18th October 2017 | Posted by: Daniel Birkett | Market Analysis

Centrica have requested that the CMA review the requirements placed on the Rough gas storage facility in order to proceed with its shutdown.

Centrica, the owners of the Rough gas storage facility have requested that the Competition and Markets Authority (CMA) review the current requirements placed on the site.

Located in the North Sea, Rough is the largest storage site in the UK, holding gas reserves in the summer to help meet high demand in the winter period. However, Centrica announced in June that Rough was to be closed as its condition has deteriorated due to its age and it has reached the end of its design life.

In order to close the site any current undertakings required by the CMA have to be removed. Because of this, Centrica and Centrica Storage Ltd (CSL) who operate Rough have requested that the requirements are reviewed.

The current undertakings were established in 2003 but amended in 2016, as part of the amendment, CSL was required to completely separate from its parent company, Centrica to prevent any favouritism to Centrica or any other user of Rough’s gas supplies.

CSL are also obliged to sell a certain amount of capacity before each storage year begins, reducing the amount which can be sold to Centrica; this allows Ofgem to dictate the amount of storage capacity Centrica is required to make available for sale.

Click here to read more about Centrica’s reasoning behind the shutdown of the Rough facility.

The review will be carried out by a CMA members; Martin Cave, Jayne Scott, Jon Stern and Anne Fletcher and is expected to be concluded before the end 2017.