Centrica plc, the parent company of British Gas, has announced its second significant gas storage project this year, the acquisition of Caythorpe Gas Storage Limited (CGSL) from Warwick Energy for £70 million in cash.

CGSL owns the onshore Caythorpe gas producing field near Bridlington in East Yorkshire, which is a substantially depleted onshore gas field located close to the National Transmission System.

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Caythorpe has planning permission for conversion to an onshore gas storage facility with a capacity of up to 7.5 billion cubic feet (bcf) of gas. The project would require additional capital investment of around £100 million and could be operational by the winter of 2011/12.

Caythorpe will have a much faster injection and withdrawal rate than Centrica's Rough gas storage facility, which is offshore from Easington.

Sam Laidlaw, Chief Executive of Centrica, said: "With the UK rapidly becoming more dependent on imported gas, increasing the country's gas storage capacity is an essential element in giving our customers security of supply. Caythorpe adds to Centrica's existing investment programme, giving us more flexibility in our storage portfolio with its faster injection and withdrawal rates."

(CD/JM)