UK gas lifted by tight supply as LNG flows idle

Thu Sep 8, 2011 10:54am GMT

* Supply from Teesside BP, Bacton Shell terminals cease

* Transmission system 13 mcm/day short of gas

* Better-than-expected LNG supply fails to cap gains

LONDON, Sept 8 (Reuters) - British prompt gas prices rose on Thursday morning as supply fell short of demand after two liquefied natural gas (LNG) terminals fell practically idle and Norway diverted supplies to Germany.

UK NBP gas for immediate delivery rose 1.45 pence per therm on Thursday, at 59.45 pence, and gas for delivery next week rose 1.25 pence at 58.25 pence on the day.

Prices turned bullish as the transmission system ran 13 million cubic meters/day short of gas amid broad-based supply losses from offshore fields.

Supply from the Teesside BP and Bacton Shell terminal were at zero, while Dragon LNG flows ceased and Isle of Grain LNG contributions hovered above zero.

Gas for Friday delivery traded at 57.75 pence, down 0.40 pence day on day, the only prompt contract to post losses.

"It's a big surprise that we don't have more gas given that the IUK (Interconnector UK) is out of service," one UK gas trader from a European utility said.   Continued...

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