Gas storage will help UK cope with depleted North Sea reserves

Since the 1960s the UK's main supplies of natural gas have come from the North Sea. But these reserves are rapidly declining: by 2005 UK production had fallen by around 19 per cent since 2000 (when it peaked). By 2004 the UK became a net importer and by 2020 the country is projected to be importing between 70 and 80 per cent of our gas needs.

In the past the UK's gas production fields acted as the country's de facto gas storage capacity. Now that production is diminishing and the country is more dependent on imports the UK requires more gas storage capacity.

Storing gas in underground caverns and oil fields means the country is better able to meet peaks in demand. Consequently there has been a clutch of proposed new storage projects designed to boost existing storage facilities. These currently have a capacity representing around five per cent of UK annual demand.

Increasingly the spotlight has been on developing storage facilities in so-called salt cavities (see background box). The use of underground caverns in salt rock formations to store natural gas or other hazardous gases is long established and is common around the world.

In the UK the practice was first used in 1959 at the Saltholme brine field on Teesside where products such as ethylene, ethane and naptha continue to be stored. The cavities are usually charged and discharged through a single borehole which is designed and constructed to standards similar to those used for offshore oil or gas extraction wells.

*Hornsea*

The longest established site used for natural gas storage was commissioned in 1979 at Hornsea in east Yorkshire. There are now other operational salt cavity natural gas storage sites (Cheshire has two: at Holford and Hole House) and a number of others are climbing off the drawing board.

Some schemes have experienced protracted planning and safety problems. Cannatx's proposed project at Preesall in west Lancashire is probably the most high profile example. The project generated huge local controversy and attracted literally thousands of objections when it was first considered. The planning authorities involved refused permission. The company appealed but the scheme was rejected after a public inquiry by the Secretary of State for Communities and Local Government, acting on the advice of an independent planning inspector and a specialist technical assessor.

The developer now admits that the company was not as thorough about its technical case as it should have been; it also concedes there were legitimate environmental issues which again were not adequately addressed. The company recently announced it would be resubmitting its plans for the scheme and insisted it would be able to meet head on all the objections which torpedoed the scheme first time round. The jury is out on that.

Natural gas is extremely flammable at concentrations of around 5-15 per cent and explosive when it encounters a source of ignition, if in a confined space. However, explosions cannot occur in underground storage as positive pressure is maintained, preventing the ingress of large quantities of air.

*Escapes*

Gas, though, can migrate and escape from underground storage. This is why there are stringent health and safety regulations related to gas storage infrastructure in the UK, enforced by the safety watchdog, the Health and Safety Executive (HSE).

There are naturally occurring pathways and mechanisms which mean that some liquids and gases naturally present in petroleum reservoirs can reach the earth's surface. Indeed, the presence of these 'seeps' drove the early UK onshore exploration for oil and gas.

What the operator has to do is assess the risks and demonstrate to the satisfaction of the HSE and so-called Hazardous Substances Authority (generally the planning authority) that there is no unacceptable risk due to gas migration from the depleted hydrocarbon reservoirs being used for gas storage.

In fact, gas storage has been undertaken at operating gas fields in Canada since 1915 so there is now well over 90 years of experience with the technology. There have been some cases where gas has escaped and migrated from these facilities, chiefly in North America (particularly in the United States) but there have been cases on mainland Europe. Most cases appear to have occurred where storage operations were poorly regulated or where drilling practices were deficient.

*Good safety*

Currently the safety record in the UK for salt cavern storage and depleted field storage is extremely good. There have been no incidents involving members of the public.

Because of the large quantities of gas involved, storage facilities are classified as major hazard sites under the Control of Major Hazards Regulations (COMAH). Operators must develop on-site emergency plans which detail how they would respond to an incident and how they would minimise the consequences.

Operators must prepare safety reports covering their facilities which consider the effect of foreseeable hazards such as earthquakes and seismic movement on the salt cavities and any release that might result.

Land use planning is affected by the location of storage facilities. Some categories of development cannot be sited near the storage site because of the safety risk. Currently the HSE is considering strengthening these controls as a result of the fire and explosions at the Buncefield oil depot in Hertfordshire back in 2005. For the first time the plan is to factor in what is called societal risk.

*Gas storage - a brief history*

In the UK, gas may be stored onshore in two types of underground facility. It can be stored in the strata of former oil and gas fields, where gas is injected back into the reservoir from which oil and/or gas has been removed. A second option is so-called 'salt cavity' storage. This involves creating cavities in underground salt strata by dissolving some of the salt and filling the resultant void with gas. This technique is sometimes called 'brine mining'.

Different types of gas storage are used for different purposes. Gas stored in former oil/gas fields takes time to extract and so is generally used to help the UK meet seasonal demand over the winter months. Gas stored in salt cavities can be extracted much more quickly, and can be used to help us meet peak demand periods (e.g. over a few cold winter weeks).

Liquefied natural gas (LNG) is also stored onshore in large storage tanks situated at strategic parts of the gas network. Historically this storage was used to meet demand at peak times. Traditionally, many towns and cities in the UK have gas holders (often called gasometers). These are above ground storage facilities which hold enough gas to meet manage local gas demand within the course of the day (sometimes referred to as 'diurnal storage').

Currently the UK's biggest single gas storage scheme is offshore. This is Centrica's Rough storage facility, a partly depleted gas field off the Norfolk coast.

Recently another type of storage scheme has hit the headlines in the guise of major new gas import and storage projects (i.e. National Grid's LNG terminal on the Isle of Grain and the two big terminals at Milford Haven now being commissioned).

The storage of gas onshore and offshore is only possible in certain areas with the required geology and geological structures. These are present in a limited number of locations in Great Britain. Oil and gas fields are found in North East England, the east Midlands, in the Wessex-Channel basin, west Lancashire and in the Midland valley in Scotland. Suitable salt strata have been identified in the Wessex, Cheshire and West Lancashire basins and along the Yorkshire North Sea coast.

Author: Paul Newton,
Channel: Policy & Regulation
Tags: Gas Import , Gas Storage

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