British Gas owner says winter fuel supplies are uncertain:
Britain's biggest gas supplier has warned that the country faces an "uncertain" winter of potential energy shortages, contradicting a more upbeat assessment last week from the energy watchdog, Ofgem. Centrica, owner of British Gas, said new pipelines from Norway and the Netherlands coming on stream over the next couple of months would help, but the supply and demand situation would remain tough. "Doubts are still there. Yes, the new infrastructure will be there, but will the Europeans deliver gas through their infrastructure when it is needed?" said Bruce Walker, head of Centrica's gas storage division. Centrica officials said they neither agreed totally with Ofgem, nor with more alarming warnings from energy minister Malcolm Wicks. "We are somewhere in the middle," a Centrica spokesman said, with the company standing by previous statements that it was "hopeful" - if not completely confident - further domestic gas price rises could be avoided. Sir John Mogg, chairman of Ofgem, said last week he was "much more confident" that Britain would have sufficient gas this winter, due to the start of the Langeled and BBL pipelines. "Shortages are already seeming less of a threat," he added, following earlier warnings from Mr Wicks that rising gas consumption in the UK would cancel out extra supplies from Europe. Centrica, which will manage the Langeled import terminal at Easington in Yorkshire, is mindful that in previous years continental supplies have not arrived, as the Netherlands and others served their own markets first despite higher wholesale prices in Britain. The good news for the UK is that Centrica is weeks away from being able to call on supplies from western Europe's biggest single gas storage facility, Rough in the North Sea, which was knocked out of action in February by a fire. The field, representing 70% of UK's total storage, is capable of meeting 10% of peak winter demand and in theory could keep the country running for a week. The company has already filled up the offshore field to close to 90% of its capacity. John Meggitt, the offshore installation manager who has been supervising the repair work on Rough, said he was "110% confident" that it would be ready for use once a routine two-week shutdown had been completed next month. A range of gas suppliers and traders use Rough but Britain still has a relatively small cushion of stored supplies compared with others in western Europe. There were hopes that last winter would be the last of two difficult winters for the consumer, with shortages causing major increases in household prices. British Gas has already increased its prices by 37% this year while Powergen has raised its by 47%. Last week Ebico, which supplies power to 10,000 customers, increased its gas tariff by 30% - the biggest single rise so far. Energywatch, the consumer group, has agreed with Mr Wicks' downbeat forecast when he told a conference in Norway: "It's not going to be the easiest of winters, and we need to manage this with care and make sure we get it right. It's looking the same as the last two or three years." Backstory Britain has run into gas shortages and soaring prices for the past two winters as its own North Sea supplies ran down faster than expected. Supply deals have been signed with countries such as Norway and pipelines across the North Sea are due to be ready before the end of the year. But last winter existing links rarely operated at peak capacity, continental companies choosing to keep supplies for their own customers even though prices were higher in Britain. A number of liquefied natural gas terminals are being built but many will not be ready until next year at the earliest. 29.8.06