British Gas owner Centrica plans to spend around £1.2bn converting the Baird gas field in the southern North Sea into the UK’s second largest gas storage facility. It is expected that the project will commence commercial operations in 2013.

The Department of Energy and Climate Change (DECC) issued its first ever gas storage licence to the Gateway project in the east Irish Sea. The 600 million pound ($941.5 million) Gateway storage facility is expected to boost gas storage by 1.5 bcm and increase Britain’s overall capacity by around 30%. The project involves creating 20 new salt caverns under the sea to store the gas, and would connect the storage facility to the existing Barrow gas terminal in northwest England via pipeline.Concerns about Britain’s gas storage were raised after record demand and problems with Norwegian gas flow in January caused energy network operator National Grid to issue system balancing alerts, despite reassurances that there was more than enough supply. Britain has less gas storage capacity compared to other major European countries, due to its role as a gas producer, but as North Sea output declines the country is becoming reliant on imports, causing concerns about energy security.