UK must expand gas storage for security -think tank

By Michael Kahn

LONDON, June 23 (Reuters) - Britain needs to pump up investment in gas storage facilities because increased dependence on imports poses a serious threat to the nation's security, a think tank said on Tuesday.

Higher dependence on gas supplies from mainland Europe will also leave Britain vulnerable to the manipulation of energy for political purposes, the Institute for Public Policy Research said it will warn in a final report to be issued next week.

The think tank -- whose findings cited tensions between gas producer Russia and transit state Ukraine as a major risk -- will publish the two-year review next week to coincide with an expected government report on a national security strategy.

"Our national circumstances have changed radically in supply terms in recent years, bringing new risks," said Paddy Ashdown, former head of Britain's Liberal Democratic Party, who co-chaired the panel that compiled the report.

"We need to build strategic gas storage capacity as a matter of urgency, while bringing on stream new technologies that are both climate friendly and can make us more energy independent and resilient," Ashdown said in a statement.

Britain has the lowest amount of storage capacity as a share of its total demand of any major European economy, leaving the nation increasingly exposed to supply disruptions from other countries as its own gas production declines.

In April, British tax authorities agreed to calls from gas storage operator Centrica (CNA.L: Quote, Profile, Research) -- which runs the country's biggest storage facility -- for tax relief to spur investment in new facilities and boost energy security.

The commission -- also co-chaired by former defence minister and NATO secretary general George Robertson -- will urge the government to consider using public funds to boost gas storage capacity and set targets for the amount of additional supplies needed as well as a timetable for delivering them.