UK Oil & Gas PLC Announces Strategic Hydrogen Storage Facility Backed by SGN to Connect with Solent Cluster and National Hydrogen Grid
UK Oil & Gas PLC (London AIM: UKOG)Â is delighted to announce that the Company’s planned strategic Dorset Hydrogen Storage Facility (“Project”), operated by its wholly owned subsidiary UK Energy Storage (“UKEn”), has received a letter of support (“LOS”) from SGN, the operator of the planned H2 Connect hydrogen transmission line, which plans to directly link the Company’s storage with the Solent Cluster and Southern England and, ultimately to the new UK wide hydrogen grid of Project Union. SGN currently operate Southern England and Scotland’s natural gas distribution networks.
SGN’s Regional Development Manager Graham Cox said: “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.
It will enable the end use of hydrogen across industry, heating and transport, help meet growing regional energy demand, and support the transition to net zero emissions.”
This second LOS is thus a further key step for the Company’s planned application for government hydrogen storage Revenue Support (see RNS 29th May 2024), as successful applicants must not only identify potential storage users but must also demonstrate via LOS that its hydrogen storage is being developed in tandem with pipeline connections, so that key enablers of the UK’s new hydrogen system can be delivered simultaneously.
As per the Company’s 29th May RNS, the Department of Energy Security and Net Zero (“DESNZ”) currently plans to open the Allocation Round in Q3 this year.
Whilst UKOG’s proposed Project is at an early engineering design stage and there can be no certainty it will receive government Revenue Support, the Company is committed to furthering this and its other essential strategic UK hydrogen storage projects which will remain as the focus of the Company’s overall future strategy. The Company expects to receive further LOS in due course.
Note: * TWh = Terawatt hours, where 3 TWh is the energy equivalent of approximately 1 billion standard m³ of hydrogen.
Stephen Sanderson UKOG’s Chief Executive commented: “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.”
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