Saturday, March 11, 2006

Import into Storage - current status

The figures are available on the National Grid website which is good, but does not seem to fully reconcile. Some day I may talk to them about this to try to find out where the variations are.

The Country is currently in a position whereby the real risk of cold weather beyond that which the gas supply can cope with is being ignored by the formulae used to handle safety margins.

Furthermore certain assumptions built into determining when we should declare a gas imbalance are wrong. Hence last week when there should have been a gas balance alert declared it was not.

The final point is that there are no market forces which encourage people to import gas into storage. Noone wants to take unreasonable risks with their money so importing gas into storage does not happen in any real quantity. I raised this on Monday with Ofgem who indicated that they did not see this as a problem.

I look at it on the basis of a risk analysis. The risk for the country of having insufficient stored gas warrants a bit of insurance. The insurance is a premium for import into storage.

A further issue, of course, is that long term storage is offline and likely to stay so beyond the end of April. Not a predictable situation, but the country should never have all of its eggs in one basket.

During March a net 1,516 GWh has been withdrawn from Medium Term Storage taking it down to 2,713. 664 GWh has been taken from Strategic Short Term Storage taking it down to 1,044.

The 7 day average from Beach and IOG runs at a lowish 295 mcm/d.

Now it appears possible that the weather may turn coldish again.


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