27 July 2005 – E.ON UK is to build one of the UK’s largest underground gas storage facilities after it acquired a company from ScottishPower that had gained full planning permission to develop the site.
E.ON paid ScottishPower €140m ($168m) for Holford Gas Storage Limited, a company formed with the sole intention of building the storage facility in Cheshire, northwest England. E.ON UK will spend a further €145m over the next four year to develop the project.
E.ON CEO, Wulf Bernotat, said: “As its domestic production declines, the UK will soon become a net importer of gas. We’re responding to the change in market conditions by expanding our gas storage capacity, thereby making an important contribution to security of supply in the UK.”
Bernotat also said the facility would enable E.ON to react more effectively to fluctuations in demand, giving it greater flexibility in gas procurement.
E.ON UK will begin work on the project’s infrastructure next month and work to create the caverns for storing gas will start mid 2006. The first phase of the storage capacity is expected to be operational by the end of 2008, with the entire 165 million cubic metres coming on stream in 2009 and 2010. The facility will hold enough gas to meet half of the UK’s daily demand.