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    Reuters: Options dwindle for UK facing winter tied to tight Norway gas

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Summary

UK at risk of price spike as Norway's exports are reduced. Continental Europe to take more gas from Russia. UK spot prices could rise above Russian oil-linked contracts.

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Press Notes

Reuters: Options dwindle for UK facing winter tied to tight Norway gas

Britain faces a tight winter gas season as it relies heavily on struggling Norwegian supplies and has few alternatives to source cheap gas elsewhere.

Britain already relies heavily on Norwegian imports to meet its needs and analysts say this dependency is set to rise as Russian gas will mainly go to continental Europe, while shipments of overseas liquefied natural gas (LNG) will mostly head to Asia, where customers pay more for gas.

The new gas year starts on October 1, when European gas buyers and sellers adjust supply volumes ahead of the peak demand winter heating season.

But Norway's biggest gas field Troll, which accounts for around 35 percent of its gas production, has had its capacity reduced for much of this year, and its operator says supplies will be limited until 2014.

"We expect to see somewhat reduced capacity into the winter at the Troll field due to technical issues at Troll A," said Morten Eek of the field's operator Statoil, adding that its remaining capacity would still allow the company to "more or less" meet production quotas.  MORE