Corus warning over winter gas reserves

Industry is urging the energy regulator not to scrap the UK's emergency gas reserve this winter, warning that it could deprive companies of supplies.

Ofgem will decide this week whether to abolish the top-up arrangements. But steel maker Corus, one of the largest end-users of gas in the UK, has warned the regulator: "This is far too late sensibly to abolish top-up even if it were clear that this would be the best approach, which we doubt."

Under current regulations, gas pipeline operator Transco must ensure that there are 67 days' worth of gas in storage in case of emergency. Ofgem wants to lower that minimum and leave it to the market to trade gas to meet the new requirements. It argues that this would be more efficient.

Transco has caused alarm by proposing to identify large gas users, whom it would "physically isolate", or turn off, in case of a shortage. In its submission to Ofgem, Corus said: "This would have a severe impact on large manufacturing sites such as steelworks."

Chemicals company Terra Industries said that if Ofgem did not change existing arrangements, "the first cold snap in November will lead to unnecessary price spikes".

But it was concerned about removing top-up, saying that other measures, such as stopping gas exports through the interconnector pipeline linked to Belgium during peak periods, should be introduced instead to improve security of supply.