Trouble in the pipeline as gas price jumps 50%

A fault in the gas pipeline between the UK and Belgium has caused a whopping 50% spike in the wholesale price of gas.

by Andrew Saunders
Last Updated: 03 Apr 2013
The combination of demand caused by the unending cold weather and the failure of a criticalwater/glycol pump at the Bacton gas terminal in Norfolk where the pipeline comes ashore has resulted in Britain’s wholesale gas prices hitting a seven-year high of 150p per therm. Oops.
 
The faulty pump means that gas is no longer flowing through the pipeline from Belgium and it has got the gas market all in a dither. Not least because of the timing - at this time of year demand for gas would usually be falling steeply as the spring weather arrives, but with snow still falling and subzero temperatures forecast for the week ahead, winter-weary Brits are still turning up their thermostats in lieu of feeling the sun on their backs. Demand is 20% higher than usual for March.
 
The issue is compounded by the fact that stored gas reserves - of which the UK has precious little anyway - are also running low because of the exceptional demand. We have a paltry 15 days supply available, compared to 100 days in France and Germany So once again the weather manages to stymie us Brits…
 
But if like MT you were blissfully unaware until today that there even was a gas pipeline from the UK to Belgium, never mind that it was so important, well shame on you. It’s one of our key means of gas importation and it has been busy busy busy. Imports through it hit a record 783 Gigawatt hours this week.
 
The pipeline’s operator Interconnector says it is working to fix the problem, but if it persists for more than a day or two then there are fears that emergency measures may have to be instigated - such as asking large commercial users of gas to limit their consumption.
 
It all goes to show - again - that Britain is desperately lacking a grown up energy strategy. Imports of gas have been rising for years as North Sea oil declines and coal fired power stations close down, and the lack of a national strategy for coping with this fact leaves us at the mercy of both accidents such as this but also potentially of those with more malign intent.
 
At the very least we ought to be building a proper gas reserve backbone. If reserves were maintained at a sensible level then the market would be less febrile and it would take more than a prosaic pump failure to bump up the price by 50%.

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