Frequently Asked Questions - Benefits

What is the proposed Planning Application for at Preesall and how does it fit in with the Amlwch facility?

Canatxx plans to build and operate an underground gas storage facility near the eastern bank of the Wyre River. The Preesall site will be connected to a Liquefied Natural Gas (LNG) unloading and regasification terminal in Amlwch, Anglesey. It will provide a much needed flexible supply of UK peak demand gas to help domestic consumers, business and industry and power stations meet demand peaks. By comparison France and Germany respectively store about 25% and 22% of their annual gas needs, whilst the UK has gas storage of just 4%.

The Preesall gas storage facility will create new caverns in virgin salt about 300 to 400 meters (1000 to 1300 feet) below the surface, until the combined capacity of the caverns reaches 60 billion cubic feet of natural gas of which 40 billion cubic feet is available to customers, equivalent to four days of the UK's average use. The remaining 20 billion cubic feet of 'cushion gas' will ensure a minimum pressure to maintain cavern stability. The facility will be able to deliver in excess of two billion cubic feet per day to the National Transmission System (NTS).

Canatxx is developing an LNG (Liquid Natural Gas) unloading and regasification terminal in Amlwch, Anglesey. The terminal site was originally built and operated by Shell for the extraction of bromine from seawater and for the unloading of crude oil tankers. Canatxx will operate the facility as an unloading hub for ships carrying LNG from anywhere in the world. The gas can then be transported to the Preesall storage facilities via a 70 mile undersea pipe. The LNG terminal twinned with the salt caverns can make Preesall a storage facility that is capable of storing and replenishing gas stocks throughout the winter or during an emergency. In short these two facilities combined, offer an economical, safe and secure environment to bring gas in to support the UK energy needs. The combination of the LNG terminal and gas storage is unique in the world.

What are the benefits for the local community?

Most of the Preesall land owned by Canatxx is farmed. Recreation activities include rambling, fishing and shooting - we want to ensure this remains the case. It is Canatxx's intention to continue to maintain and enhance the rural nature of the land. Canatxx is working hard to improve the landscape and biodiversity. Aside from minimal over ground structures, it is not our intention to have general commercial or residential developments on our land. In fact, as part of this process, we have already removed the caravan park from our land.

Proven slant hole drilling technology will be used for the salt caverns to ensure the Site of Special Scientific Interest (SSSI) is not disturbed and cause minimal interruption to users of the Wyre Way with the well heads located well away from the foot path.

What are the benefits for UK consumers?

The operating gas pressure of the caverns is in the same range as the NTS pipelines which safely run underground and feed gas throughout the UK. The lack of pressure differential ensures the Preesall facility is very efficient and more environmentally friendly than deeper existing facilities in the UK. The efficient construction and lower operating costs of Preesall will ensure improved competition in the gas storage and supply market.

The Preesall facility will help reduce gas price volatility. It will do this in three ways. Firstly, the Canatxx facilities will be highly effective in their ability to meet the future hourly peaking demands of UK gas users; secondly, because of its linked status with Amlwch it can be resupplied economically and reliably; and finally, it will be able to enhance the operational reliability and flexibility of the NTS pipeline.

Increasing gas storage enables the UK's existing gas infrastructure to be used more effectively. Historically the UK's offshore gas production facilities have operated well below their full capacity because they would only “swing” up to their rated capacity during rare peak periods. Consequently, the UK used expensive offshore production facilities to provide most of its short term swing as opposed to less expensive gas storage used in other countries.

Declining production has reduced, and will eventually eliminate, the ability of the offshore gas production facilities to “swing”. Gas storage is the only viable alternative once the “swing” is lost.

What are the benefits to the UK?

• The storage facilities' location coupled with high flow-rates into and out of the NTS pipeline system provides the means to balance the network during the daily peaks and valleys in energy demand and reduce both the cost of constraints and impact of imbalances due to supply failures and bad weather causing import difficulties.
• Any failure of a gas terminal could create significant deterioration of the gas supply system. System simulation studies have demonstrated that because of Preesall's strategic location it would be capable of avoiding this deterioration, holding the national system in a stable position, and maintaining this for a number of days while the trouble is rectified.
• The Amlwch LNG terminal's offshore location gives added security, against terrorist attack while and most importantly, meeting safety requirements.
• The LNG terminal is capable of replenishing the storage facility at a rate of up to 3 bcf per day, even while the storage facility is delivering gas to the NTS.
• The LNG terminal will be built to accommodate all sizes of LNG carriers from anywhere in the world.
• The facilities bring significant benefits to entice upstream gas producers to sell into the UK market; the storage facility's high injection rates could enable North Sea producers to optimise production rates on declining fields, thereby lengthening their economic life. The reliability of the LNG unloading facility at Amlwch (weather and tide modelling shows a downtime of 6 days a year), together with the large storage capacity, means LNG producers will be consistently able to get cargoes into the UK, thereby saving them time and money.

What is the strategic value of Preesall?

Recent events highlight the precarious nature of the UK's energy infrastructure. Increased gas storage capacity is vital for the UK to maintain security of supply. The combination of scale, speed and location make Preesall the most important land based strategic storage opportunity in the UK. The Preesall facility is also unique because of its linked relationship to Amlwch which can reliably take LNG from anywhere in the world, throughout the winter and in a supply emergency. The linked relationship also dramatically increases the amounts of gas that Preesall can deliver above and beyond its gross storage capacity because it can simultaneously inject gas into the caverns whilst also delivering gas to the NTS.

The primary aim is to ensure the UK is not held hostage to uncertain gas supplies that may or may not be available from Europe during peak demand periods.