Extension of Gas Storage Development at Aldbrough

Scottish and Southern Energy plc ("SSE") and Statoil (UK) Ltd have secured consent from East Riding of Yorkshire Council to increase the gas storage capacity at the Aldbrough site beyond that currently under development.

The companies are already developing nine storage caverns at Aldbrough, with a capacity of 420 million cubic metres (mcm), and commissioning of the first of them is expected to get under way before the end of this year. It will become the UK's largest onshore gas storage facility.

Subject to the conclusion of an agreement under Section 106 of the Town and Country Planning Act, the companies now have consent to develop a further nine gas storage caverns at Aldbrough, taking the total at the site to 18 and the total capacity to over 800mcm. After the completion of the extension, the facility will be able to provide enough gas in a day to supply around 13 million homes.

SSE is investing around £150m in the first phase of the Aldbrough development, out of a total of around £225m. The extension will largely be under ground, and the intention is to use above ground facilities already on site, although some additional development will be required. It is expected that its cost will be similar to the first phase of the development. SSE will contribute 50% of the cost of the extension in return for ownership of 50% of the capacity.

On completion of the extension, SSE will own over 800mcm of gas storage capacity, including its share of joint ventures. This includes its existing gas storage facility at Hornsea, which is adjacent to Aldbrough and which it acquired in 2002.

Ian Marchant, Chief Executive of SSE, said:

"The Energy White Paper showed that gas storage is a central part of the UK's strategy for handling more imports of gas and so this is a very important business. Construction of the extension will help to ensure that the UK can meet gas demand during periods of high energy usage, and will be a central part of our investment programme going forward."

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Posted 30/05/07

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