U.K. Natural Gas Declines as Flows Rise to Meet Record Demand

U.K. natural gas for same-day delivery declined as system flows increased to meet the highest- ever demand for the time of year amid colder-than-average weather.

Day-ahead and weekend contracts also fell, according to broker data compiled by Bloomberg. Total flows were at 376 million cubic meters a day, while demand in the 24 hours to 6 a.m. tomorrow was predicted at 373 million, National Grid Plc (NG/) data showed. The average temperature in London tomorrow will be 0.5 degrees Celsius (33 Fahrenheit) versus a 10-year average of 8.4 degrees, according to MetraWeather data on Bloomberg using the ECMWF model.

Within-day gas retreated 9 percent to 91 pence a therm at 8:45 a.m. London time. Gas for tomorrow dropped 13 percent to 91 pence, while the weekend contract slid 20 percent to 84 pence a therm.

Gas for April rose for a sixth day, adding 0.3 percent to 71.1 pence a therm after reaching 72 pence March 22, the most since November 2008. Today’s price was equivalent to $10.83 per million British thermal units and compares with $3.94 per million Btu of front-month U.S. gas,

U.K. gas prices surged to seven-year highs March 22 as a fault on the Belgium-U.K. interconnector between Zeebrugge and Bacton cut supplies equal to about a quarter of British consumption.

Today, imports from Belgium through Interconnector U.K. Ltd.’s pipeline were at a rate of 59 million cubic meters a day after reaching a record 79 million cubic meters a day March 22, according to National Grid data.

Norwegian Flows

Flows from Norway, the U.K.’s biggest source of imported gas, were at 124 million cubic meters a day versus a 30-day average of 108 million, Gassco AS data showed.

Inventories at Rough, the U.K.’s largest gas-storage facility, fell to an all-time low of 2,243 gigawatt-hours March 23, equivalent to 209 million cubic meters, or 54 percent of today’s forecast supply. The site is unable to flow at full capacity of 42 million cubic meters a day because of falling pressure, it said on March 19.

Liquefied natural gas tankers with a total capacity of 5.5 million cubic meters (3.1 million cubic meters of gas) arrived in the U.K. in the five months through February, according to data compiled by Bloomberg.

The 261,137 cubic meter LNG tanker Mekaines arrived at the Isle of Grain terminal in the east of England yesterday, ship- tracking data showed. The 261,104 cubic meter Zarga was due at South Hook in Wales today, while the 211,885 cubic meter Tembek was scheduled to dock at Milford Haven March 29. The 136,167 cubic meter Methane Kari Elin changed its destination to Milford Haven after leaving Trinidad, ship data showed today.

Gas accounted for 33 percent of U.K. power production at 9:10 a.m., grid data showed. Coal generated 36 percent, nuclear 16 percent and wind 9.1 percent.

Electricity for the next working day dropped 4 percent to 71.50 pounds a megawatt-hour, according to broker data.

To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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