Gas Prices up 13% today.......

[Deleted User]

DeletedUser said:

What percentage of our gas comes from abroad?

The short answer is 'most of it'.

https://www.energy-uk.org.uk/our-work/generation/gas-generation/gas-supplies.html

LNG imports are also down because of Covid and the fact that the Asian markets are offering higher prices.

[Deleted User]

I see, so that source says we produce 40% ourselves, leaving a 60% shortfall. So at least we should be better off than places like France and Germany who don't produce any of their own gas?

That source also mentions the 'Rough' facility as storage, but i thought it was closed?

tghe-retford

chewyluis said:

UK gas futures are up nearly 18% now.

Just had a news alert flash up on my computer, now 20% up. These gas prices are soaring vertically faster than a space shuttle at launch.

chewyluis

tghe-retford said:

chewyluis said:

UK gas futures are up nearly 18% now.

Just had a news alert flash up on my computer, now 20% up. These gas prices are soaring vertically faster than a space shuttle at launch.

21% now 

Flight3287462

Dutch TTF gas prices up 24% today

Sea_Shell

Flight3287462 said:

Dutch TTF gas prices up 24% today

That 52 week range is telling! 😲

daveaspy

I dont pretend to understand these markets, but somebody must be making a killing in it - it cant just be the Russians?

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/092921-highest-ever-zeebrugge-basis-leads-to-record-uk-gas-export

njm123

This will either be a bubble that bursts or people will not be heating their homes next winter.  As gas will be unaffordable for many and no way will replacement systems be installed in every home by next winter.

merchcon55

QrizB said:

Bendo said:

Keep_pedalling said:

Thank goodness we have a government who are forward thinking and have given us plenty of gas storage facilities to ride out these peaks. Oh! sorry I am thinking of another country
https://www.theguardian.com/business/2021/sep/24/how-uk-energy-policies-have-left-britain-exposed-to-winter-gas-price-hikes

Sorry but it was British Gas that decided to shut it not ukgov. Somewhat poetic then that the cap is currently forcing then to supply gas at below cost.

and

Keep_pedalling said:

While that is technically correct, there is no way the government should have allowed it to happen. To lose 70% of our storage with the closure of a single plant is not something any other European government would allow to happen. 

It was Centrica who wanted to close it, but the UK Government who allowed it (link).

It was a condition of Centrica being allowed to purchase Rough that they would operate it as a national asset, with limits being placed on Centrica's own use. In 2017 Centrica wrtote to the government and said, in effect, "the wells and platforms serving Rough are at the end of their safe operating life, if you want us to keep operating it we'll need £1bn to replace them". The gov't decided to let Centrica close the field instead.

I found this part of the report provided in the link of interest:

However, as the  UK’s largest  gas storage  facility,  we  are aware the  removal of  Rough  could  have  potential implications on  the future security  of  gas supply  for the  UK.  We  liaised  with the  Department  for  Business,  Energy  and  Industrial Strategy  (BEIS), the  OGA and  Ofgem  on  this point.  BEIS  told  us that  it  had  recently  published  a  strategic assessment  of  the  security  of  gas supply in  the  UK. 31 The  report  finds  that  t UK  has  a  wide  range  of  gas supplies and  sources.  This includes significant levels of  domestic gas  production,  access via  pipelines  to  Norwegian  gas production,  interconnection  with  the  Continent  through  the  IUK  and  BBL pipelines  and  some  of  the  largest  and  most  modern  LNG infrastructure in Europe. BEIS  told  us that,  in  its  view,  the  UK  had  sufficient  security  of  gas supply  even  in  the  absence  of  Rough.  It  told  us that  it was aware that refurbishment  of  Rough  was not  eco he nomically  viable  in  current  market conditions and  that,  when  set  against  a  possible  call  on  public  funds in  order to  make  such  a  refurbishment  viable,  it  was content  to  see  Rough  close  as  a gas storage  facility.  The  OGA  told  us that  it  had  also  liaised  wit h  BEIS  and, given  that  BEIS  said  they  were ‘comfortable  with  Rough’s closure’,  it  too  was content.  Ofgem  told  us  that  Britain  had  diverse  sources  for gas supplies and was not  dependant  on  any  one  piece  of  infrastructure,  including  Rough. 

merchcon55

Also the following:

2.15 CSL told us that, since 2011, the economic environment for storage operators had been challenging. It told us that, in relation to long term storage such as Rough, the summer to winter gas price differential (particularly quarter one, January to March – the summer-Q1 spread) was the key driver of the value of storage products. CSL told us that spreads had been under 13 pence per therm since 2011 and in the range of about 6 to about 7 pence per therm for the past two storage years. Based on the forward market, spreads were expected to remain below 8 pence per therm until at least 2021. At these prices, it was not economic to invest circa £1 billion to allow for the resumption of storage operations, and prices would need to rise to well above current and forecast levels to generate even a modest return on investment. 

2.16 In response to our provisional decision,28 CSL reaffirmed that changes in the gas market over recent years, including increased and diversified sources of supply combined with decreasing demand for natural gas, had resulted in a significant decrease in the price of seasonal spreads. It also reaffirmed that the age and degradation of the wells and other facilities at Rough meant that Rough was no longer capable of safe injection operations without substantial refurbishment, which was not economically viable. 

2.17 ScottishPower, which operates the much smaller Hatfield gas storage facility in South Yorkshire, told us in a letter dated 31 October 201729 that the market conditions for operating gas storage sites was presently very challenging and the returns were significantly below new entrant costs.