UK Oil & Gas (UKOG) announced that its wholly owned subsidiary, UK Energy Storage Ltd (UKEn) has signed an Agreement to Lease (A2L) with Portland Port Limited (PPL) covering two sites at the former Royal Navy port in Dorset, with the intent to develop a planned integrated Energy-Hub, centred around hydrogen-ready gas storage and a future green hydrogen generation capability.
As agreed between the parties, UKEn’s planned Energy-Hub development concept seeks to reinvigorate and build further upon a prior unrealised project by Portland Gas Storage, to situate underground salt cavern storage beneath PPL’s land.
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Utilising established engineering concepts, public record planning submissions, publicly available data, UKOG internal studies and technical, engineering and economic modelling advice from Xodus Group (“Xodus”), the planned new Energy-Hub is envisaged to include the following key elements:
- A strategically located hydrogen-ready Energy-Hub within an active harbour site;
- Construction of up to 43 bcf (1.2 bcm) of hydrogen-ready salt cavern storage. For context, if this capacity is ultimately achieved it would materially increase the UK’s current reported 61 bcf (1.7 bcm) total working underground gas storage capacity. The envisaged hydrogen-ready build also means the site could hold either hydrogen or natural gas from operational inception;
- Salt cavern storage would be linked to the national pipeline transmission system (“NTS”) via a new planned hydrogen-ready pipeline. As per the prior 2008 project, the new pipeline would be designed with an envisaged capacity designed to be capable of handling up to 1 bcf/day (28 million m³/day). For context, this throughput capacity, if achieved, would equate to approximately one seventh (14%) of current estimated UK daily natural gas consumption;
- Pilot scale green hydrogen production and storage, together with hydrogen battery concept investigation. The Company and its consultant Xodus plan to develop future potential to supply renewable electricity for green hydrogen production at the site via an over-the-horizon floating wind farm, an area of Xodus expertise;
- Addition of a new planned LNG import facility in the port, designed to optimise cavern-fill cycle times and maximise revenues. The Company’s ambition is to source long-term LNG from the USA and other secure suppliers;
- Development planned to be ‘future-proofed’ by engineering designed to transition seamlessly into green hydrogen production and storage as the ‘hydrogen economy’ evolves;
- Local high geothermal heat gradient to be investigated for possible local heat network and/or to power green hydrogen production;
- The Company and PPL will also jointly investigate the potential for using future green hydrogen generation at the port to directly fuel future hydrogen propelled ships. The possibility of future green hydrogen export by ship will also be explored.
Stephen Sanderson, UKOG’s Chief Executive, commented:
It’s hard to recall a time in recent history in which the critical importance of energy security and the resilience of the UK energy system has been so much in the public and governmental eye
UKOG now intends to complete further detailed engineering and commercial studies, followed by the preparation and submission of a detailed planning application.
