Centrica plc, the parent company of British Gas, reports its second significant gas storage project this year, the acquisition of Caythorpe Gas Storage Limited (CGSL) from Warwick Energy for £70 million in cash.

CGSL owns the onshore Caythorpe gas producing field near Bridlington in East Yorkshire, which is a substantially depleted onshore gas field located close to the National Transmission System.

Caythorpe has planning permission for conversion to an onshore gas storage facility with a capacity of up to 7.5 billion cubic feet (bcf) of gas. The project would require additional capital investment of around £100 million and could be operational by the winter of 2011/12.

Caythorpe will have a much faster injection and withdrawal rate than Centrica's Rough gas storage facility, which is offshore from Easington.

Sam Laidlaw, chief executive of Centrica, said: "With the UK rapidly becoming more dependent on imported gas, increasing the country's gas storage capacity is an essential element in giving our customers security of supply. Caythorpe adds to Centrica's existing investment programme, giving us more flexibility in our storage portfolio with its faster injection and withdrawal rates."

Caythorpe is the second significant storage investment project to be announced this year by Centrica. In March Centrica, together with its partners, announced a development study aimed at converting the largely depleted Bains gas field, near to Morecambe Bay, into a facility with potentially up to 20bcf of storage capacity. Rough, the UK's biggest gas storage facility with approximately 118bcf of capacity, was acquired by Centrica in 2002.

Tags: Centrica plc, Warwick Energy Limited