Lower quality gas to be pumped into households to boost energy security
Lower quality gas will be pumped into Britain’s homes to help boost North Sea production and ease the energy crisis.
Officials have agreed to relax rules so that gas with a lower calorific value can be allowed into the transmission system to be mixed with other supplies.
It should enable drillers to extract some gas which is otherwise left in the ground, although the measure will not be enacted until April 2025.
A spokesman for the department for energy security and net zero said the move was “a positive change contributing towards the UK's energy independence”.
Leading North Sea producer Neptune Energy started calling for the change in late 2021 as gas prices started to climb amid global shortages.
Prices surged again following Russia’s invasion of Ukraine in February 2022, triggering the ongoing cost-of-living crisis.
Neptune Energy said in late 2021 that it could have produced 13pc more gas from its Cygnus field over the previous 12 months if the rule change had been in place.
Alan Muirhead, Neptune Energy’s UK country director, said it will “remove decades-old constraints on the energy industry”.
He added: “It will enable Neptune to export more gas from our operated Cygnus gas facility in the UK southern North Sea, which is capable of supplying 6pc of the UK’s gas demand – enough to heat two million homes.
“Moreover, it sends a positive signal to UK gas producers, encouraging infrastructure investments that can unlock additional gas supplies in the future.”
Neptune added the move "brings the UK in line with many other countries in Europe with high gas demand, including Germany, the Netherlands and Poland".
A spokesman for the Health and Safety Executive said: “We assessed the potential to widen the gas specification and we are satisfied that the changes can be made without adverse impacts on health and safety of users.” Households are not expected to notice the difference.
North Sea production is at a delicate stage, with several companies warning that windfall taxes introduced by the government to help households with high energy bills will deter them from investing.
London-listed Enquest on Friday said it would delay publishing its financial results for two weeks to make sure they reflect the impact of the new tax rate, which has climbed from 40pc to 75pc.
In a trading statement in February, Enquest said it was delaying drilling at its flagship Kraken field due to the tax.
However, it also said it had made record free cash flow during 2022 and had managed to cut its debt to around $700m.
It comes as votes closed on Friday in a ballot for strike action among 700 Unite members at oil-rig contractor Bilfinger.