AIM-listed UK Oil & Gas (UKOG) has announced that its wholly owned clean energy subsidiary, UK Energy Storage ('UKEn') has signed a Memorandum of Understanding ('MOU') with Wales and West Utilities Limited ('WWU'), the principal gas pipeline operator in Wales and the South West, who supply gas to around 7.5 million customers in the region. WWU plans to develop 'HyLine South West', a 100% hydrogen pipeline system to connect hydrogen suppliers, offtakers and storage within the region.
WWU recognise that connection to sufficient hydrogen storage to buffer supply and demand, such as UKEn's planned South Dorset project, will be critical for the effective future operation of HyLine South West and the establishment of the region's future hydrogen economy.
Consequently, the MOU sets out both parties' intent to collaborate with the agreed aims of:
a) Linking HyLine South West's pipeline directly or indirectly with UKEn's South Dorset salt-cavern storage (being, to date, the sole planned national scale salt-cavern hydrogen storage node in southern England);
b) Making a potential future joint submission for revenue support via the Government's Hydrogen Transport and Storage Business Model ("HTSBM") allocation round process;
c) Working closely together to promote the development of hydrogen pipelines, storage and the wider hydrogen network in the South West and across WWU's wider operating area.
By adding potential regional pipeline connectivity to the South West, this new MOU complements UKEn's MOU with National Gas (see RNS of 1st October 2025), which envisages national scale connectivity via a direct link of National Gas' Project Union pipeline to UKEn's storage.
Stephen Sanderson, UKOG and UKEn's Chief Executive, commented:
'This important MOU is a further essential building block for UKEn's planned South Dorset hydrogen storage project, enabling its at-scale salt-cavern storage to be linked seamlessly via WWU's planned HyLine South West pipeline to the region's hydrogen producers and offtakers. It also strengthens both Companies' quest for government revenue support, fulfilling the new HTSBM criteria which requires regional storage and pipeline operators to make a joint application. We very much look forward to strengthening our working relationship with WWU and ultimately to both projects' delivery.'
Mathew Hindle, WWU Head of Net Zero & Sustainability, commented:
'Across Wales and the South West, green gasses will be essential to decarbonise industry and other energy users. Our Hyline projects aim to provide the critical infrastructure to connect hydrogen production and users and enable repurposing of existing network assets to reduce disruption in the transition to low carbon energy.
Storage at scale will be critical to a resilient, clean energy system, and we are pleased to be working with UKEn to explore options for linking hydrogen networks with geological storage facilities. This will be critical to enable the growth of domestic hydrogen production and support the decarbonisation of industrial clusters and other energy users.'
Source: UKOG
