Gaz de France announced this week it will develop a large storage facility in England. The company has signed an agreement with INEOS Enterprises for the commercial development of a proposed salt cavern storage facility at Stublach in the North West.
The total capacity could reach 400 million cubic metres of natural gas. The Group will operate the
facility under a 30-year lease agreement running until 2037 and the first caverns will be
commissioned in 2013. INEOS Enterprises will provide solution mining services for the
creation of the caverns.
This new facility, which will be one of the main UK storages, will enhance the security of
supply to the UK market. The total development investment budget is estimated at around
This major operation gives Gaz de France the opportunity to extend its international storage
portfolio in an expanding market. The Group currently has Europe's second largest storage
capacity with facilities in France, Germany, Slovakia, Romania and the new UK site.
The UK gas market is one of the largest in Europe with a forecast growth of 2% per
year, and with imports of natural gas to increase as North Sea production declines. This
means the new gas storage capacity, which brings flexibility to manage security of supply,
will develop rapidly.
Currently, storage represents about 4% of annual consumption, as compared with 24% in France and 19% in Germany. Storage is a crucial link in the gas chain. Europe is part of the world that offers huge growth potential in this area. Average storage capacity has been growing by more than 5% per year since 1989, as compared with the world average of 1.7% over the same period.