UK Oil & Gas (UKOG) is working on the Portland Energy-Hub concept centered around hydrogen-ready gas storage and a future green hydrogen generation capability.

On 30 May, UKOG released a statement saying that its wholly-owned subsidiary, UK Energy Storage (UKEn) signed an agreement to lease (A2L) with Portland Port Limited (PPL) covering two sites at the former Royal Navy port in Dorset.

The intent is to develop a planned integrated Energy-Hub, centered around hydrogen-ready gas storage and a future green hydrogen generation capability.

The project is subject to new planning consent and securing necessary development finance.

As agreed between the parties, the Energy-Hub development concept seeks to reinvigorate and build further upon a prior unrealised project by Portland Gas Storage. This project was granted planning consent by Dorset County Council back in 2008. The plan was to situate approximately 43 bcf (1.2 bcm) of underground salt cavern storage beneath PPL’s land.

Using established engineering concepts, public record planning submissions, publicly available data, UKOG internal studies, and technical, engineering and economic modelling advice from Xodus Group, the planned new Energy-Hub is to include the following elements:

• A strategically located hydrogen-ready Energy-Hub within an active harbour site;
• Construction of up to 43 bcf (1.2 bcm) of hydrogen-ready salt cavern storage. If this capacity is achieved it would materially increase the UK’s current reported 61 bcf (1.7 bcm) total working underground gas storage capacity. The hydrogen-ready build also means the site could hold either hydrogen or natural gas from operational inception;
• Salt cavern storage would be linked to the national pipeline transmission system (NTS) via a new planned hydrogen-ready pipeline. As per the prior 2008 project, the new pipeline would be designed with an envisaged capacity designed to be capable of handling up to 1 bcf/day (28 million cbm/day);
• Pilot-scale green hydrogen production and storage, together with hydrogen battery concept investigation.
• Addition of a new planned LNG import facility in the port, designed to optimise cavern-fill cycle times and maximise revenues. The company’s ambition is to source long-term LNG from the USA and other secure suppliers;
• Development planned to be ‘future-proofed’ by engineering designed to transition seamlessly into green hydrogen production and storage;
• A possible local heat network to power green hydrogen production;
• UKOG and PPL will also jointly investigate the potential for using future green hydrogen generation at the port to directly fuel future hydrogen propelled ships. The possibility of future green hydrogen export by ship will also be explored.

The A2L conveys to UKEn the exclusive right to proceed with the development and enter into a 30-year lease. This is in the case that certain conditions are met to UKEn’s satisfaction.

The A2L contains agreed forms of the lease and operating agreements and contains a longstop date which, unless otherwise agreed, will allow UKEn to terminate if the conditions have not been met within four years of the effective date. The lease also grants UKEn the discretionary right at five-yearly intervals to continue or break the lease.

The aggregate total ground rent payable by UKEn up to the A2L longstop date is approximately £0.9 million ($1.1 million).