'High rents' could discourage energy suppliers' investment in gas storage - 06/11/2009
A scheme that could produce lower business energy rates by converting the UK's Hewett gas field in the North Sea into a gas storage facility is under threat from high Crown Estate rents, reports the Times.
According to the paper, the efforts of Italian oil company ENI to double the UK's gas storage facilities are facing difficulties due to high prices being charged by the estate, which owns the seabed up to 12 miles from the shoreline.
Britain currently has among the lowest gas storage in Europe, potentially exposing it to fluctuations in imported gas prices, but efforts are underway to improve the situation.
Roddy Monroe, chairman of the Gas Storage Operators Group, which represents ENI and other major suppliers, told the paper: "The Crown Estate is effectively a monopoly. If you want to develop a storage site, their position is simple: 'We are going to charge you an arm and a leg'."
The reliability of imported gas supplies has been questioned recently since Russia cut off Ukraine for a period of weeks in January after a long-running billing dispute.
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