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Energy Act 2008

Section 15: Interaction with the petroleum licensing requirements

44.In some cases the storage of gas will require a petroleum licence, under section 3 of the Petroleum Act 1998, as well as a licence under section 4 of the Act. This is because the geological feature in which the gas is stored (for instance, a depleted hydrocarbon field) may itself contain indigenous petroleum. As a result, petroleum will be “produced” when it mixes with gas that is recovered from the store. In the case of other geological features, the amounts of hydrocarbons present may be negligible. This section provides a means whereby the holder of a gas storage licence can be assured that a petroleum licence will not also be necessary. Thus, if the Secretary of State is satisfied that the amount of hydrocarbons present is insignificant (see subsection (4)), a direction may be given under subsection (2) which makes it clear that there is no requirement for a petroleum licence.

45.Subsection (5) requires such a direction to be revoked if circumstances change; but subsection (6) then ensures that the licence holder is allowed a period of grace before the revocation takes effect. A period will be allowed that is sufficient to enable the licence holder to apply for a petroleum licence, or to negotiate to obtain rights under an existing licence.

46.Subsection (7) requires the licence holder to be consulted before a direction is given or revoked.

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