Centrica's East Yorkshire gas storage project on hold
Plans for an onshore gas storage facility in East Yorkshire by the British Gas owner, Centrica, have been put on hold.
The company said a lack of clarity over regulator Ofgem's access rights rules meant they were not in a position to proceed with the project at present.
Centrica bought the site near Bridlington from Warwick Energy for £70m in 2008.
Ofgem said a consultation over access rights may be held later this year.
At the time of the acquisition, Centrica said the Caythorpe project would have a possible capacity of 7.5 billion cubic feet of gas.
Centrica's announcement about the facility was made on Wednesday, the same days as its subsidiary, British Gas revealed it had made operating profits of £585m for the first half of 2010, up 98% on the same period last year.
Centrica's finance director Nick Luff said: "We had been led to believe that we would get an exemption on third-party access rules, but more recently Ofgem have told us that they are minded to consult on that.
"As a result of the regulatory uncertainty this creates for the project, we have decided not to proceed at the current time," the company added in its latest results statement.
Centrica currently owns Britain's biggest gas storage site, the Rough field, which is about 18 miles off the East Yorkshire coast.
An Ofgem spokesman said Warwick Energy had originally been given exclusive access rights to the facility, but these rights were now being reconsidered.
He said they would give Centrica the chance to voluntarily revoke these exclusive rights, but if this did not happen, then a full consultation with industry members would take place.