January 4, 2010 / 4:56 PM / 10 years ago

UPDATE 2-UK's National Grid warns over high gas demand

(Updates throughout)

LONDON, Jan 4 (Reuters) - Britain’s gas supplies improved significantly after National Grid (NG.L) issued a gas balancing alert (GBA) on Monday warning consumption may have to be cut as cold weather gripped the country, the network operator said.

National Grid issues GBAs when demand rises to a level where, if supply falls further, there is a risk that consumption of the fuel by big users like power plants may have to be cut to balance supply.

But a rise in supplies shortly after the alert was issued eased concerns for now.

“National Grid reports that supplies of gas to the UK have increased following the issuing of a gas balancing alert today,” a spokesman for National Grid said.

“Extra supplies of gas have come mainly from the liquefied natural gas (LNG) importation terminal on the Isle of Grain in Kent, through the gas interconnector with Belgium, and through the Langeled pipeline from Norway.”

Britain’s coal-fired power plants overtook gas in the UK power generation mix on Monday afternoon, after an unusually long period of gas fired power domination for winter, after gas prices surged on tight supply. [ID:nWLA1904] [ID:nLDE6030P6]

Unusually cold weather is set to continue over the next two weeks. [ID:nLDE6031DH]. It has driven up demand for gas — the fuel used to heat about two-thirds of homes in Britain — to about 30 percent above seasonal norms on Monday.

Big industrial consumers are expected to reduce their consumption at times of short supply and high demand, rather than residential users who rely on it to keep warm. A spokesman for the company said the decision on whether to issue an alert for the rest of Tuesday would be taken later. (Reporting by Daniel Fineren, editing by Anthony Barker)

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