Norwegian gas pipeline maintenance forces gas prices up

Gas prices were propelled higher at the NBP on Monday amid incoming Norwegian maintenance and despite an improved LNG outlook.

The biggest increases was perhaps the strongest at the front-end, with contracts across the near-curve climbing circa 0.11p/kWh higher when compared to their previous close. An anticipated surge in offline Norwegian capacity possibly prompted market participants to factor more risk into contracts at the front-end.

Data from offshore operator Gassco shows that 179.91mcm of capacity will be removed on 21/05/2024 due to annual maintenance across the NCS (Norwegian Continental Shelf). While unavailable volumes are set to fall sharply 89.91mcm by Wednesday morning, any delays bringing assets back online could play directly into the hands of the bulls.

The upward momentum of yesterdays session was likely quelled by news of more LNG cargoes bound for UK terminals; the latest shipping signals suggest that 3 vessels are set to arrive by the end of this week thus helping to mediate offshore capacity restrictions.

In other news, British operator Serica Energy has been given the final green light by the UK’s North Sea Transition Authority (NSTA) to develop the Belinda prospect that was discovered back in 1990. The oil and gas field, which has proven reserves of 5 million BOE (barrels of oil equiv.) is set to come online in Q1 2026 and will plug into the existing Triton network.

Prices have opened very much in line this morning, with the Winter 24 front-season contract currently being offered just circa 0.007p/kWh below its previous settlement, although many contracts have yet to trade at time of writing.

The UK is currently consuming 28.31 GW’s of electricity (09:00 – 09:30).

The UK’s onshore and offshore wind turbines are currently generating 1.68 GW’s (5.48%) of the UK’s total electricity with solar generation at 2.94 GW’s (9.57%) and gas for power generating 12.59 GW’s (40.98%) of the total.

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