Centrica gains approval to convert some cushion gas from Rough storage site

(Adds detail from Centrica (Frankfurt: A0DK6K - news) )

By Nina Chestney

LONDON, Sept 26 (Reuters) - British energy supplier Centrica (Amsterdam: CC8.AS - news) has been granted permission by the country's oil and gas regulator to convert some so-called cushion gas into working gas from the Rough storage site it has decided to close.

Centrica applied to the Oil and Gas Authority in June to produce up to 0.868 billion cubic metres (bcm), or 30.7 billion cubic feet (bcf), of gas and associated liquids to maintain the integrity of the site and reduce pressure in the reservoir.

This is almost a fifth of the total cushion gas at the site, estimated at about 180 bcf.

Cushion gas is the minimum volume of gas required in an underground storage reservoir to provide the necessary pressure to deliver working gas volumes to customers.

Rough is Britain's largest natural gas storage site but at more than 30 years old has suffered from prolonged outages because of issues with the integrity of its wells.

Centrica Storage Limited (CSL (Other OTC: CMXHF - news) ) said it had received consent to operate the Rough storage site at between 115 billion cubic feet (bcf) and -80.7 bcf.

"This enables CSL to convert 30.7 bcf of cushion gas into working gas, equivalent to 9,463,611,111 kWh (kilowatt hours)," the company said in a statement.

Following a review of stock data, CSL said an additional 176,779,262 kWh will be included in Rough's reservoir stock.

"CSL will, with effect from today, report an increase in its stock in Rough by 9,640,390,373 kWh," it added.

Earlier on Tuesday a Centrica spokesman said that withdrawal of the gas will start when maintenance at the site ends in early October.

All of the 30.7 bcf of gas is expected to be withdrawn by the end of March 2018, he added.

Separately, Centrica has applied to the Competition and Markets Authority and the government to end permanently Rough's status as a storage facility and to produce all the recoverable cushion gas from the field. (Additional reporting by Susanna Twidale; Editing by Jane Merriman and David Goodman)