The leasing process

We manage the UK seabed out to the 12 nautical mile territorial sea limit and hold the rights for gas storage within the Exclusive Economic Zone Order 2013, which extends out onto the Continental Shelf. 

For storage in a subsurface feature that is not subject to a current petroleum production licence (either a salt cavern or abandoned hydrocarbon field), our grant of rights will be subject to competition requirements. This is likely to require an open, transparent and potentially competitive process, although these requirements will be assessed on a regular basis.

In the case of a depleted hydrocarbon field subject to a current petroleum licence, DECC will have run a competitive oil and gas licensing round which removes the need for us to undertake a further tender process.

We anticipate that a developer will enter into an Agreement for Lease (AfL) which will cover the period during exploration, appraisal and consenting for the gas storage project. The AfL will be conditional upon the developer having obtained a gas storage licence under section 4 of the 2008 Energy Act by a specified date. The appropriate full lease may be entered into once all required consents (including an approved gas storage development plan) have been obtained.