There Are Big Problems With U.K.'s Biggest Gas Store

Bloomberg's Kelly Gilblom looked to our Senior Market Analyst, Guillermo Baena Gomez, for his take on the situation at Rough facility, the biggest gas storage facility in the UK gas system.

If the company decides to close it for financial reasons, U.K. regulators have less reason to intervene this time, according to Guillermo Baena Gomez, a senior market analyst and energy trader at Advantage Utilities Ltd. in London.

The expanding liquefied natural gas market, with supplies by tanker complementing pipelines from Norway and Belgium, mean that the U.K. will be able to balance supply and demand in similar ways to other nations depending on foreign supplies, like Japan, the world’s biggest LNG buyer. The U.K. only uses about a third of its LNG import capacity.

“In the next 10 years, the need for Rough could be minimal and Centrica could make the decision to close the facility on financial grounds,” Gomez said in an email. “And it will be allowed to do so, because the security of supply reliance on Rough will have disappeared.”
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