THE price of wholesale gas yesterday surged to a huge record high after the unexpected closure of one of three import pipelines.
A technical fault at the UK-Belgian interconnector, one of the UK’s biggest import pipelines, forced the shutdown.
The price of gas for same-day delivery jumped as much as a massive 50 per cent to 150 pence a therm.
It comes amid a prolonged cold snap which has already sparked fears that the UK will run out of stored gas.
One gas trader remarked: ‘We’re certainly in super spike territory. The worrying thing is it can probably go higher.’
Interconnector UK (IUK) said in a statement yesterday that it had diagnosed the problem, which occurred at about 07:00 GMT, as being a failure of a water pump.
The company statement said: ‘We resumed flow at a reduced rate at 11:45 GMT and are monitoring the situation.
‘We are working to resume normal operations and a further update will be provided at 15:00 GMT.’
Meanwhile, some reports suggested that the unusual cold weather could lead to the UK running out of gas within days, but the government denied this.
In an attempt to assure users, a Department of Energy and Climate Change spokeswoman said:
‘Protracted cold weather increases demand, but the UK gas market is responsive and our gas needs are continuing to be met.
‘Gas storage would never be the sole source of gas meeting our needs, so it is misleading to talk purely about how many days’ supply is in storage.
‘We are in close contact with the National Grid, who are able to step into the market to source gas and increase incentives on gas suppliers if they think there is a risk of a supply shortfall.’
The National Grid said that normal demand in March was about 270 million cubic metres, while yesterday’s forecast for demand was 320 million cubic metres.
That is higher than normal but still well below the level that triggers a danger warning.
A National Grid spokesperson said the market was ‘responding positively’, claiming ‘there is plenty of gas available’.
However, energy analyst Joe Conlan from Inenco warned: ‘At present from our analysis, we cannot see a way the system could balance today as it is currently eight million cubic metres short, with no other storage able to be drawn on at present.
‘This may mean that large customers and consumers will be asked to turn down or turn off before the end of the day. More information will be issued if this is to happen.’
On Thursday, the boss of the energy firm SSE, Ian Marchant, had warned that there was ‘a very real risk of the lights going out’ in the UK, because the government was significantly underestimating the scale of the capacity crunch facing the country.
That call was echoed by Ignacio Galan, Chairman of Iberdrola and Scottish Power, who said of the Energy Bill ‘greater clarity of detail is needed if investment in new power stations is to be speeded up’.