Gas price falls as LNG deliveries from Norway, British terminals increase

As higher deliveries from Norway and Britain’s liquefied natural gas (LNG) terminals left the system oversupplied, the British wholesale gas prices fell on Tuesday morning.

Gas for immediate delivery fell by 1.35 pence to 29.30 pence per therm at 0800 GMT, while the day-ahead contract lost 0.95 pence to 29.65 pence/therm.Britain’s gas system was oversupplied by 16 million cubic metres (mcm) with flows forecast to be around 216 mcm/day, according to National Grid data.

Despite an ongoing outage at Nyhamna gas processing plant which was expected to reduce capacity by 5 mcm on Tuesday, imports through the Langeled pipeline from Norway rose by 16 mcm to 39 mcm/day.

“The glut of gas intra-day (supply), together with an increase in temperature forecasts for next week, have seen prompt prices fall further, wiping out the gains seen on Monday,” said Anrew Crabtree, an analyst at Wingas.

Deliveries from LNG terminals remained strong, at over 40 mcm/day, and could rise further, analysts said.

“We expect LNG sendout to remain strong at 45 mcm/d with a possibility of even higher than 50 mcm/d as a number of cargoes are possibly heading to the UK,” said DimitriosSaratzis, gas market analyst at Thomson Reuters.

LNG tanker Al Mafyar is scheduled to arrive in Britain on May 17 and another four could potentially come this month, Reuters shipping data showed. [LNG/TKUK]

In the Netherlands, the day-ahead gas price at the TTF hub fell by 0.18 euro to 12.77 euro/MWh. In the European carbon market, front-year allowances eased by 0.03 euro to 5.67 euros a tonne.

British day-ahead power prices were up by 4.5 percent at 37.30 pence per megawatt-hour (MWh) after National Grid requested more supply on Monday evening to meet the required level of backup power.

Source: Reuters