June 13, 2006 – 13:10
Force Majeure Update on 13 June 2006
Following the incident at the Rough facility on 16 February 2006 Centrica Storage Limited (CSL) continues to update our Customers and Market Participants on the status of the Rough Facility.
As part of the commissioning and testing programme, injection of hydrocarbons through the offshore compressors started on Sunday 11th June 2006. Results for compressor train 2 have shown similar rates to those achieved over previous injection seasons.
However during testing CSL became aware of a vibration problem with compressor train 1. Further inspection this morning (Tuesday 13th June 2006) has revealed the compressor bundle requires replacement in order to ensure safe and reliable injection operation throughout the injection season. The problem with the compressor was not apparent when last used for injection in January 2006, or during detailed inspection in April following the 16th February incident. There was no observed damage either during initial spinning, or when running the machine through its start up sequence to its idle speed. The issue was only apparent when the unit was fully loaded up during testing.
This work will require an outage on compressor train 1 of 14 days during which time injection capacity will continue to be allocated based on single train operation. For information current injection rates from compressor train 2 are around 9.5 mcm/d.
CSL has already commenced the work programme to replace the bundle on compressor train 1. At this time CSL is unable to determine whether the problem necessitating the injection bundle change out originates from the incident at the Rough facility on 16 February 2006. CSL's declaration of Force Majeure within clause 18.1 will remain in full force and effect. Given the uncertainty surrounding the cause of the vibration on compressor train 1 CSL has declared a cancellation factor of 0.55% i.e. 55% of effective capacity will be allocated. In these circumstances CSL will continue to maintain it ' s election within clause 10.4 to pay compensation as an event of Force Majeure for each day until we give you notice otherwise.
Our current analysis suggests that it will be possible to inject at sufficient rates to enable all Rough capacity sold to be filled at or around the traditional end of injection season (i.e. 31st October). Our current best estimate is that full production rates will be available from 1st October 2006 at latest. As before, these estimates remain subject to change.
We will continue to make announcements whenever we have anything significant to report on the status of the Rough Facility or developments as appropriate.
Centrica Storage Limited