UK Rough gas storage site to resume withdrawals by Dec.9-CSL

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By Nina Chestney

LONDON, Nov 29 (Reuters) - Rough gas storage site in Britain, which has seen operations restricted since last year, will resume gas withdrawals by Dec. 9, operator Centrica Storage Limited (CSL (Other OTC: CMXHF - news) ) said late on Tuesday.

Last year, CSL imposed reductions on how much gas could be stored at Rough as a safety precaution after identifying potential issues with well integrity. This June, it stopped both withdrawal and injection of gas.

Britain depends in large part on stored reserves to manage winter demand spikes while domestic stockpiles also help ensure security of energy supplies, so news of the shutdown caused a spike in wholesale gas prices.

"After completion of a major works program, CSL are pleased to announce that work has concluded on the Easington Terminal (Rough). Works are nearing completion offshore," the firm said in a statement.

"CSL now expects Rough will be available for withdrawal operations no later than 05:00 on 9 December 2016," it added.

Rough is currently is 35 percent full with almost 1.3 billion cubic metres of gas in storage, according to Cecile Langevin, analyst at Thomson Reuters (Dusseldorf: TOC.DU - news) .

The storage site could have a maximum withdrawal capacity of 20-25 mcm/day, Langevin said, compared to net withdrawals last winter, which was unseasonably mild, averaged 13 mcm/day.

"There can be some test withdrawals in December, but we think that most of the gas would be withdrawn in January and February, when it gets colder," she added.

British wholesale gas prices for January 2017 were down 1.40 pence at 48.00 pence per therm on Wednesday morning.

"The additional gas from Rough will of course be welcomed but it's not a surprise and it's slightly offset by the halving of capacity on the InterconnectorUK until the end of Feb. 2017 so potentially there will be more call on gas from the power sector," said Wayne Bryan, analyst at Alfa Energy. (Reporting by Nina Chestney and Harshith Aranya in Bengaluru; additional reporting by Nerijus Adomaitis in Oslo, editing by Louise Heavens)