Gas Crisis: Gas Consumption Expected to peak over 390,000,000 cubic metres on 29th December - imports running too low - prices double

6.17.00pm GMT Thu 29th Dec 2005

Natural Gas Consumption on Thursday December 29th is expected to be at its highest so far for winter 2005/6 according to the Chairman of the Independent Energy Scrutiny Panel, John Hemming MP.

"National Grid's prediction at 4.12pm today was that demand for December 29th would be 392 mcm (million cubic metres). This will be the highest throughput so far during the winter of 2005/6. Yesterdays consumption was 370 mcm. This involved taking 38 mcm from Long Term Storage, 6 mcm from Medium Term and 3 mcm from the linkpack (pipes). Nominations from Centrica indicate that today more will be taken from Long Term Storage.", said Mr Hemming.

"The government's attempts to increase imports have failed. Only 18.6 mcm (206515.041 MWh) were imported from Belgium on Wednesday. National Grid's original assumptions were based upon 42 mcm/d, adjusted on 22nd Decmber to 30 mcm/d coming in on cold days via the Interconnector. The Isle of Grain LNG plant does look like it is almost hitting the Winter Outlook Assumptions, but figures will not be available until Friday for yesterday's movements via Grain."

"It is possible when the dust settles that today's gas day (which ends at 6am tomorrow morning) will involve more than 400 mcm. It remains, however, that an additional 22 mcm will need to be taken from storage on top of yesterday's figures."

"If he is not going to take action to deal with our gas supply problems then Malcolm Wicks needs to get out his prayer mat and pray for warm weather. The UK gas system's ability to cope with demand relies entirely on there being relatively mild weather. This cold snap will turn almost mild over the weekend. However, January is normally the coldest month."

"Current predictions from numerical models indicate that this may not be the end of cold weather. NOAA and Unisys are predicting that the North Atlantic Oscillation has turned negative. The US Global Forecast System control in the 06Z forecast is predicting cold weather towards the end of the first week of January. The UK Met Office synoptic charts are also hinting at high pressure over Scandinavia. Mr Wicks needs what is known as "a Bartlett" to save his job, this is looking less likely by the day."

"Local Delivery Zone consumption has swung from 209 mcm on 24th December to a probable 340 mcm today. That shows how extreme the swings are in consumption as the weather shifts. Direct connection to the NTS is remaining at around 50 mcm/d."

"If the weather moves in this direction then we will need some action from the government to avoid a situation in which the UK encounters electricity brownouts or blackouts."

"Gas prices have jumped with the weather from 1.2 p/kWh on Monday to 2.5 p/kWh yesterday."

ENDS

Sources of information: National Grid, Spectron, Centrica, IESP analysis