Britain may face mass gas supply shortage of winter gas: NGT
Kenilworth (Platts)--1Jul2005
Britain could face mass gas supply shortages and potential industrial shutdowns to curb demand if the coming winter is severe, National Grid Transco's forecasting manager Duncan Rimmer told a gas networking conference Thursday. Even the start up of Britain's first liquefied natural gas import terminal at Kent's Isle of Grain, owned by NGT and expecting first imports by early July, would be unlikely to ease supply/demand tightness in an average winter. "This winter is going to be a critical year because gas from the North Sea continental shelf is running out much faster than anticipated," Rimmer said. "It all depends on what operation level Grain achieves by the winter." In the worst case scenario, which sees Grain operating at 75%, Rimmer said industrial response would have to be matched with full flows from the continent, but even that would unlikely fill the supply gap. Rimmer added gas prices could rise to levels where industry found it more cost-effective to suspend operations altogether. "They would either have to shutdown, or those that could, might have to switch to alternative fuel sources such coal," Rimmer said. NGT's group director Steve Holliday said that although loading operations for Grain's first expected import had begun in Algeria, there was no guarantee on the volumes to be expected and that loading delays had been occurring. NGT has been in consultation with industry to determine potential response strategies but Rimmer said that switching to more carbon heavy fuels such as coal could prove unattractive for companies keen to keep carbon emission levels low to satisfy EU carbon emission requirements. He said the supply crunch would likely be alleviated by 2006 when alternative gas supply projects come on stream serving the UK. A cargo of Algerian LNG is due to arrive at the Isle of Grain terminal on Jul 3, the first to be supplied under a 20-year 5-bil cu m/yr contract between BP and Sonatrach. More stories like this are published in Platts European Natural Gas Report. Request a free trial at http://eng.platts.com.
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