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UK government gives approval for natural gas storage facility

The UK government has finally woken up to the gas supply issues which have become so prominent in the UK over the last few weeks. It has been revealed that "tentative" approval has been given for the construction of a £600 million natural gas storage facility in the UK. While this is obviously a very positive step on the road to replenishing and securing the UK gas supply of the future there will need to be further investment in this area in the short to medium term.

The underground facility in question is by far and away the largest project of its kind in recent times and when fully developed is expected to increase UK gas storage capacity by 30% although we won't see the full benefits until 2014. There are hopes that further investment in the gas storage sector by the authorities and the private sector will reduce the volatility of the gas supply market in the UK and reduce the number of "price spikes" we have seen of late.

There is no doubt that the UK energy industry has created significant profits over the last 20 years but it is becoming more and more apparent that a lack of investment is affecting the medium to longer term prospects for the sector.

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