Energy tycoon fires up UK gas storage project
An Irish energy tycoon has revealed plans to build a new gas storage site in the Irish Sea that would boost the UK’s capacity by over 50 per cent.
Tony O’Reilly Jr’s Dcarbonx, which is backed by gas infrastructure behemoth Snam, wants to redevelop a former gas site off the coast of Barrow-in-Furness as part of an £830m megaproject that it claims would address the “mounting national security risk”.
O’Reilly, who is the son of the billionaire former Heinz boss of the same name, said the project would help insulate the UK’s grid from the intermittency of renewables and sudden fluctuations in natural gas prices.
“Without domestic gas storage, the UK is exposed to global gas market volatility, especially during winter,” he said. “The question isn’t whether we need more storage, it’s whether we’re serious about building it.”
The announcement precedes an expected government consultation on Britain’s ‘gas system resilience’, which will seek to examine the country’s storage requirements with natural gas likely to remain an integral part of the UK’s energy mix.
It provided 29 per cent of the UK’s energy demand in 2024, a slight reduction from its recent peak of 38 per cent in 2022.
UK has lowest gas storage capacity in G7
Morning Wire understands the proposal will seek views on whether the government should help prop up gas storage projects, which tend to incur vast upkeep costs.
But according to Dcarbonx, Britain can currently only stockpile 12 days’ worth of average winter gas demand, the lowest gas storage capacity of any G7 economy despite our outsized reliance on the fuel. The average across other major European countries is 90 days.
The firm’s proposed North Sea facility, which was run by British Gas as a extraction site before being decommissioned 2018, would be capable of storing 1.4bn cubic metres of gas, roughly enough to meet an extra six days of average demand, it said.
O’Reilly added: “The UK doesn’t just have a market gap – it has a strategic risk.
“Gas is no longer just a commodity; it is the key transition fuel and an insurance policy for stable growth.”
Dcarbonx, which specialises in gas and hydrogen energy storage, said the site could be operational within five years, subject to regulatory approval and investor appetite.
The proposal has also teed up a fresh bout of competition between O’Reilly’s little-known British-Irish group and British Gas-owner Centrica, which operates the Rough storage site off the North Sea coast.
The site, which the London-listed energy provider recommissioned in the wake of the 2022 energy shock, provides the majority of the UK’s gas storage.
But Centrica expects its Rough site to shoulder an adjusted operating loss of between £50m and £100m this year, a figure which boss Chris O’Shea has branded unsustainable without government support.
O’Reilly told The Times that Dcarbonx’s proposal was a “totally different economic proposition” to the Centrica-run facility.
A spokesman for the Department for Energy Security and Net Zero, which would have to approve the proposal, said: ““Our clean power mission is about improving our long-term national energy security by replacing our dependence on fossil fuel markets with clean homegrown power that we control.
“Our varied sources of gas supply means that the UK is less reliant on gas storage than some other European countries, but we remain open to discussing proposals on gas storage sites, as long as it provides value for money for taxpayers.”