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A perfect storm of the ‘Beast from the East’ blizzard and Storm Emma from the Atlantic onto the southwest—coupled with freezing weather-related outages in gas imports—have prompted UK’s National Grid to issue on Thursday its first ‘Gas Deficit Warning’ in eight years.
“Due to the extremely cold weather we are seeing very high demand for gas so this morning we issued a ‘Gas Deficit Warning’ which is a notice to the gas market that we would like more gas to be made available. This is a situation that we are always prepared for,” National Grid said on Thursday.
“This is an indication to the market that we’d like more gas to be made available to ensure the safe and reliable operation of the national gas network. We are in communication with industry partners and are closely monitoring the situation,” the national gas grid operator said, as the Met Office issued a Red Alert weather warning for Thursday and Friday.
The very cold weather in Europe, the result of the ‘Beast from the East’ Siberian front, has also caused issues with gas deliveries to the UK via pipelines from Norway, Belgium, and the Netherlands, further stretching the thin gas supplies in Britain.
The current gas crunch situation is the first real test of the UK’s ability and flexibility to cope with possible gas shortages since Centrica closed the country’s largest gas storage facility at Rough in 2017, the Guardian notes.
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“It is highly likely that National Grid will have to interrupt supply to industrial consumers as it struggles to balance the system as UK flexibility remains limited and the Continental temperatures are set to remain well below normal into the weekend,” S&P Global Platts Analytics’ Simon Wood said.
“Prices are rocketing for the second day running as, with the system short, National Grid attempts to incentivize strong storage withdrawals and imports from the Continent,” Wood added.
However, the Continent is also gripped by the cold snap and has its gas storage stocks at the lowest level since 2013. So the UK basically has to rely on flexibility as it would not be able to draw significant imports from Europe, Platts notes.
With the Rough storage site now closed, UK storage stocks are at their lowest on record for the beginning of March.
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.