September 8, 2011 / 10:54 AM / 6 years ago

UK gas lifted by tight supply as LNG flows idle

4 Min Read

* 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.

"Gains across the board are being driven by fundamentally tight prompt conditions," he said.

Four LNG tankers are expected at UK terminals over the next week.

Seaborne deliveries from Qatar are better-than-expected but that has not stemmed gains on nearby contracts, traders said.

Terminals may be stockpiling incoming cargoes in order to capture a steep September-October contango of more than 7 pence-per-therm, which could explain reduced flows from some terminals, one trader said earlier this week.

Flows were steady from the South Hook terminal, at about 47 mcm/day.

Benchmark winter gas prices rose 0.60 pence at 75.60 pence on the day on the back of tight prompt fundamentals, traders said.

Flows from Norway continued at a lower rate of 35 mcm/day owing to ongoing diversions of pipeline supplies to Germany. The return of the Europipe 1 on Tuesday reopened Norway's export route to Germany following planned repairs.

In Britain's over-the-counter power market baseload prices rose in line with corresponding gas contracts as the vast majority of electricity generated in the UK on Tuesday was derived from gas.

Gas-fired power generation accounted for about 45.1 percent of the country's power supply, National Grid data showed.

Falling electricity imports from the Netherlands and France further strengthened the link between power and gas prices.

Day-ahead baseload traded 85 pence higher at 49 pounds per megawatt hour.

GAS-Please click on the following for information about UK and Belgian prices, field maintenance and field start-ups.

UK natural gas prices <0#NBPGAS-RTR>

Belgian natural gas prices <0#ZEEGAS-RTR>

North Sea field start-ups

North Sea field maintenance

Power

UK: baseload prices <0#ELBUK-RTR>, outages

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FRANCE: baseload prices <0#ELBFR-RTR>, peak <0#ELPFR-RTR>

market report , Powernext <0#POWERNEXT>,

Spectron baseload <0#FRBSLD-SPC>, off peak

<0#FROFPK-SPC>, peak <0#FRPEAK-SPC>

nuclear outages: report , offline

percentage EL-FROUTAGE-PC, offline capacity (MW)

El-Froutage-Mw

GERMANY: baseload prices <0#ELBDE-RTR>, peak <0#ELPDE-RTR>

outages , report

SWITZERLAND: outages , reservoir levels

NORDIC: report

Eu Carbon Prices Speedguide:

Reporting by Oleg Vukmanovic; Editing by Alison Birrane

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