CMA reviews Rough gas storage facility undertakings

Competition and Markets Authority

October 17
11:00 2017

Rough is a gas field in the North Sea used to store gas in the summer and deliver it in winter when the gas is needed to help meet high demand.

In June, Centrica plc (Centrica) announced that it intended to close the gas storage facility due to the physical deterioration of the facility which has come to the end of its design life. The closure can only happen if current undertakings required by the Competition and Markets Authority (CMA) have been removed. This led to Centrica and Centrica Storage Ltd (CSL) the operator of Rough requesting a review of its undertakings.

The undertakings, put in place in 2003 and most recently amended by the CMA in 2016, include a requirement to keep CSL, legally, financially and physically separate from its parent company Centrica, and to prevent CSL from discriminating in favour of Centrica or other users of Rough.

They also include an obligation for CSL to sell a specific amount of capacity before the start of each storage year, limiting the amount which can be supplied to Centrica and enabling Ofgem to vary the amount of capacity Centrica is required to offer for sale.

The CMA panel members who will act as decision-makers in the review are: Martin Cave, Jayne Scott, Jon Stern and Anne Fletcher. The CMA anticipates that the review will be completed before the end of 2017.

Further details, including Centrica and CSLs request to remove the undertakings can be found on the case page. An administrative timetable will be published shortly.

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