Centrica abandons North Sea gas storage project

Scottish Gas owner Centrica today said it expects to incur about £240 million in write-offs after abandoning a project to build a gas storage facility in the North Sea.

As well as pulling the plug on Baird – a largely depleted gas field in the southern North Sea – Centrica has puts its onshore project at Caythorpe in East Yorkshire on hold “indefinitely”.

Centrica said: “This decision was taken in light of weak economics for storage projects and the announcement by the UK government on 4 September ruling out intervention in the market to encourage additional gas storage capacity to be built.

“As a result of this decision, Centrica will write off all costs incurred and committed on these projects and expects to recognise impairments and provisions totalling approximately £240m as an exceptional cost in the group’s 2013 preliminary financial results.”