UK spot gas prices jump as Ormen Lange shuts down

Fri Feb 11, 2011 11:19am GMT
 

 LONDON, Feb 11 (Reuters) - British gas prices surged after
one of the North Sea's biggest production platforms shut down on
Friday, slashing supply to Europe's biggest market.
 Norway's Ormen Lange field was shut down on Friday morning
after a technical glitch, with operator Royal Dutch Shell
(RDSa.L: Quote) unable to say when it might restart. [ID:nLDE71A0PX]
 Flows of gas from the huge field through the Langeled
pipeline dived from around 65 mcm/day at around 0910 GMT to
around 53 mcm 30 minutes later, driving UK gas prices for
immediate delivery up about 3 percent from Thursday's levels
GB2NB to highs around 54 pence on Friday morning.
 Low demand for heating in mild weather in Britain helped
temper the rise in prices, traders said, with National Grid
forecasting demand of just 291 million cubic metres (mcm) for
Friday, 18 percent below seasonal norms.
 Within day gas prices eased back from the Ormen Lange
sparked jump to 53.75 pence by 1030 GMT, while contracts for
Monday edged down to 53.60 pence.
  <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
  Graphic of Langeled gas flows vs UK spot:
  link.reuters.com/xuc97r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 Prices also rose on the forward market, with strong oil
prices because of uncertainty about stability in Egypt after
President Hosni Mubarak refused to step down on Thursday
supporting gas prices on the far curve and a colder weather
outlook supporting the prompt.
 "Mubarak did not resign," said one gas trader. "It's looking
colder next week."
 Mild weather had weighed on UK gas prices all week until the
Ormen Lange shutdown startled the market.
 March contracts rose half a penny to 53.45 pence ($8.58 per
mmbtu) by 1040 GMT, while Summer 2011 rose 0.65 pence to 53
pence and winter by a similar amount to 60.30 pence.
 Curve prices also firmed in the over-the-counter (OTC) power
market, because gas is a key fuel for the UK power generation
sector, with March baseload up about 30 pence to 46.35 pounds
per megawatt-hour (MWh) and April contracts up 20 pence at 46.20
pounds, according to one broker.
 Monday baseload power traded at 45.80-46.50 pounds.
 (Reporting by Daniel Fineren)



























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