Feb. 28 (Bloomberg) -- An explosion and fire damaged Royal Dutch Shell Plc's Bacton terminal in England, which handles gas flowing from the North Sea into Europe's biggest gas-consuming country.

U.K. natural gas prices jumped more than 20 percent after a fire erupted in the water-treatment plant at Shell's terminal. Ten fire engines attended the incident, which was described as ``very large-scale'' by the Norfolk Fire Service press office today. The plant sustained some ``structural damage'' from an explosion, the fire service said. Shell said the terminal was shut and the fire has now been put out.

``Shell U.K. can confirm that a fire in the wastewater system has occurred at the Bacton gas plant, 18 miles northwest of Norwich,'' Shell spokeswoman Dawn Flett said by telephone. ``The fire has been extinguished and the plant has been shut down safely.'' All personnel on site have been accounted for, she said.

Within-day U.K. gas prices rose on the APX exchange, trading at 59 pence a therm at 8:34 p.m. London time, compared with about 52.5 pence before the blaze was reported. A therm is 100,000 British thermal units.

``Traders taking gas in through Bacton will have to replace those flows,'' Patrick Heather, an industry consultant and former head of gas trading at BG Group Plc, said in a phone interview. ``The south east is where the demand is. Bacton is our physical link to the continent.''

Gas Trading

Bacton can handle as much as a fifth of the U.K.'s net gas imports, Heather estimated.

News of the blaze came after normal trading hours for most gas brokers. The APX exchange is used by National Grid Plc, operator of the U.K.'s gas pipeline network, to buy and sell the fuel to balance daily demand.

Gas traders will ``pounce'' on the Bacton news when trading resumes tomorrow, Heather said. ``At this time of night it will just be balancing trading.''

Shell's Bacton terminal processes gas from the U.K. North Sea and also handles supplies from the Balgzand-Bacton Line that links the Netherlands and the U.K., according to Shell's Web site. Exxon Mobil Corp. is a part-owner of the terminal, according to Shell.

No gas was flowing through either the Bacton Shell or Bacton Seal terminals, data from National Grid showed.

Flows through the BBL pipeline from the Netherlands were unaffected by the fire, according to National Grid data on Bloomberg. The fuel was arriving into the U.K. at a rate of about 35 million cubic meters a day at 8:26 p.m.

To contact the reporters on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net; Bill Murray in London at wmurray1@bloomberg.net

Last Updated: February 28, 2008 15:37 EST