LONDON: Britain’s wholesale gas prices surged to a record high yesterday after one of its main gas import pipelines shut down unexpectedly, exposing yet again its vulnerability to foreign supplies.
The country is already grappling with a potential gas supply crisis as a late blast of winter depletes stored reserves, coal power plants close and pending maintenance in Norway threatens to further squeeze supply.
Gas prices for within-day delivery spiked at 150 pence per therm, more than 50 percent above Thursday’s closing price, following the closure of the pipeline linking Britain and Belgium that facilitates gas imports from Europe.
“I don’t think the price has ever been higher. It’s certainly super spike territory,” a gas trader at a utility said yesterday.
A water pump failure forced the shutdown of the UK-Belgium Interconnector gas pipeline at around 0700 GMT. Flows resumed at a reduced rate at 1145 GMT, but the pipeline operator warned that it was unable to meet customers’ end-of-day gas nominations.
“Interconnector UK Limited (IUK) has a technical issue at its Bacton terminal which stopped gas flow into the UK. We have now resumed flow at a reduced rate,” Interconnector said in a market message published at 1151 GMT.
After news that imports from Belgium had resumed, within-day gas prices fell to around 100 pence per therm.
Gas flows through the Bacton terminal where the Interconnector arrives rose from zero to around 8 million cubic metres per day just after midday, National Grid data showed.
Britain’s National Grid said it was monitoring the situation and the energy ministry added Britain had sufficiently diverse capacity to cover unplanned interruptions.
The European Commission said it had not been alerted by the UK energy ministry about concerns regarding gas supplies, but that the EU executive was closely monitoring the situation.
The Interconnector is one of Britain’s main gas import pipelines and on Wednesday set a new record by exporting 783 gigawatt-hours of gas from Belgium to Britain.
The British gas market has been under severe strain after weeks of cold weather which have drained gas storage levels.
It risks running out of stored gas by April 8 based on the fall in its reserves seen since the cold hit at the beginning of March, Reuters calculations show.
Reuters
