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Centrica shelves two gas storage projects

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British energy firm Centrica has said that it will shelve two key gas storage projects in Britain at a cost of ??240 million ($385 million). (AFP/File)

British energy firm Centrica said on Monday that it will shelve two key gas storage projects in Britain at a cost of ??240 million ($385 million).

The London-listed company partly blamed the government's decision not to subsidise new gas storage.

"Centrica plc has taken the decision not to proceed with its new-build gas storage project at Baird in the UK Southern North Sea and to put its project at Caythorpe in East Yorkshire on hold indefinitely," it said in a statement.

"This decision was taken in light of weak economics for storage projects and the announcement by the UK Government on 4 September ruling out intervention in the market to encourage additional gas storage capacity to be built."

Centrica added that it will write off all costs incurred and committed on the two projects, and said it expected to recognise impairments and provisions totalling about ??240 million as an exceptional cost in its 2013 annual results.

In early morning deals, Centrica's share price slid 0.94 percent to 398.4 pence on London's FTSE 100 index of leading companies, which was 0.30 percent lower overall at 6,576.09 points.