Norway 'preparing for conflict with Russia' says expert
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Concerns that shortages on the continent could jeopardise the supply of gas back to the UK were played down by Number 10, which highlighted both North Sea production and the use of “reliable partners” such as Norway in ensuring homes could be heated and the lights kept on over the winter.
But gas export flows in Norway are now down by about 34 million cubic meters per day this week.
The UK has some of the highest LNG import capacity in Europe, but it has very little gas storage.
British and Dutch wholesale gas prices rose sharply on Monday as the prospect of maintenance on the main Russian pipeline to Europe put markets on edge, while outages at Norwegian and UK gas fields also lent some support.
The Dutch contract for next-day delivery rose €47, or almost a fifth, to a record high of €292 per megawatt hour (MWh) by 1321 GMT British gas for immediate delivery was up 138 pence, or 37 percent, to 503 pence per therm, and the day-ahead contract rose 119 pence, or almost a third, to 480 p/therm, both reaching a five-month high.
Russia will halt natural gas supplies to Europe via the Nord Stream 1 pipeline for three days at the end of the month, piling pressure on the region as it seeks to refuel ahead of winter.
“The three-day pause will once again raise fears that the Kremlin will weaponise gas supplies and use the maintenance as an excuse not to resume flows,” said Craig Erlam, an analyst at OANDA.
Nord Stream 1 flows were steady on Monday, while eastward flows through the Yamal-Europe pipeline from Germany into Poland rose.
Exports of gas from Norway to Britain were expected to fall due to outages at some gas fields, but flows to continental Europe were steady.
Norwegian gas nominations to Britain dropped by 15 million cubic metres (mcm) per day to 55 mcm on Monday, compared to the previous day.
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“Ongoing planned maintenance at the Kollsnes processing plant (in Norway) and Troll field until the end of August, and increased residential and power-sector demand in the UK and continental Europe have also contributed to higher prices,” said Christos Anagnostopoulos, Commodities Analyst at Aurora Energy Research.
The UK system was under-supplied by around five million cubic metres (mcm), according to National Grid data, with heavy maintenance ongoing at UK Continental Shelf (UKCS) fields and terminals.
However, UK gas storage was almost full.
The No 10 spokeswoman added people should not panic or feel they should cut down on energy use.
She said: “These decisions, in terms of energy consumption, remain decisions for individuals.
“But what I’m saying is that households, businesses and industry can be confident that they will have the electricity and gas that they need.”
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But No 10 backed a plan being developed the National Grid Electricity System Operator (ESO) which could see households with smart meters being paid for turning off high-energy appliances such as washing machines during peak times to reduce the risk of blackouts this winter.
“We support the National Grid in developing all options which could benefit consumers and help to reduce bills by spreading out peak demand,” the spokeswoman said.
Ahead of Ofgem’s announcement of an increased energy cap, due on Friday, Chancellor Nadhim Zahawi will meet bosses from generating firms including Orsted, Newcleo and RWE to discuss what more the industry can do to ensure markets function effectively for consumers.
The Attalos departed from Malaysia on July 20, according to data from Vessel Finder.
It had picked up a shipment of gas that had come from Australia, according to commodity experts at Kpler.
The Attalos is expected to dock on Monday evening.
Because of the long distances involved, it is rare for Australian gas to find its way to Europe.
Most instead goes to countries in Asia.
But the deep gas crisis that Europe is currently facing has catapulted the need for new sources of the fossil fuel.
Gas prices have soared in the last year, and the UK price for delivery next month was up another 17 percent on Monday morning, hitting £5.40p per therm.
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