Centrica puts East Yorkshire project on hold
CENTRICA has decided to put its project at Caythorpe in East Yorkshire on hold indefinitely, it announced this morning.
Caythorpe is a depleted onshore gas field in Bridlington and gas supplier Centrica acquired a 100% interest in the gas storage project from Warwick Energy in September 2008.
It has also decided not to proceed with its new-build gas storage project at Baird in the UK Southern North Sea.
Centrica, the parent company of British Gas, said the decisions have been taken in light of weak economics for storage projects and the announcement by the UK Government earlier this month ruling out intervention in the market to encourage additional gas storage capacity to be built.
The business said it will write off all costs incurred and committed on these projects and expects to recognise impairments and provisions totalling approximately £240m as an exceptional cost in the group’s 2013 preliminary financial results.
Centrica said that over time, with the volatility in gas prices expected to increase due to higher levels of intermittent power generation, fast cycle storage may become more attractive.
