22nd Sep 2015 11:50
LONDON (Alliance News) - The Competition and Markets Authority Tuesday said it is considering changing the undertakings that need to be completed by Centrica PLC in relation to its acquisition of the Rough gas field in the UK North Sea.
Centrica, which also owns British Gas, acquired the Rough gas field in the North Sea back in 2002. The field is used to store gas in the summer and deliver it in winter when the gas is needed to help meet higher demand.
As part of that acquisition, Centrica offered undertakings in order to get the deal approved. One of the undertakings included having to keep the subsidiary which owns the field, Centrica Storage Ltd, legally, financially and physically separate from Centrica PLC.
The other main undertaking offered by Centrica was to prevent Centria Storage from discriminating in favour of Centrica or other users of the Rough gas field.
Centrica Storage was also required to sell a specific amount of capacity before the start of each storage year and restrict the amount that could be supplied to its parent company.
However, on Tuesday the CMA said Centrica Storage has asked for the undertakings to be altered because the Rough gas field is now an "ageing asset", meaning the field's performance is more likely to vary in the future, increasing the chance that it may not meet its sales obligations.
No details on what changes have been proposed were released.
"Centrica Storage has asked the CMA to vary the undertakings to allow for Rough's changing physical capabilities," said the anti-trust regulator. "Given Centrica Storage's request, the CMA is inviting comments in writing by October 12, 2015 from any interested parties on whether to review the Rough undertakings."
Separately, the CMA said Centrica Storage has asked it to not penalise the company if it fails to meet its capacity obligations for the period between 2016 and 2017 because it plans to conduct well tests to address concerns about well integrity.
The CMA said, based on the information received from Centrica Sotrage so far, that it would "be unlikely to prioritise such action".
Centrica shares were down 0.5% to 225.10 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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