Wholesale UK gas prices spike after Centrica confirms six week gas plant shutdown

Rough by night
Rough: by night

Centrica – which owns both the Scottish Gas and British Gas energy brands – has shut down Britain’s biggest gas storage tank for safety reasons.

Centrica’s Rough storage facility – a former N. Sea gas well 20 miles off the Yorkshire coast – has the capacity to hold more than 70% of the UK’s stored gas.

It will be shut for six weeks until 3 August 2016. Centrica stopped both withdrawal and injection of gas at its Rough gas storage site in Britain after finding an issue in one of its wells.

In March last year, Centrica imposed reductions on how much gas could be stored at Rough as a safety precaution.

“In the course of conducting these works, we have identified an additional issue on one of the wells tested,” Centrica said in a market update late last night.

Confirmation of the shutdown led wholesale British gas prices to spike across the curve. The Winter 16 contract rose more than 8% to 43.86 pence per therm, while the 4Q2016 contract rose more than 5% to 41.6 pence per therm.

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