The UK government has issued the first licence to create an offshore gas-storage repository.

The Gateway Project, located in the east Irish Sea, would create 20 salt caverns, each the size of the Albert Hall, to store 1.5 billion standard cubic metres of gas.

Gateway would be built in salt caverns approximately 750m beneath the surface of the seabed and located 15 miles offshore, south west of Barrow-in-Furness.

The Gateway company proposes to connect the facility to the National Gas Transmission System (NTS) via a new pipeline to a gas-compression station adjacent to the existing Morecambe gas terminals at Barrow.

Lord Hunt, energy and climate-change minister, said: ’The successful performance of the UK’s gas system, even during the severely cold weather seen this winter, shows that we have one of the most resilient gas systems in the world. But we do want to encourage more gas-storage capacity, like Gateway, to provide flexibility in the future at times of high demand.’

Gas storage helps the UK’s gas market to meet seasonal and short-term peaks in demand, and to respond to price volatility. In recent years, Centrica’s Rough field has been the UK’s only offshore gas-storage facility and the UK’s largest single facility, but a number of new projects are now being proposed - both onshore and offshore.

George Grant, chairman of the Gateway Storage company said: ’The support and encouragement given by the Department of Energy and Climate Change (DECC) to bring the Gateway Storage project forward through the new consenting process has been invaluable, as was the Crown Estate’s agreement of the offshore site licence. We are now fully engaged with the project’s engineering design and are targeting 2014 for the start of commercial storage operations.’