Sunday, September 17, 2006

Gas this Winter

Interesting article in the Independent about gas supplies:

Energy minister Malcolm Wicks, National Grid and the industry's regulator Ofgem are to hold a summit with their Belgian counterparts tomorrow to try to ensure that gas continues to flow to the UK this winter.

...............Tomorrow's meeting is the first such summit in six years, and is aimed a making sure access for gas shippers to the Interconnector is not restricted.

...............Gas prices, which were over 80p per therm earlier this year, have since fallen by a quarter, but are still among Europe's highest.

..............Interconnector Ltd, which operates the pipeline, is a private company owned by, among others, BG, the German energy giant E.ON and Russia's state-controlled Gazprom. It blames the under-usage on a lack of pipelines to transport gas from Russia through Germany and to the Interconnector in Belgium.

Currently, around two-thirds of the pipeline's capacity is being used to import gas from the Continent. New pipelines being built across Europe over the next few years will increase the supply to the UK but prices are likely to remain high this winter..

..............Also this week, Mr Wicks will co-chair the second meeting of the Business Energy Forum along with Richard Lambert, director-general of the CBI.

The forum was set up last year to look at issues such as why there are so few gas storage facilities in the UK, as well as the operation of the Interconnector.



Gas storage facilities are of course key. E.ON's web-site says that while Germany's gas storage facilities represent 20% of their annual gas consumption, Britain's only represents 4%. E.ON, which owns Powergen, has submitted an application to build an underground storage facility in East Yorkshire, which is due to start construction in 2007 and become operational in 2010. Construction on the storage facility at Holford in Cheshire has already begun.

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