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03:15, 23 September 2014 Tuesday
Update: 12:10, 06 April 2013 Saturday

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Britain's biggest gas storage runs out of normal supply
Britain's biggest gas storage runs out of normal supply

Unusually cold weather in Britain has boosted gas consumption, forcing the Rough storage site off Scotland's east coast to take the unusual step of dipping into its so-called cushion or base gas

World Bulletin/News Desk

Britain's biggest gas storage site ran dry of normal supply on Friday and is using gas usually reserved for the technical operation of the site, National Grid data showed.

Unusually cold weather in Britain has boosted gas consumption, forcing the Rough storage site off Scotland's east coast to take the unusual step of dipping into its so-called cushion or base gas.

National Grid data showed Rough had just 10 million cubic metres (mcm) of normal supply available Thursday, yet has since 'nominated' or contracted to pump 21 mcm into Britain's gas network, which traders said indicated it was eating into its cushion gas.

Britain uses around 300 mcm of gas per day at this time of year, taking supply from North Sea pipelines, interconnectors from Belgium and the Netherlands, storage and imported liquefied natural gas (LNG).

Tanker deliveries of LNG to Britain in recent weeks have helped compensate for its dwindling gas in storage and bring spot gas prices back off sharp spikes hit last month.

"There is potentially an additional 1.1 TWh (terawatt hours) (100 million cubic metres) that could be produced from the Rough reservoir below this opening stock level... The opening stock published by National Grid may ultimately be at -1 TWh)," Rough operator Centrica said in a regulatory update on Friday.

Centrica said that use of the extra gas would be dependent upon technical performance, operational requirements and customer nominations (orders for gas).

"The use of cushion gas by a storage site is exceptional but the operators are probably factoring in expected milder temperatures, meaning that injections over the next few days will top up supplies so that we quickly return to a situation where there is normal supply of gas," one gas trader said.

Rough has a capacity of 2.8 billion cubic metres or approximately 70 percent of Britain's total gas storage capacity. It can supply 10 percent of the country's peak demand.

British prices for gas for within-day delivery traded at 81 pence on Friday, down 1.75 pence on the previous close, while the day-ahead contract was down 0.7 pence at 81.30p.

British natural gas prices for prompt delivery rose to near seven-year highs last month hit by freezing weather, outages from North Sea fields and infrequent deliveries of LNG.

The price spike and dwindling inventories of gas, which accounts for around a third of Britain's electricity generation, raised questions about whether the country has adequate storage.

Britain's storage sites were only around 5 percent full by Thursday, with just 235 mcm left, data from Gas Infrastructure Europe showed.

That left the market with reserves of little more than half a day's worth of gas consumption in case of a major supply outage.

Gas traders said next week a planned strike by workers on Norway's offshore gas fields could hurt gas flows to Britain.

Supply could also be impacted by unplanned outages because of technical problems that are a regular occurrence in the vast network of gas platforms and pipelines that crisscross the North Sea.

However forecasted milder weather and two deliveries of LNG to Britain due next week could take pressure off prices, traders said.



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