 new British Gas customers.