A Stadium Full of Sand Needed to Prop U.K.’s Teetering Gas Link

(Bloomberg) --

Britain’s only link with continental Europe’s natural gas network is at risk of tumbling into the North Sea, prompting a rescue involving thousands of tons of sand.

For five decades, the Bacton terminal on the Norfolk coast in eastern England has served as the nation’s most important energy-supply hub even as waves and wind eat away at its foundations. The facilities run by companies including Royal Dutch Shell Plc and Perenco SA draw in gas from offshore fields and from two interconnector pipelines.

Yet erosion at the site is increasingly dangerous, with an average of about 1 meter of earth tumbling into the sea every three years. A single storm in December 2013 wiped out 10 meters of cliff, according to Royal HaskoningDHV, the Dutch company that’s been hired to fortify the beach in front of the terminal. At the narrowest point, there’s only 15 meters separating the Bacton terminal from the cliff edge.

“Any disruption at the Bacton terminal would have huge ramifications,’’ said Wayne Bryan, senior European energy and commodity analyst at Alfa Energy Ltd. “On the wholesale market, price increase would be astronomical. The energy security of the U.K. would be threatened.”

This summer, Royal HaskoningDHV will pump enough sand onto the coast in front of Bacton to fill half of London’s Wembley Stadium. That should protect the facility for at least another decade.

Bacton’s role in the U.K. is central because it’s the only place where pipelines from the more liquid markets in the Netherlands and Belgium connect to the British grid. The terminal also takes in supplies from a number of production fields in the North Sea. During winter and in periods of peak demand, it handles tens of millions of dollars of gas a day, then sits idle sometimes for weeks at a time when there’s a lull. That flexibility makes it a buffer for fluctuations in flows elsewhere in the system.

The project is one of dozens of upgrades of infrastructure needed to keep Britain functioning. It’s an example of how the U.K., even as it works to leave the European Union, depends on tight links with the continent to keep its economy functioning.

Bacton “gives Britain an indirect access to Russian and North African gas,” said Elchin Mammadov, an analyst at Bloomberg Intelligence. “Maintaining that link to Europe will be very important as our domestic production will probably decline in the future.”

Shell says it’s committed to continuing operations at Bacton and is spending 300 million pounds to upgrade its facility. It contracted for new flows into the terminal as recently as November. Shell and Perenco both declined to comment.

Erosion has been a problem in the area for centuries. A church in a village about eight miles away fell into the sea about 770 years ago, as did its replacement in the late 19th century. Now it’s a problem for homes in several villages along the east coast.

The cliffs of northern Norfolk are made up of soft sediments, which when eroded by waves, are released into the water and transported along the coast like a “river of sediment” where they are redeposited. This accounts for the volatile rates of erosion seen in the region, according to John Bacon, a coastal processes modeler at the Centre for Environment, Fisheries and Aquaculture Science.

The so-called sand-scaping that Royal HaskoningDHV will conduct requires investment of about 20 million pounds ($26 million). Work will start in July, when the weather is most calm, and may take as long as five months.

Large dredging ships will come near the coast, using pumps to suck up sand from the seabed, according to Jaap Flikweert, who leads professional flood resilience at Royal HaskoningDHV. Then a system of pipelines will be installed to pump the sand onto the beach.

The project was due to start last year but was delayed due to the complications of getting regulatory permits in place, funding agreed and contractors lined up, Flikweert said. The U.K. government operates a system of licensed areas for sand mining, ensuring that extraction doesn’t affect the coast or animal habitats or other functions.

The sea eventually will eat away at the sand, requiring the owners to revisit the issue in another 15 years or so, according to Royal HaskoningDHV.

--With assistance from Anna Shiryaevskaya.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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