A major natural gas export pipeline from the UK this weekend halted supply to Belgium and other EU customers following an equipment failure that is expected to be fixed by Wednesday.
Exports via the UK-Belgium Interconnector were interrupted, the pipeline operator said in a notice this weekend, just as the UK is experiencing a cold snap driving demand for natural gas higher.
Flows via the interconnector were already lower at the end of last week due to the higher gas demand in Britain. On Saturday, natural gas generated 53.6% of British electricity, followed at a distant second by nuclear with 13.9%, and wind at third with 12.5%, according to data from National Grid ESO.
The UK is bracing for an Arctic blast this week, with "impactful snow and cold this week," the Met Office said on Monday.
Warnings for snow and ice have been issued with the initial focus of the most impactful snow in northeastern areas of the UK, as well as some Northern Ireland and southern and central areas of England and Wales.
"Further warnings are likely to be issued throughout the week," the Met Office said.
Despite the UK-Belgium interconnector being offline through March 8 and the cold snap in the UK, European benchmark gas prices and British wholesale prices traded lower on Monday morning in Europe, thanks to a steady inflow of LNG cargoes and comfortable inventories across the EU for this time of the year.
Gas storage sites across the EU were 59% full as of March 4, per data from Gas Infrastructure Europe. That's the highest gas stocks have ever been at this time of the season-just before the heating season ends.
Europe's benchmark natural gas prices fell in February for the third consecutive month, extending the monthly losing streak to the longest since 2020, as milder weather, comfortable inventories, and a plunge in demand dragged down prices. At the end of February, the price fell below the threshold of 50 euros ($53.20) per megawatt-hour (MWh) for the first time since August 2021.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More