STAR Energy has given a categorical assurance that plans to create a new UK gas storage facility at its Humbly Grove oil field near Alton will not involve the construction of a locally based power station.
In announcing the £50m investment, the company is keen to scotch any rumours that it would be following in the footsteps of ScottishPower who, in 1999, aimed to site a 160-megawatt power station on the A31 at Holybourne. The intention at that time was to use gas stored at Humbly Grove to power the station - but the plan failed to gain approval and was thrown out.
Since then, according to Star Energy UK Onshore Limited managing director Roger Pearson, the energy market has changed. Power prices have fallen due to an over-supply of generating capacity in the UK while, by contrast, the price of gas is rising.
While some power stations have actually been mothballed, the countryÕs indigenous gas supply in the North Sea is dwindling.
ÒIt is a finite resource and there will, in the near future, be insufficient gas to supply the system at times of peak demand,Ó explained Mr Pearson.
The aim, therefore, is to import gas for storage during periods of low demand, so that it can be used to top up the system to meet winter peaks.
The plan will involve building a 17-mile (27.4 kilometre) pipeline linking the existing onshore oilfield at Humbly Grove to the national gas distribution system at Barton Stacey, seven miles north of Winchester.
The project has been developed in response to growing recognition of the need for new gas storage facilities. Experts say that the need for storage will be critical by 2010 and that the UK will otherwise be unable to continue meeting winter peaks in times of high demand Ð this, according to Mr Pearson, could involve importing gas from other countries.
By providing the facility for supply companies to store gas at its Humbly Grove site, Star Energy will benefit in two ways Ð by offering a much needed service and by extending the productive life of its own site.
Having been fully operational since 1986, the indigenous gas present in the Humbly Grove rock formation has dissipated over the years, causing loss of pressure. Restoration of this pressure would greatly enhance oil recovery and could extend the life of the field from seven to around 25 years. In so doing it would maintain the companyÕs £6 million-a-year contribution to the local and regional economies.
As well as securing 45 jobs, the project would be expected to result in an increase of production from 300 barrels to a maximum of 2,500 barrels a day. It would return productivity to late 80s levels when oil piped from Lasham was shipped out by rail from its terminal on the A31 at Holybourne, using up to seven trains a week. Today the company operates just three trains which can, says Mr Pearson, transport around 5,000 barrels a time. The oil is taken from Alton down to the ESSO refinery at Fawley.
While the stretch of line linking Alton to Farnham only currently benefits from single track working, which tends to restrict services, Mr Pearson does not believe increased usage by Star Energy will cause a problem.
ÒWe are not aware of any impact on passenger train schedules,Ó he said.
Changes required at the oilfield would include the installation of new compressors to pump gas through the pipeline into the oil and gas-bearing strata beneath Humbly Grove. New plant would also be needed to dry the gas for return to the network, and a small generator to provide the necessary additional electricity.
These additions would be sited within the companyÕs current landholding at Humbly Grove and would remain within the existing limit for noise levels, said Mr Pearson.
A smaller pipe would also be required to connect the plant to the fieldÕs wellsite A, where the gas would be injected into and retrieved from the field via five new wells.
He added: ÒWe have considered several routes for the pipeline and believe the one we have chosen is the best in terms of minimising impact on the environment and local residents. We have also commissioned a comprehensive environmental assessment to ensure that every impact is fully considered and that the route is quickly and effectively restored.Ó
Mr Pearson said particular attention was being devoted to keeping local people informed. A community newsletter detailing the proposals is currently being delivered to homes along the length of the pipeline and can be viewed online at http://www.starenergy.co">www.starenergy.co. uk. An information line has been set up on 01491.414496
An application has been made to the Department of Trade and Industry for permission for the pipeline and a planning application will be submitted shortly to Hampshire County Council for the associated works at Humbly Grove. Given permission, Star Energy would like to construct the gas pipeline in 2004 with a view to coming on line from April 2005.