UK gas prices at the National Balancing Point rocketed Wednesday on news that a large Norwegian field would be out of action for an undetermined length of time due to a pipeline leak, traders said. Winter 08 jumped an impressive 10 p to trade at 100 p/therm, before easing back a touch to 98.5 p/th by midday London time (11:00 GMT). Norway’s StatoilHydro said Wednesday that it had discovered a leak on the Kvitebjorn pipeline, and would have to shut the line pending repairs. The pipeline takes gas from the Kvitebjorn and Visund fields, and gas production from both would have to halt until repairs are complete. The fields were already offline Wednesday, because the Kollsnes processing facility that their gas production feeds into started its summer maintenance outage over a week ago. That also shut in gas production from the giant Troll field, which should be unaffected by the Kvitebjorn leak. But that outage is expected to end in the coming days.

The pipeline outage removes around 25 million cubic meters/day of Norwegian gas production, although the two fields rarely produce at full capacity. The bulk of that comes from Kvitebjorn, which can produce at around 20 million cu m/d. Traders said Wednesday that the outage could last through to the first quarter of next year, although the operator said the length of the outage was uncertain. That possibility had driven prices markedly higher, but the move was exacerbated by shorts being stopped out, traders said. One trader said that the market also seemed to have panicked, and may settle back down as the true impact of the outage becomes clear.

As well as Winter 08 jumping, Summer 09 was up 4.7 p to 84 p/th by noon, and Winter 09 was up 4.1 p to 101.5 p/th, despite the outage likely having no impact on supplies that far out. Several traders questioned whether the impact would in fact last as long as the winter, with one trader reporting seeing Norwegian producers buying the October contract but nothing beyond that.

October itself jumped just under 10 pence to hit 78.5 p/th by 12:00, and September was up 6 p to 58.25 p/th. Smaller moves were seen closer in, with working days next week up only 3 p, at 51.5 p/th, and the weekend up 4 p, at 55.5 p/th.

And despite the outage having no material impact on prompt supplies, given that the fields were already due to remain offline for a few days more, the near prompt also jumped on the news. Within-day was up 1.25 p to 56.25 p/th by midday, and day-ahead was up 2.25 p to 56.95 p/th. The prompt jump may also have reflected the fact that the system was fairly tight Wednesday, however. National Grid data showed demand at 218.7 million cubic meters/day at 11:00, 31.3 million cu m/d below seasonal norms, and a step up from the previous session. The system was fairly short at that time, by 8.2 million cu m.