Page 13 - EurOil Week 26 2022

EurOil POLICY EurOil

UK looks at allowing lower-calorific

gas into system

UK THE UK is looking to ease rules on the quality of its Cygnus gas field.
natural gas in an effort to incentivise the devel- Back then the proposal was rejected by the
The UK believes the opment of extra North Sea supply, the Telegraph government. But Russia’s invasion of Ukraine
move could lead to the gas reported. that started in late February and subsequent cuts
extraction of an extra The proposal would allow lower-calorific in Russian gas supply to 12 EU countries, have
14.2 bcm of gas. gas to be pumped into the UK’s pipeline system, resulted in record high prices being maintained
meaning it can maximise resource recovery. even through the summer.
Business Secretary Kwasi Kwarteng told a con- Worse-cases scenarios modelled in Whitehall
ference in London over the weekend that the suggest that up to 5mn homes could face power
government was “exploring domestic gas stor- cuts if Russia shuts down gas supplies to Europe
age options carefully,” including “potential regu- completely. The UK only gets about 4% of its
latory options to extract more gas from existing gas from Russia, but there would be a knock-on
fields.” effect if deliveries to other European countries
Industry experts estimate that around 500bn are disrupted.
cubic feet (14.2bn cubic metres) of low-calorific The government is considering a number of
gas located mostly in the south North Sea could proposals to help bring down energy costs and
be exploited if the rules were changed, and tap- safeguard against potential energy shortages.
ping even a small amount of this gas would help The government is also looking to re-open the
alleviate high energy costs for UK businesses and Rough gas storage facility, and open a new coal
households. power plant in Cumbria. But while stressing the
Various North Sea operators have urged the need for extra domestic oil and gas supply in a
government to allow more low-calorific gas to strategy unveiled in spring, the government has
enter into the system. In September last year, also introduced a 25% North Sea windfall tax
Neptune Energy said the change would allow that the industry has warned will significantly
the company to safely produce 13% more gas at curtail investment in new projects. ™

Week 26 30•June•2022 www. NEWSBASE .com P13