Centrica's facility in Yorkshire was mothballed in 2017 when the government refused to subsidise it. The government may now be prepared to contribute to re-establishing a strategic gas reserve. The talks are going on as a part of plans for a "reasonable worst case scenario" in which Russia shuts off all gas supplies to Europe resulting in Norwegian gas supplies being redirected from the UK to Europe.
These plans also include extending the life of the few remaining coal fired power plants in the UK.
UK Business Secretary Kwasi Kwarteng wrote to the owners EDF, Drax and Uniper instructing National Grid's Electricity System Operator to explore what would be needed to extend production.
While the EU relies on Russia for 40% of its gas supplies, the UK gets a very small amount from natural gas from Russia but is reliant on Norway for a third of supplies.
There are concerns that if Russia cuts off supplies to the European Union or the bloc boycotts supplies because of the Kremlin's attack on Ukraine, Norwegian supplies might be diverted. In fact, there has been a glut of liquefied natural gas arriving in the UK in recent weeks as suppliers use
the UK's terminals as a hub for deliveries to Europe. Tankers have been turned away as there is nowhere to store it.
At full capacity, Centrica's facility in Rough, Yorkshire can store between 10 and 12 days' worth of the UK's gas needs. Industry experts say that if they started work now, it might be able to hold up to six days' worth of the UK gas demand by this winter. It was shut five years ago when Centrica told the government that the £2 to 3 bn worth of investment needed to extend its life made no economic sense to a private company.
Government minister Chris Philp described the contingency plans as "a sensible precautionary measure given that the gas supply coming out of Russia and Ukraine is, for obvious reasons, so heavily disrupted and we do, of course, use quite a lot of gas to generate electricity."
