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Dwindling Gas Supply can Freeze UK this Winter Also
May 04, 2007
In UK, around 40 Billion Cubic Meter of storage capacity and new import will be online by 2006 end, but still the country is going through the phase of low flexibility in its natural gas system and the doubts over whether the nations has enough supplies to fill its demand-supply gap are still looming.
The UK Met Office (Meteorology Office) welcomed the fiscal 2005-06 winter with the surmise that the season was going to be extremely cold and showed its concerns over the matter that the country didn’t have the needed gas import capacity to deal with such low temperature. It was an indication towards the tight supply-demand situation in coming winters.
Consequently, the prices soared in the winter, from £0.53pertherm (US$1.01/therm) to £1.18/therm. The highest spot price was recorded towards the receding winters when Rough, the largest gas storage facility of UK, had to be shut down following a fire.
The gas deficit compelled Ofgem, an energy regulator, to ask the power industry and power station operators to go for alternative fuels, and start a probe into low capacity usage on IUK (United Kingdom–Belgium Interconnector) and a EU probe into reserve procedures in Europe.
The happenings in winter of 2005-06 can be considered to draw an idea of the possible conditions UK could encounter in winter 2006-07. In winter of 2005-06, collective gas demand in UK crossed 55 Billion Cubic Meter, as against the ‘normal’ demand of around 57 Billion Cubic Meter.
One estimate says that domestic gas production will drop to around 41.76 Billion Cubic Meter this winter from 42.68 Billion Cubic Meter in 2005-06 thereby taking the country to more a sluggish position. This is in spite of the completion of United Kingdom–Belgium Interconnector’s (IUK) expansion that raises the UK’s supply potential by 7 Billion Cubic Meter.
According to the RNCOS report “European LNG Market Analysis”, UK is quite rich in coal, oil, and natural gas, and has the largest energy sector in EU. But the energy reserves of UK are depleting and hence, can no longer support the country’s demand.
The UK Met Office (Meteorology Office) welcomed the fiscal 2005-06 winter with the surmise that the season was going to be extremely cold and showed its concerns over the matter that the country didn’t have the needed gas import capacity to deal with such low temperature. It was an indication towards the tight supply-demand situation in coming winters.
Consequently, the prices soared in the winter, from £0.53pertherm (US$1.01/therm) to £1.18/therm. The highest spot price was recorded towards the receding winters when Rough, the largest gas storage facility of UK, had to be shut down following a fire.
The gas deficit compelled Ofgem, an energy regulator, to ask the power industry and power station operators to go for alternative fuels, and start a probe into low capacity usage on IUK (United Kingdom–Belgium Interconnector) and a EU probe into reserve procedures in Europe.
The happenings in winter of 2005-06 can be considered to draw an idea of the possible conditions UK could encounter in winter 2006-07. In winter of 2005-06, collective gas demand in UK crossed 55 Billion Cubic Meter, as against the ‘normal’ demand of around 57 Billion Cubic Meter.
One estimate says that domestic gas production will drop to around 41.76 Billion Cubic Meter this winter from 42.68 Billion Cubic Meter in 2005-06 thereby taking the country to more a sluggish position. This is in spite of the completion of United Kingdom–Belgium Interconnector’s (IUK) expansion that raises the UK’s supply potential by 7 Billion Cubic Meter.
According to the RNCOS report “European LNG Market Analysis”, UK is quite rich in coal, oil, and natural gas, and has the largest energy sector in EU. But the energy reserves of UK are depleting and hence, can no longer support the country’s demand.
The marker research report provides a comprehensive analysis of the European LNG market with focus on distinct markets, demand-supply statistics, and industry analysis. The report puts forth a brief overview on the competitors operating the European region.
For more information visit: http://www.rncos.com/Report/IM0304.htm
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