Solution-mining at all eight caverns at E.ON's Holford gas storage facility in Cheshire has begun.

Work on the final cavern has begun, marking another important milestone in the project which will help to ensure E.ON can keep homes warm and lights on at an affordable price.

The solution mining, or leaching, process sees seven billion gallons of water pumped into salt deposits underground to create eight massive underground caverns that will eventually be used for gas storage.

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Once complete, the facility will have the capacity to store up to 165 million cubic metres of gas - equivalent to around half of the UK's average daily gas demand.

Dr Paul Golby, Chief Executive of E.ON UK said: "We're delighted to have reached this milestone in a project which will play a key role in helping to ensure security of gas supplies, while also providing some protection for our customers against the extreme price volatility of natural gas.

"We're very aware that our customers have seen large price increases in recent months and it's only by investing hundreds of millions of pounds in projects such as this that we can hope to keep energy as affordable as possible."

The caverns will be developed over a period of five years and will all undergo an extensive programme of testing before commissioning. The first three caverns are expected to be ready for use in 2011.

(CD)