UK Oil & Gas Announces Strategic Hydrogen Storage Facility Backed by SGN

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UK Oil and Gas PLC recently announced significant progress on its planned strategic Dorset Hydrogen Storage Facility, operated by its wholly-owned subsidiary UK Energy Storage (UKEn). This project has garnered a letter of support from SGN, the operator behind the forthcoming H2 Connect hydrogen transmission line. This line aims to directly link UKOG’s storage facility with the Solent Cluster and Southern England, eventually integrating into the nationwide hydrogen grid envisioned by Project Union.

SGN, renowned for operating Southern England and Scotland's natural gas distribution networks, views hydrogen as pivotal in the decarbonisation of the national energy system. Graham Cox, SGN's Regional Development Manager, expressed strong support for UKEn's initiative, stating, "We believe hydrogen has a key role in decarbonising the national energy system and support UKEn's proposed hydrogen storage facility in Dorset. This project has the potential to store 3TWh of hydrogen in subsurface constructed salt caverns and is essential to decarbonising the Solent Cluster and Southern England. This hydrogen storage will provide inter-seasonal capacity, security of supply, and pipeline stability for our proposed development of hydrogen pipelines in the region."

The Dorset Hydrogen Storage Facility, with its substantial storage capacity, is expected to bolster the use of hydrogen across various sectors including industry, heating, and transport. It aims to meet the growing regional energy demand and support the transition to net zero emissions.

This letter of support marks a crucial milestone for UKOG as it prepares to apply for government hydrogen storage Revenue Support. Successful applicants must demonstrate potential storage users and confirm that their hydrogen storage development is synchronised with pipeline connections. This ensures that the essential components of the UK's emerging hydrogen infrastructure are developed concurrently.

According to a company release on May 29, 2024, the Department of Energy Security and Net Zero (DESNZ) plans to open the Allocation Round in the third quarter of this year. While the Dorset project is still in the early engineering design stage, UKOG is committed to advancing this and other strategic hydrogen storage projects that align with the company’s long-term strategy.

Stephen Sanderson, UKOG's Chief Executive, remarked, "It is a further key step for our Dorset hydrogen storage project that SGN, the hydrogen pipeline operator, recognise the project as essential for decarbonising the Solent Cluster and Southern England. The LOS and mutually advantageous joint cooperation will be essential for our application in the first government hydrogen storage Allocation Round, as it will provide DESNZ the necessary comfort that storage and pipelines can be delivered in tandem to enable the new hydrogen system to function."

As the company moves forward, it anticipates receiving additional letters of support, reinforcing the strategic importance and feasibility of its hydrogen storage initiatives.

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