UK energy regulator Ofgem has over recent weeks made clear its concerns about the levels of gas supplies from Britain's offshore fields, the Isle of Grain LNG terminal and through the interconnector pipeline with Belgium. The regulator now says some of these concerns have eased following several urgent initiatives.
On UK gas supplies, Ofgem has published analysis carried out jointly with the government’s Department of Trade and Industry (DTI), using data provided by the offshore industry. This shows that all available gas supplies have been flowing from the North Sea during the recent period of high wholesale gas prices. Any shortfall on certain days resulted from a combination of planned and unplanned maintenance of North Sea gas facilities.
On LNG imports meanwhile, Ofgem has welcomed news from National Grid, BP and Sonatrach about the use of the Isle of Grain LNG import facility this winter. BP and Sonatrach have stated that the facility will be utilized fully over the next fortnight and that they expect to be using the full capacity of the facility until the end of the winter. The three companies are also improving the arrangements for transparency and use it or lose it at the Isle of Grain facility.
Thirdly, on European imports, Ofgem wrote to the European Commission on November 25, 2005, asking it to investigate why more gas had not flowed through the interconnector when UK gas prices were above European levels.
Ofgem has also highlighted its concerns about arrangements in other member states (such as Spain) that could be preventing LNG being delivered to the UK. The commission has now confirmed that it will analyze Ofgem’s concerns quickly and undertake any necessary investigations.
Ofgem’s chief executive Alistair Buchanan said: Good quality information is the lifeblood of any market. Uncertainty in this winter’s tight gas market can lead to consumers paying an anxiety premium as market speculation takes the place of hard facts. Our announcements today are designed to ensure that everyone has the most accurate information about gas supplies this winter.