Italian oil company Eni will buy Tullow Oil out of the Bacton Terminal sub-stations and Hewett field infrastructure for £210 million ($420 million), in a deal Eni says should lead to offshore gas storage to stabilize U.K. gas prices.

Eni becomes 89-percent owner of the Hewett reservoirs with Tullow’s 52-percent stake. In a statement Eni said the move will lead to an application to run offshore gas storage to help the United Kingdom as the gap grows between local gas demand and imports.

“The level of available storage capacity in the UK is significantly lower than the European average when compared to demand,” a statement said. Bacton lies near the U.K.-Europe Interconnector pipeline and seen as strategic.

The offshore storage facility is expected to be the biggest in United Kingdom and one of the biggest in Europe with its capacity of 5 billion cubic meters.
“Eni expects the development of the Hewett Unit to be highly synergistic with our recently announced acquisition of a majority interest in Belgium's Distrigaz,” management said in a statement.

Sale documents are expected to be signed over the coming weeks.

Tags: Eni Norge AS, Tullow Oil