May 12, 2006 – 12:00
Force Majeure Update on 12 May 2006
Following the incident at the Rough facility on 16 February 2006 Centrica Storage Limited (CSL) is making regular weekly announcements to our Customers and Market Participants as to the status of the Rough facility.
Since our publication of the Interim Report on the 24th April the following milestones have been achieved;
- restored stable power supplies from the permanent platform generators (retaining temporary generators as a backup);
- replaced damaged platform lighting systems which are now fully operational (temporary lighting systems retained for backup);
- re-cabling works nearing completion and not currently on the critical path;
- all damaged structural beams in the vicinity of the cooler failure have been replaced;
- all piping materials procured, scopes defined and installation is progressing on critical path;
- detailed commissioning plan developed and completed ready for implementation.
Our priority and focus remains the safe return of injection to operational status on the 1st June. As we reach the final stages of the restoration of injection services the uncertainties around the date of resumption of injection are reducing. However the restart is subject to a rigorous programme of safety, integrity and functional commissioning activity which satisfies internal technical authorities, the independent competent persons and the Health and Safety Executive that the Rough storage facility has been satisfactorily prepared for re-pressurisation with hydrocarbons. The start date therefore remains subject to, amongst other matters, the success of this testing and re-commissioning activity and required internal and external approvals.
CSL will continue to assess the possible impact of the work done to restore injection operations. Our current analysis suggests that it will be possible to inject at sufficient rates to enable all Rough capacity sold to be filled by the traditional end of the injection season (i.e. end-October 2006). In order to allow Market Participants to understand the projected level of Rough inventory, CSL confirms that 11bcf of Additional Space has been sold for the 2006-7 storage year. The availability (if any) of Further Additional Space will be kept under regular review in the light of the injection performance of Rough.
Our current best estimate of the date of resumption of injection operation remains 1st June 2006. Our current best estimate is that full production rates will be available from 1st October 2006 at latest. As before, both these estimates remain subject to change.
CSL's declaration of Force Majeure within clause 18.1 of the Storage Services Contract ("SSC") remains in full force and effect.
We will continue to make announcements whenever we have anything significant to report on the status of the Rough Facility or developments as appropriate. In line with Customers' and Market Participants' wishes we will also continue making a regular weekly update, even if it is to report "no change". The next announcement will be made on Friday 19th May 2006.