Norwegian link set to drive down gas prices:
Winter gas prices are expected to fall further in coming weeks as the first shipments of Norwegian gas arrive in Britain through a new sub-sea pipeline. Completion of the British section of the 1,200km (745- mile) Langeled pipeline will further squeeze the price of wholesale gas on the forward market, adding pressure to gas retailers to bring down consumer prices. The price of gas for delivery this winter has fallen by almost a fifth over the summer to 66p per therm. Experts believe that Norway will deliver more gas than previously expected through the first phase of Langeled, which links Britain to Norway's offshore gasfields. The final link to the giant Ormen Lange gasfield will not be complete until late next year, but Norway is expected to be able to ship as much 70 million cubic feet per day this winter, about 15 per cent of typical UK peak winter demand.“It will be quite significant volumes,” Patrick Heren, publisher of the gas industry journal The Heren Report , said. “They have been de-bottlenecking, to switch to the UK a gas flow that is mainly directed towards Germany.” Further downward pressure on prices will come from the Netherlands, where Gasunie, the Dutch utility, this weekend confirmed that BBL, a new interconnector pipeline, would begin deliveries of gas on December 1. BBL will be able to supply 16 billion cubic metres per year, 16 per cent of current UK consumption, another key link in a massive network of supply. According to National Grid estimates, the total capacity being built in pipelines and liquefied gas terminals equals almost two thirds of current consumption. Mr Heren expects gas prices to fall further. “I am a big bear of this market,” he said. “I think it has a long way to go down.” 19.9.06