PRN: GB Wholesale Natural Gas Price for Coming Winter Reaches Three-Year High
GB Wholesale Natural Gas Price for Coming Winter Reaches Three-Year High
LONDON, August 31, 2011 /PRNewswire/ --
Britain's wholesale natural gas price for the coming winter traded at its highest level in more than 34 months on Wednesday morning supported by concerns over maintenance to gas production facilities in Qatar.
At the start of Wednesday's trade, the Winter '11 contract was dealt over-the-counter at 78.25p/th, the highest level since 15 October 2008, according to ICIS Heren data.
The gas price for this winter's delivery began to rise sharply on Friday afternoon as speculation increased that Qatargas, the Qatari state-owned gas producer, would reduce output over the autumn so that it could hold essential maintenance to some of its production trains.
Confirmation by Qatargas came on Tuesday and pushed up the Winter '11 price further. The bullish sentiment briefly continued at the start of Wednesday's trade, to hit a three-year high, before dealing lower.
Gas from Qatar is transported to Britain by liquefied natural gas (LNG) vessels. On some days in recent months, LNG imports have accounted for more than 40% of British daily supply.
According to the Department of Energy and Climate Change (DECC), in 2010 the British wholesale gas market, the NBP, was 47% reliant on gas imports, compared with 33% in 2008.
DECC statistics show LNG accounted for 16% of overall supply to Britain in 2010, up from less than 1% in 2008.
"The record rise of the front-season contract that we have seen in recent sessions just goes to show how sensitive the NBP has become to the global LNG market. The lift has been further supported by ongoing concerns that spot LNG cargoes - that traditionally head for northwest Europe - will now go to the Japanese market, to plug an energy shortfall in the wake of the Fukushima nuclear disaster," said Tom Marzec-Manser, Senior Reporter at ICIS Heren.
Qatar is the single largest source of LNG for the NBP. The other main source of imported gas to the British market is Norway.
LNG tankers are specially adapted vessels which refrigerate gas to liquid form, to allow for transportation. The NBP has four terminals which are capable of receiving these craft.
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