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UK GAS-Prompt prices rise on a sharp drop in Norwegian flows
March 12, 2015 / 8:51 AM / in 2 years

UK GAS-Prompt prices rise on a sharp drop in Norwegian flows

* Gas network undersupplied by 20.5 mcm/day

* Kaarstoe outage expected to last for 12 hours

March 12 (Reuters) - British prompt natural gas prices rose on Thursday as an unexpected outage cut supplies from Norway sharply, resulting in an undersupplied system.

Gas prices for Friday delivery rose 1.05 pence per therm to 48 pence by around 0800 GMT, while gas for immediate delivery firmed by 0.65 pence, also to 48 pence per therm.

The British gas system was undersupplied by 20.5 million cubic metres (mcm), as gas demand was pegged at 244.8 mcm compared with forecast flows of 224.3 mcm on Thursday, according to National Grid data.

Gas flows to Britain from Norway fell by 30 mcm on Thursday morning compared with the previous day after Norwegian gas processing plant Kaarstoe was hit by an unexpected outage.

The outage, which started early on Thursday, is expected to last for 12 hours and to reduce Norway's gas production capacity by 25 mcm, the country's gas system operator Gassco said.

Gas deliveries into Centrica's Barrow South terminal, which stopped on Tuesday due to technical issues, were still down on Thursday morning, data from the National Grid showed.

Temperatures in Britain are expected to rise above normal levels on Thursday, but to fall below normal levels by Saturday, likely increasing demand for gas for heating systems.

Further along the curve, UK gas prices for April were trading 0.35 pence higher at 47.60 pence per therm, while the summer contract was up 0.20 pence at 45.20 pence per therm.

In the Dutch gas market, the day-ahead TTF price was up by 0.27 euros at 22.50 euros per megawatt hour, as Norwegian exports to continental Europe were reduced.

The benchmark European Union carbon price was down 0.05 euros at 6.76 euros per tonne on ICE Futures Europe. (Reporting by Nerijus Adomaitis; editing by Nina Chestney and Pravin Char)

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