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    British gas grid operator eyes capacity boost for LNG


There are some bottlenecks in the onshore pipeline system.

by: William Powell

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British gas grid operator eyes capacity boost for LNG

The British national transmission system (NTS) will be able to cope with gas demand again this summer as power-generation demand will be lower than last year and some industrial consumers have turned down output over the years. And heating demand is anyway lower.

But the onshore grid might need boosting in the west of the country as the two major LNG terminals there – South Hook and Dragon LNG in Wales – have been flowing close to maximum and the grid was built primarily to handle North Sea production, which is landed on the east coast, operator National Grid said in its 2021 Summer Outlook, published April 8.

"Due to a combination of the domestic gas market being commercially attractive at peak times of the year, and the strong global production of LNG, we believe the trend of high LNG supplies to GB is likely to continue. To manage both this and the need for long-term network flexibility and reliability, we are looking to invest in infrastructure in the western area of the NTS," it said. This will be managed through volume commitments from shippers.

"In 2019 we observed an increase in the volumes of gas being delivered by both terminals, and more days on which flows approached maximum capability. This was repeated in 2020 and is expected to continue this summer. During periods of near maximum flow, the use of commercial tools alongside physical assets are used to keep the network within safe operating limits. This puts extra reliance on key infrastructure and therefore any short-term asset unavailability – as can be experienced over the summer maintenance period – requires the use of commercial options to maintain the network operating within these limits," it said. These options include entry capacity buy-backs where shippers surrender their rights to land gas, as a cheaper alternative to laying more pipeline.

However it is expecting less LNG imports this year (5.7bn m³ equivalent) than the previous two summers, owing to competing markets for LNG, it said. Last year's import surge to 7.1bn m³ drove down imports from Norway, which are expected to fill the gap this year.

Export demand – to Ireland and continental Europe is forecast a little higher however: European storage stocks are lower than observed this time last year, while exports to Ireland are expected to be 2.5bn m³, up from last year's 2.2bn m³ as the Corrib field decline continues.

Total NTS demand for the April 1-September 30 period is forecast at 32.4bn m³, comparable to last year's 33.5bn m³. The growth in renewables and the commissioning of a new electricity interconnector reduces demand for generation to 7.9bn m³, continuing the decline from 11.6bn m³ in 2016. But while declining, demand in this category can still fluctuate based on the weather and market conditions, said National Grid.