UK Grid Relaxed About Summer Gas

British gas and power transmission systems operator National Grid said in its Summer Outlook that gas supply will be sufficient to meet national demand this summer.

The figures in the April 16 document have been overtaken by events, as it was compiled before the coronavirus outbreak and "therefore do not take into account the impact of the measures put in place by the UK government, nor the actions taken by wider society such as working from home."

But as these measures will only dampen demand thanks to industrial facilities and business premises taking less, the position looks even stronger, it says. 

For the same reason, Grid told NGW, it did not make any allowance for a major offshore outage owing to Covid-19: about half UK gas demand comes from the continental shelf (UKCS), although some is also exported, and other country's gas is imported. So far there has been some evacuations of rigs in both the Norwegian and UK sectors.

The total volumes look similar to 2019, with a small increase in exports to Europe. Gas demand for electricity generation has reduced compared to volumes for the previous four summers. The anticipated impact of Covid-19 on the UK network was for demand to drop significantly below seasonal norms. 

It says that upstream organisations are reviewing their maintenance plans for the summer in light of Covid-19 but it is not expected that this will affect supplies to the UK. Should disruptions be realised there is sufficient availability from other diverse sources to maintain security of supply. UKCS and Norway continue to be the UK’s main sources of supply over the summer, although slightly lower than 2019’s volumes (down to levels seen in 2014 and 2015) due to the stronger LNG market. This is expected to continue into the summer 2020.

"Forecasts for LNG predict that supplies could be higher for 2020 compared to 2019 (6.7bn m³ compared with 6.0bn m³). Combined with high UKCS and Norway flows, this would result in plentiful supplies to meet demand," the operator says. "The annual summer uptake in LNG demand from Asia is expected to be less than 2019, resulting in continued higher flows to the UK. Compared to previous years, we are expecting a similar level of gas cycling into and out of MRS sites this summer."

It said it did not expect export capacity at BBL to materially affect the volumes of gas exported to Belgium and the Netherlands, as it does not in itself create additional surplus demand. And it said: "No firm capacity for the interconnectors has been purchased for this summer, with more flexible interruptible capacity anticipated to be used. We have seen no impact on interconnector flows resulting from UK’s exit from the EU in January 2020."