UK Plans Billions in LNG Import Facility Expansion as North Sea Output Declines

en.Wedoany.com Reported - On August 23, policy discussions in the UK intensified regarding expanding liquefied natural gas (LNG) import and storage capacity. The British government is evaluating measures to enhance supply security through floating storage and regasification units, natural gas storage facilities, and cross-border pipeline upgrades, with related investments potentially reaching billions of pounds.

According to the UK government's interim response to the gas supply security consultation released on August 18, as North Sea output declines, the UK's gas system could face supply risks from 2030 onward under scenarios such as extreme weather or disruptions to import facilities. The government is exploring commercial support for storage facilities, gas interconnector pipelines, and floating storage and regasification units.

The UK Continental Shelf has entered a mature development phase. The UK government's 2025 supply security report projects that domestic offshore gas production will decline at an annual rate of approximately 12%, with imported gas continuing to account for a growing share of the supply mix. The government maintains its policy of not issuing new oil and gas exploration licenses, while planning to support the development of resources adjacent to existing oil and gas facilities through transitional energy certificates, enabling connections to existing infrastructure.

Aberdeen & Grampian Chamber of Commerce argues that expanding LNG import capacity would increase the UK's reliance on overseas supplies and advocates for continuing North Sea oil and gas projects. The organization also calls for the abolition of the Energy Profits Levy. Currently, UK upstream oil and gas companies face a combined nominal tax rate of up to 78% when the Energy Profits Levy and other taxes are stacked.

The controversy centers on two pending projects: Jackdaw and Rosebank. Project developer Adura estimates that the two projects together involve investments of approximately £10.8 billion and, once operational, could contribute around 10% of the UK's domestic gas production. The UK government, however, maintains that the decline in North Sea output is primarily determined by resource maturity, and that new exploration licenses are unlikely to reverse the long-term production decline. Both projects have completed public consultations and still require environmental assessments and regulatory approvals.