Deep beneath the town of Northwich, Cheshire, lie four giant caverns. Created by salt miners, they have caused problems for decades. Buildings have cracked or collapsed as the ground settled, and recently the government paid to have the caverns filled with more than 1m tonnes of grout — a mixture of ash and cement.

The rest of the salt mines in England and Wales, vestiges of a sector that had its heyday during the industrial revolution, remain husks. Now they could get a new lease of life as companies line up to spend billions of pounds converting them into gas storage tanks.

It’s not a new idea. Chemical and industrial groups such as ICI have used them to store feedstock and industrial waste.

Now, though, a new streamlined planning system and a greater need for energy security as the North Sea’s gas fields dry up have spurred fresh interest.

Terra Firma, Guy Hands’s buyout firm, Barclays Capital and Macquarie, the Australian infrastructure investor, are all thought to be considering buying sites. EDF recently bought a mine in Cheshire. Another three are in the planning stages. “For the first time the commercial and legal drivers for this have come together,” said Paul Davies, a partner at Macfarlanes, the law firm.

Britain became a net importer of gas in 2004, but domestic storage capacity stands at only 4% of annual consumption. This compares with 21% for Germany and 24% for France.

The government has said it would like to increase domestic storage capacity to about 20%. Meanwhile, Ofgem, the regulator, is carrying out a review of energy security that could lead to big fines for energy groups that cannot prove they have sufficient gas supplies.

The Byzantine planning process has long been an obstacle. A new quango, the Infrastructure Planning Commission (IPC), which came into being last month, will change that.

If the project is big enough, the IPC will take decisions out of the hands of local authorities. Rather than take several years, it must decide on proposals of “national importance” within nine months.

Martin Broderick of Golder Associates, a consultancy, said virtually all salt cavern projects would fall under its remit.

To make them ready for gas storage, the mines are flushed with millions of gallons of seawater. The water dissolves the walls and rough edges to create a more stable dome or cylinder-type structure. Once the water is pumped out, the cavern is immediately filled with compressed liquid “cushion gas” to about 20% to 30% capacity to keep the walls from caving in. The rest can be filled and emptied as required.

Much larger projects are being proposed offshore. ENI, the Italian energy group, wants to convert the old Hewett oil field in the North Sea for storage. The £1 billion scheme would almost double the UK’s capacity. Centrica has proposed a similar-sized investment in the spent Baird reservoir. These fields are similar to Rough, the offshore field that today accounts for three-quarters of Britain’s 4.5 billion cubic metres of storage capacity.

They have been hindered partly by negotiations with the Crown Estate. The Queen’s property manager owns the rights to the fields and wants to triple its royalties. The companies have baulked at the terms.

Unlike the large offshore projects, which would be filled in the summer and drained gradually over the winter, salt caverns are attractive to gas traders because they can be topped up and emptied quickly, allowing owners to capitalise on high prices when demand leaps. Financial investors would probably develop the sites and then sell them to energy companies. They could also be used to store carbon dioxide captured from proposed “clean coal” power plants, though that is still several years off.

Coal gas boost

Salt is not the only old-economy industry getting a makeover in the quest for greater energy security. Coal, specifically the gas that is often found along with it, is drawing new interest. Centrica, BG and Marathon Oil have bought acres of coal fields in the hope of extracting the methane that lurks in the seams.

Island Gas Resources, Britain’s only pure coal methane developer, last week raised £13.7m to take it through its pilot production programme at three sites.

Andrew Austin, Island’s chief executive, said the company could produce 7% of the UK’s gas needs by 2014 if all the sites were brought into operation.

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats