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Partial shutdown at gas platform, storage site outage drive prices higher

Published 30/01/2017, 11:50
© Reuters.  Partial shutdown at gas platform, storage site outage drive prices higher
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(Reuters) - British wholesale gas prices rose on Monday as a partial shutdown of the Elgin-Franklin platform in the North Sea and an extended outage at a gas storage facility tightened supplies, traders said.

The day-ahead contract rose by 1.65 pence to 53.00 pence per therm by 1137 GMT, lifted by concerns over gas supplies filtering through into contracts across the near and forward curve.

Gas for immediate delivery was up 0.75 pence to 53.50 pence per therm.

Early on Monday, Total E&P reported that offshore reduction had tripped at its Elgin-Franklin gas platform in the North Sea.

"Offshore production has tripped... On restart production will be limited to five million cubic metres/day for an unknown period," Total UK Exploration and Production said in a market message.

A company spokesman told Reuters that the Elgin B and West Franklin platforms had been shut down after difficulties drilling a well, but Elgin A and Franklin were unaffected. [GAS/OUT]

Further tightening supply was Centrica's announcement that an outage reducing withdrawals from Britain's largest gas storage site Rough would be extended by a month until March 1.

An unplanned outage at SSE's Hornsea gas storage site will also reduce withdrawal capacity until Feb. 3, the SSE (LON:SSE) said.

Britain faced a gas shortfall of 26.1 million cubic metres (mcm) on Monday, with demand estimated at 316.1 mcm/day and supplies at 290.7 mcm/day, according to National Grid (LON:NG) data.

"Sentiment has fed through into the near curve which has seen prices further supported by the extension to the Rough outage," said Nick Campbell, risk manager at Inspired Energy.

Average temperatures in Britain are milder than expected on Monday but forecasts for Tuesday and next week indicate colder- than-anticipated weather, according to Thomson Reuters analysts.

In the Netherlands, the day-ahead gas price at the TTF hub  was up 0.65 euro to 20.35 euros per megawatt hour.

In the European carbon market, the benchmark Dec-17 contract  was 0.22 euro higher at 5.14 euros a tonne.

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