UK Oil & Gas secures second hydrogen storage facility lease in Dorset

UK Oil & Gas PLC (London AIM: UKOG) has announced the signing of a heads of terms agreement through its subsidiary, UK Energy Storage (“UKEn”), for a 60-year lease on land and subsurface mineral rights in South Dorset. This move marks a significant step towards establishing a second underground salt-cavern hydrogen storage facility in the region.

The newly secured site is strategically located above the thickest onshore part of the Dorset Triassic salt deposit and lies in close proximity to SGN’s planned H2 Connect hydrogen pipeline. This pipeline is designed to link the proposed storage caverns directly to the Solent Cluster and the broader Southern UK hydrogen super-cluster, an essential infrastructure development aimed at supporting the UK’s hydrogen energy goals.

Each hydrogen storage site operated by UKEn is expected to provide between 6.5 to 10 terawatt-hours (TWh) of working storage annually. This capacity could meet approximately 10-20% of the UK’s projected hydrogen storage needs by 2050. This aligns with the UK Government’s ambitious target to fully decarbonise the country’s power system by 2030, making these storage facilities a critical component of the nation’s future energy infrastructure.

With the heads of terms agreement in place, UKEn will now proceed to finalize the lease, undertake salt cavern design studies, and begin the necessary preparations for submitting a Nationally Significant Infrastructure Project planning application. The company also intends to apply for government revenue support for at least one of its Dorset sites, further reinforcing its commitment to advancing the UK’s hydrogen storage capabilities.

Stephen Sanderson, Chief Executive of UK Oil & Gas PLC, emphasized the strategic importance of the Dorset site, stating, “UKEn’s new Dorset site is optimally placed to exploit the thickest part of the onshore Dorset Triassic salt deposit, permitting large underground caverns to be emplaced via a modest-sized surface facility. Its proximity to SGN’s H2 Connect pipeline is deliberate and will ensure storage can be directly linked to the planned Solent Cluster and wider Southern UK hydrogen networks.”

Sanderson further expressed confidence in the continued collaboration with the government, which he believes is crucial in meeting the UK’s 2030 power decarbonisation target. The development of these strategic energy infrastructure assets will play a vital role in achieving this goal, paving the way for a sustainable energy future in the UK.