Britain's gas storage levels are worryingly low, Centrica says

By Susanna Twidale

LONDON (Reuters) -Britain's gas storage levels are worryingly low, with less than a week's worth of gas in storage after a cold snap, energy company Centrica said on Friday while the government said there was no need for concern.

Much of Britain has been hit by cold weather and snow this week, ramping up demand for gas, which heats about 75% of the country's homes.

The cold weather has also been accompanied by low wind speeds, reducing output from the country's wind farms and increasing demand for gas from power plants to produce electricity.

“As of the 9th of January 2025, UK storage sites are 26% lower than last year’s inventory at the same time, leaving them around half full. This means the UK has less than a week of gas demand in store,” Centrica, operator of the country’s largest gas storage site and owner of energy supplier British Gas, said in a statement.

Britain's Department for Energy Security (DESNZ) said it had no concerns about the country's energy supplies.

"(We) are confident we will have a sufficient gas supply and electricity capacity to meet demand this winter, due to our diverse and resilient energy system," a DESNZ spokesperson said in an email.

Britain obtains the majority of its gas via pipelines to Norway, the UK Continental Shelf, including the North Sea, and from shipments of liquefied natural gas (LNG).

Supply through pipelines is stable while eight LNG tankers are scheduled to arrive by the end of the month, LSEG data showed.

"The overall picture across Great Britain’s eight main gas storage sites remains healthy - with average levels at just over 60% across the board," a spokesperson for National Gas, owned by Macquarie Asset Management and responsible for the country's gas networks, said via email.

Gas in storage is used to bolster supply when demand is high and help to moderate price swings.

Unlike the European Union, Britain does not have a mandatory gas storage target, which the EU set after price spikes and supply fears during the energy crisis.

“We are an outlier from the rest of Europe when it comes to the role of storage in our energy system and we are now seeing the implications of that,” Centrica Chief Executive Chris O'Shea said.

Centrica’s Rough gas storage site, a depleted field off England's east coast, accounts for about half of the country’s gas storage capacity. Rough stopped storing gas in 2017 but was reopened in 2022 at lower capacity because of the global energy crisis that followed Russia’s invasion of Ukraine.

The company said it could invest 2 billion pounds ($2.46 billion) to upgrade the site to maximum capacity but is seeking support from the government through a price cap and floor mechanism to make this viable.

($1 = 0.8137 pounds)

(Reporting by Susanna TwidaleEditing by Louise Heavens, David Goodman, Kirsten Donovan)