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Bloomberg: U.K. Gas Falls as Demand Drops, Supplies Expected to Increase

By Nicholas Larkin

Oct. 12 (Bloomberg) — U.K. natural-gas prices for today fell as forecasts showed demand for the fuel will fall short of supplies and as Royal Dutch Shell Plc said it will start its North Sea Goldeneye field this afternoon.

Gas for same-day delivery dropped 10 percent to 37.25 pence a therm as of 10:55 a.m. London time, according to prices on Bloomberg from the broker Spectron Group Plc. That’s equivalent to $7.60 a million British thermal units. A therm is 100,000 Btus.

Expected demand for the fuel in the 24 hours through 6 a.m. tomorrow was forecast at 238 million cubic meters, according to information updated at 10:06 a.m. today on a Web site run by National Grid Plc, the manager of Britain’s gas pipeline network.

That’s lower than demand of 268 million cubic meters yesterday and 8 million cubic meters less than today’s expected supplies, the Web site showed.

Supplies of the fuel on to the grid were at a rate of 255.8 million cubic meters a day as of 10:55 a.m., flow data from National Grid on Bloomberg show.

Royal Dutch Shell Plc said it will start its Goldeneye North Sea field this afternoon following a halt on Oct. 4 caused by an equipment failure. The field delivers fuel to St. Fergus in Scotland.

Gas flows to the U.K. from Norway’s Statfjord field through the Tampen Link are now expected to start by the end of the week, StatoilHydro ASA, which holds a 44 percent interest in the field, said today. The Tampen Link, originally scheduled to start operations on Oct. 1, was delayed because of bad weather and technical problems.

Belgian Exports

Gas for November delivery was little changed at 44.80 pence a therm, Spectron showed.

Exports to Belgium via a pipeline from England were forecast at 25.7 million cubic meters today, compared with 18.2 million yesterday, according to the pipeline’s operator, Interconnector (U.K.) Ltd.

Gas for delivery on Oct. 15 at Zeebrugge in Belgium was unchanged at 40.65 pence a therm. Next-working-day gas at the Dutch Title Transfer Facility increased 1.8 percent to 19.40 euros a megawatt hour, equivalent to $8.06 a million Btus or 39.76 pence a therm.

To contact the reporter on this story: Nicholas Larkin in London at [email protected]

Last Updated: October 12, 2007 06:31 EDT

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