Britain’s reliance on foreign imports of gas and coal hit an all-time high last year. And that dependency is set to increase. By 2020, Centrica, the parent company of British Gas, believes the UK will be importing 70% of the gas it needs.
For energy-hungry companies like INEOS, with manufacturing plants in the UK, that’s a major concern and one it can no longer ignore.
INEOS is planning to invest millions in creating opportunities for more underground gas storage facilities in the UK.
The decision – made by INEOS earlier this year – comes at a time of growing concern over spiralling energy costs in the UK, the security of Britain’s energy supplies and the nation’s increasing reliance on foreign imports.
Gas stored in the cavities at the Holford Brinefield in Cheshire will play a part in keeping the lights on in the UK and ultimately keep industrial consumers such as INEOS in business.
The benefits for INEOS, though, will actually be twofold.
“Even without gas storage, cavities would still be formed as they provide the brine that INEOS needs at its two sites in Runcorn,” said Richard Stevenson, Project Manager at INEOS Enterprises. “The proposed development would simply make use of the salt cavities once all the brine has been extracted.”
Controlled solution mining has taken place in the Holford Brinefield since the 1920s. Since that time, over 200 cavities have been safely mined by INEOS and its predecessors.
INEOS ChlorVinyls uses the concentrated salt solution to produce chlorine, which keeps most of the UK’s drinking water safe. INEOS Enterprises’ Salt Business also uses it to produce table salt, water softeners and de-icing salt.
If planning permission is granted, this would be the third gas storage project at the Holford Brinefield and would create an additional 19 gas storage cavities. Today, a significant number of cavities are in use for the production of brine, eleven are operational for gas storage with a further eighteen being developed for gas storage.
The importance of gas storage in the UK should not be underestimated.
Recently the Energy and Climate Change Committee called on the British Government to double the UK’s current gas storage by 2020.
As such, the proposed development at Holford has been classified as a Nationally Significant Infrastructure Project, which means – unlike most planning applications – it will not be decided by the local authority. Instead it requires a Development Consent Order from Ed Davey, the current Secretary of State for Energy & Climate Change.
INEOS and Keuper Gas Storage Limited, a wholly-owned subsidiary of INEOS Enterprises Group Limited, are expected to apply for that order early next year.
It is hoped Mr Davey will make a decision in 2016 so that construction can start the following year. INEOS would then expect to start storing natural gas in the specially-designed underground caverns from 2020.
“This is an important proposal for the UK’s energy security and would provide vital investment and jobs for Cheshire,” said Greg Stewart, INEOS Enterprises’ Operations Director. “It is also a significant investment, which can be delivered without subsidies from the Government.”
In March this year Centrica, the parent company of British Gas, warned that the UK would be importing up to 70% of its gas by 2020.
Chief executive Sam Laidlaw said Britain’s energy security supply risked becoming the ‘forgotten priority’ of European energy policy.
“In the UK an estimated 3.7 Gigawatts of coal-fired generating capacity will be shut down by the end of 2015 as a result of European directives to curb emissions,” he said. “The country’s reserve capacity is forecast to shrink to 4%, increasing the risk of power cuts. Yet no new capacity is being built. The UK’s production of gas is falling rapidly. North Sea oil and gas output has fallen by 38% over the past three years. By 2020 we will be reliant on imports to meet 70% of the country’s gas needs. So when it comes to security of supply, there is a pressing need for solutions.”
For a company like INEOS, which uses as much energy as the city of Liverpool to power its plants in Runcorn, it’s not a forgotten matter. It’s very much a priority.
The UK became a net importer of energy in 2004. In 2010 it was importing 28% of its supply. Last year it rose to 47% with exports at their lowest level since 1980.
Successful development of this project, along with the previous two INEOS supported gas projects in Cheshire, would have a combined ability to deliver up to 40% of the UK’s daily gas storage capability.
“If there were a major supply disruption to the UK, the gas stored on the INEOS Enterprises Brinefield, including this project, could help to keep the lights on in the UK for nearly two weeks,” said Richard.
Gas from the National Transmission System would be stored in the cavities when demand is low, usually during the warmer, summer months. When the demand increases, it will be fed back into the UK’s National Transmission System.
Cheshire is one of the few places in the UK where gas can be safely stored underground due to the geology. The salt stratum is impermeable which means gas cannot pass through it.
For more details log on to www.kgsp.co.uk