UK Oil & Gas PLC (AIM: UKOG) has signed a lease agreement for its second hydrogen storage site in Dorset.
The company announced on Wednesday that a 60-year heads-of-terms deal covering the lease of land and subsurface mineral rights has been finalised through its subsidiary, UK Energy Storage.
Stephen Sanderson, the Company’s Chief Executive, commented:
“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.
Located near SGN’s planned hydrogen pipeline, the site will be directly connected to regional distribution networks, Sanderson added.
UK Oil & Gas stated that the next steps involve finalizing the agreement and completing design studies before submitting a Nationally Significant Infrastructure Project planning application.
The company also plans to apply for government revenue support for at least one of its Dorset sites.
UK Oil & Gas aims to provide between 6.5 and 10 terawatt-hours of storage at each site, potentially meeting up to 20% of the UK’s projected hydrogen storage demand by 2050.
“We look forward to continued collaboration with the government to develop these strategic UK energy infrastructure assets and help achieve the 2030 UK power decarbonisation target,” Sanderson said.
