Royal Dutch Shell Plc  .com Rotating Header Image

Sunday Telegraph: Gas starts to flow in new pipeline from Norway

By Sylvia Pfeifer
(Filed: 10/09/2006)

A 750-mile pipeline from Norway will start delivering gas to Britain this week in what will mark the first new significant supplies in decades.

The Langeled pipeline, the world’s longest submarine gas pipe, runs from an export terminal in western Norway to Easington on the East Yorkshire coast. The operators will start a 15-day commissioning period this week to test the flow of gas, with commercial operations due to start on 1 October. From next year, the supplies will include gas from the new Ormen Lange field off northern Norway, and once fully commissioned the pipeline will provide about a fifth of the UK’s peak gas demand.
 
The new flow of gas will also help ease fears about supply shortages this winter. Wholesale gas prices for the fourth quarter of this year have recently fallen slightly from their record highs as traders started to bet that more gas will flow this winter from Norway and Holland.

Jake Ulrich, the managing director of Centrica Energy, which has a contract with Statoil to buy 5bn cubic metres of gas a year for 10 years, said: “As major gas import pipelines like Langeled move into operation, the UK can start turning the corner by accessing more diverse and plentiful energy supplies for this winter and the winters ahead. While some global uncertainty remains, the signals for increased optimism are starting to grow stronger.”

The pipeline is costing its partners, which include Statoil, Norsk Hydro, Royal Dutch Shell and ConocoPhillips, £1.7bn. Centrica operates the terminal at Easington, where the gas will enter National Grid’s transmission system.

More supplies are also expected to come from the BBL pipeline from the Netherlands, which is due to begin operations in December.

In addition, the interconnector to Belgium is being expanded again this winter to 63m cubic metres a day, up from 48m currently.

The more positive outlook for supplies this winter is expected to be underpinned by a report from Ofgem, the industry regulator, due to be published in the next two weeks. Ofgem’s preliminary report in May warned that there could be significant supply disruptions in the event of a tight winter.

“Since National Grid published their first forecasts in May, some of the uncertainty about this winter has reduced with the expansion of the interconnector pipeline and the Langeled pipeline coming on stream ahead of schedule,” said a spokesman. “The new link with Holland and the plans to bring in liquefied natural gas to Teesside are also currently on schedule.

“However, we have two key concerns. In the event of a very cold winter, gas supplies could still be tight. Also, if we have a mild winter and the new infrastructure is not fully used, this may also lead to tight gas supplies.”

Ofgem’s more positive stance on the winter outlook has contrasted sharply with that of Malcolm Wicks, the energy minister. Last month Wicks told an industry conference: “It’s not going to be the easiest of winters. It’s looking the same as the last two or three years.”

Industry executives also cautioned last night that this winter’s supply situation still depended on the gas actually flowing. Last winter the interconnector did not work at its full capacity, depriving Britain of much-needed supplies.
 

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Sunday Telegraph: Gas starts to flow in new pipeline from Norway”

Leave a Comment

%d bloggers like this: