UK Oil & Gas aims to convert Dorset salt cavern to hydrogen storage facility.
The UK’s storage capacity has been significantly reduced since the Rough facility offshore Yorkshire was mothballed in 2017.
UK Oil & Gas PLC (AIM:UKOG) said it will lease two former Royal Navy sites in Dorset to develop a hydrogen-ready gas storage and green hydrogen generation capability.
The underground salt cavern storage sits beneath the land offering a capacity of 43bn sq ft (1.2bn sq metres).
Building on a prior project on the Isle of Portland by site owner Portland Gas Storage (spun out of Egdon Resources) that never came to fruition, UKOG’s UK Energy Storage (UKEn) subsidiary has agreed to lease the two sites to try and renew planning consent, which was previously won in 2008, and secure necessary development finance.
The aim is to create an energy hub within an active harbour site, with a salt cavern that could house hydrogen or natural gas, which would be linked to the national pipeline transmission system.
UKEn is working with consultant Xodus Group to use established engineering concepts, public record planning submissions, publicly available data and internal studies, with the next steps being the completion of detailed engineering and commercial studies, followed by the preparation and submission of a planning application.
Planning consultants have indicated to the company that the development is expected to qualify as a Nationally Significant Infrastructure Project, which would require planning consent to be sought via an application directly to the planning inspectorate.
Under the 30-year lease agreement with Portland, UKEn will pay annual ground rent, a future gas throughput tariff and related LNG vessel berthing charges.
Completion of the envisioned project would significantly increase the UK’s storage capacity, which has been significantly reduced since Centrica mothballed its Rough facility in 2017.
Stephen Sanderson, UKOG’s chief executive, said the project:
Could both materially strengthen the UK energy system’s resilience to supply and demand shocks, plus provide the foundations for a potentially significant and strategic element of the future green hydrogen economy.
UK Oil & Gas aims to convert Dorset salt cavern to hydrogen storage facility, May 30, 2022
