3 Min Read
(Adds fields being offline for maintenance, analyst comment)
By Nina Chestney
LONDON, May 3 (Reuters) - British utility Centrica will spend 60 million pounds ($77 million) to unlock an extra natural gas reserves from fields under the East Irish Sea, it said on Wednesday, helping to ease a potential shortage next winter.
The project to produce the extra three billion cubic feet (bcf) will simplify the process to bring gas from offshore to the North Morecambe terminal and start later this month, Centrica said on Wednesday.
It will last for nine months, with the rig campaign completed in February next year, a company spokesman said.
An ongoing outage at Centrica's ageing Rough gas storage site has prompted concerns about tight gas supplies in the coming cold season.
Analysts have said without long-term storage of gas at Rough this coming winter, Britain will have to import more gas from the Continent and Norway and via liquefied natural gas supplies.
"The return of the Morecambe fields after a lengthy maintenance is welcome news to UK gas production," Thomson Reuters gas analyst Oliver Sanderson said. "The impact could be a softening of wholesale prices for Q3, especially as Rough storage is unavailable and exports are expected to be near capacity. For next winter, steady production from Morecambe would help alleviate potential tightness and reduce reliance on more expensive imports," Sanderson said.
Morecambe Bay production is currently around 212 million cubic feet a day, so the addition to daily production will be quite marginal as the 3 bcf will be produced over a long period of time, the spokesman said.
"With nearly 300 billion cubic feet of gas still in place under the East Irish Sea, major projects like this will help ensure we maximise the potential of these fields and continue supplying gas for UK homes and businesses," Tamsin Lishman, Morecambe Bay director for Centrica's Exploration & Production business, said.
There is currently a period of planned maintenance both offshore and onshore at Centrica's North Morecambe gas terminals, which is due to finish at the end of this month.
There is another period of maintenance scheduled for June 1 to July 27, however.
The Morecambe fields were operating last winter but Britain still had to import record levels via Belgium, Sanderson added. ($1 = 0.7738 pounds) (Reporting by Nina Chestney; Editing by Susan Fenton and Susan Thomas)