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Near-term UK wholesale gas prices rebound on undersupplied system, curve steady

http://www.chemnet.com   Nov 20,2014 Platts
Near-term UK wholesale gas prices recovered Tuesday's losses as the UK gas system opened undersupplied, with lower supply from the Isle of Grain LNG terminal and gas demand broadly unchanged from the previous day.

Within-day gas prices were seen trading at 55.20 pence/therm at 11:00 am London time, up by 1.60 p/th from the previous close due to the system being seen 10 million cubic meters short, with the day-ahead contract rising 0.50 p/th to 55.10 p/th.

National Grid's 10:00 am demand forecasts were 255 million cu m, slightly lower than Tuesday's and 7 million cu m below the seasonal norm. However, physical flows dropped to 246 million cu m.

The Isle of Grain LNG terminal in southeast England was not active Wednesday morning after having been sending gas into the system at a rate of close to 30 million cu m/day Tuesday afternoon -- flows from the South Hook LNG terminal however were running at 43 million cu m/d.
Dragon LNG remained inactive after having last sent gas into the system back in early October according to Platts flow data.

Norwegian gas imports were running at 98 million cu m/d according to Gassco, split between Easington and St Fergus at 68 million cu m/d and 30 million cu m/d respectively -- total Norwegian gas exports were at 329 million cu m/d.

Maintenance on the Skarv gas field due to an export compressor driver problem continues, with Gassco expecting the field to restart November 25, boosting production capacity by 10.9 million cu m/d.

UK gas production is nominated at 81 million cu m according to Platts unit Bentek Energy, in line with the seven-day average and 9 million cu m higher than average UK gas production from October.

Net flows from continental Europe are lower than in previous days with Interconnector exports nominated higher for Wednesday.

IUK shows 12 million cu m of exports set for Belgium, a two-week high, with imports from the Netherlands running at 15 million cu m Wednesday morning.

Bentek reports storage withdrawal nominations of a mere 2 million cu m for Wednesday with only the Hornsea medium-range facility active.

UK gas storage facilities remain well stocked with 3.717 billion cu m at Easington Rough and 1.060 Bcm at short- and medium-range gas storage facilities.

On the curve, prices have held onto Tuesday's late gains and were tracking sideways in early trading -- front-month December was changing hands at 55.275 p/th with Q1 15 and Summer 15 valued at 56.30 p/th and 52.20 p/th respectively.
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