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UK Prompt Gas Prices Rise on Field Outages

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Reuters

LONDON, Aug 15 (Reuters) – British prompt gas prices rose slightly on Thursday as supplies fell short due to a combination of Norwegian and domestic maintenance outages, triggering withdrawals from storage.

The price of gas for delivery on Friday rose 0.35 pence to 65.30 pence per therm, while gas for instant delivery gained 0.7 pence to 65.50 pence due to the drop in deliveries.

Britain's gas market was undersupplied by around 1 million cubic metres/day (mcm/day) as an unplanned outage at Norway's Oseberg gas field cut all flows to Britain through the Vesterled pipeline.

Demand was estimated at 134.5 mcm on the day.

"Vesterled was flowing at around 10 million cubic metres/day (mcm) before the outage and as a result UK Continental Shelf flows are down to a current 83 mcm," analysts at Thomson Reuters Point Carbon said.

Deliveries through Norway's other export pipe to the UK - the 70 mcm per day Langeled pipeline - stopped on August 10 and are not expected to resume before August 19.

Flows into BP's Teesside terminal dropped to zero from about 4 mcm due to maintenance on the CATS Riser platform in the North Sea.

Britain's storage sites were filled to an average of 78.5 percent at the beginning of the week, around 15 percentage points behind this time last year.

Traders said that low storage levels following last winter's late cold spell in March and April were also still having an impact.

Withdrawals from mid-range storage sites stepped higher in order to help plug supply gaps while the South Hook liquefied natural gas (LNG) terminal pumped nearly 20 mcm into the grid.

The high spot prices also continued to feed into the far end of the curve, where prices for delivery next winter rose a quarter of a penny to 70.75 pence.

(Reporting by Oleg Vukmanovic; editing by Jason Neely)

 

Copyright 2014 Thomson Reuters. Click for Restrictions.

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