Italian energy group Eni is paying £210m to take control of a North Sea field which it plans to turn into Britain’s biggest gas storage facility. Eni is buying Tullow Oil’s 52% stake in the Hewett Unit field, taking its overall stake to 89%. The deal comes as the latest estimates on energy supplies for next winter highlight the importance of gas storage in meeting the UK’s energy needs. The Hewett field is strategically close to the Bacton terminal, a key access point for bringing gas into the UK and Eni is planning to turn it into a storage facility which would be capable of holding up to 5bn cubic metres of gas by 2013. According to Eni, that would double Britain’s existing gas supply and represent more than 5% of annual gas demand. Gas storage has become an important part of energy policy as the UK becomes increasingly dependent on imports as North Sea output has declined. Storage facilities allow companies to buy gas in the summer months when demand is less and prices weaker, for sale during the winter. There has been concern within the industry that Britain lags well behind other European countries in storage capacity – a legacy of the era when Britain was able to rely on the North Sea to cope with any change in demand. Industry regulator Ofgem said: “If the Hewett gas storage project goes ahead it will more than double Britain’s long-term gas storage capacity and will be a welcome development … there is over 2bn cubic metres of gas storage under development, which should be ready by 2012.” Ofgem published the National Grid’s preliminary consultation on the availability of gas and electricity supplies next winter. According to National Grid, electricity supplies will be able to meet market demand with a spare capacity margin of 26.8% – higher than in recent winters.

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