Maintenance work on Norway's gas infrastructure could threaten the UK's already fragile gas supply

Norwegian gas maintenance could stretch UK summer supply

Earlier and longer summer maintenance on Norway's gas infrastructure could stretch Britain's gas supply this quarter.

Operators tend to carry out maintenance in the summer gas season, which runs from April to October, due to typically lower demand thanks to warmer temperatures.

However, according to London-based consultancy Energy Aspects, this year planned maintenance in Norway has increased by 1.2 billion cubic metres year-on-year in terms of supply capacity and with 75 per cent of it happening in the first half of the summer much of it is considerably earlier than usual.

"In general terms, this summer's maintenance profiles seem more disruptive to supply than last year's," said Trevor Sikorski, analyst at Energy Aspects.

Norway supplies Britain with around a third of its natural gas and domestic supply has already been tightened over the past couple of months by a government cap on output from the Dutch Groningen field and fewer Russian gas imports.

Plans to idle the country's largest gas storage site, Rough, for six months to test wells will also see storage capacity fall to its lowest level in almost a decade this summer. Storage sites are already lower than usual for this time of year: currently they are approximately 19 per cent full.

Usually, there is a summer surplus of around 40-50 million cubic metres per day (mcm/d) in the UK gas market, but this is expected to drop to 10-20 mcm/d in the second quarter.

The doubling of Britain's carbon price floor, which has made it less profitable to burn coal, is also predicted to push gas consumption by utilities to its highest level in four years this summer, at 160 million cubic metres per day (mcm/d) compared with an average 143 mcm/d last summer.

"The summer (gas) season will be characterised by a number of supply issues, particularly in Q2. Combined with an increase in consumption relative to last summer, it will lead to some market tightness," analysts at Thomson Reuters Point Carbon said in a report.

Utilities usually inject gas over the summer months to build up stocks to help meet peak demand in the winter, but injections will likely be postponed until September, said Point Carbon.

To reserve some supply, UK exports of gas to the Continent are expected to drop to 10 mcm/day from 21 mcm/d last summer. "Without a drop in exports the market would be very tight and reliant on Russian gas," Point Carbon analysts added.

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