The reopening of Rough is a line in the sand for O’Shea, who has championed owning energy generation assets over simply being a retail supplier since taking charge in April 2020, reversing former boss Iain Conn’s strategy.as to why Britain has so little gas storage, and why ministers allowed Rough to halt its storage activities. Centrica had decided in 2017 that substantial investment was needed to make it safe at high pressures, with government support, to make it last a further 40 years.
Storage sites make money by taking in gas when prices are low, typically in the summer, and pumping it back out when prices are high. But the fall in gas prices in recent weeks has meant Centrica has been able to refill relatively cheaply. Investec analysts estimate reopening Rough could be worth as much as £5m a day.
Rough sits below the resource-rich southern North Sea, where rigs routinely compete with windfarms and fishing boats for space. The sea is 36m deep, and Rough is 3km below that. A 30km-square reservoir under sandstone, it is twice the size of Lake Windemere. It is connected to pipelines via 24 ever-narrowing straws. On the surface is a rig capable of housing more than 100 workers.
Despite Britain’s drive to wean itself off fossil fuels, it is viewed as a giant insurance policy for the energy network. Executives argue its mere presence as part of the gas network “takes the froth” off prices. Centrica says it could have saved customers £2.4bn, or £88 each, last winter had it been active then.
The FTSE 100 firm has funded this winter’s call to action, but O’Shea wants government support to secure its future. He estimates it would cost £150m to double its capacity to 60bn cubic feet by next winter. Longer-term, £1bn is needed to ramp up its methane capacity, and £2bn to fit the toughened steel needed for what Centrica hopes will be its next stage of life: the world’s largest hydrogen storage facility.