Crown Estate Threat to Key Energy Plan; Gas Chiefs Furious over 'Arrogant and Excessive' Demands for Seabed Storage; Gas Chiefs' Anger at Crown Estate

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Byline: TOM MCGHIE

PLANS to develop urgently needed gas storage under the North Sea could be scrapped because the Crown Estate is insisting on huge rent increases, according to energy industry sources this weekend.

The plans, expected to cost billions, have already been delayed by a year and now companies say the entire project is being threatened by 'excessive' demands from the Crown Estate.

As the UK battles arctic weather conditions with gas reserves for only six days, managers of the Queen's property empire, which hands all its profits to the Treasury, are demanding a 300 per cent increase in revenue from energy companies that plan to use depleted gas fields as huge storage facilities.

The Crown Estate has a [pounds sterling]6 billion property portfolio and made a profit of [pounds sterling]226.5 million last year.

Now the companies spearheading eight storage projects are accusing the Crown Estate of of abusing its monopoly position - it owns the seabed up to 14 miles offshore. They say the already fragile viability of potential projects is being threatened by 'intrusive and excessive' rent demands.

After more than 18 months of negotiations there is frustration and anger among the energy companies, which claim they are being blocked as the Crown Estate uses its 'unregulated monopoly position to maximise revenues'. There is also resentment at what they regard as the Crown Estate's 'arrogance'. One company official said: 'They told us, ''If you don't like our terms, why don't you develop onshore? …