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Financial Times: Shell says plant fire will not stop supplies

By Rebecca Bream
Published: March 1 2008 03:01 | Last updated: March 1 2008 03:01

Shell was unable to say on Friday when its Bacton gas processing terminal – which handles about 10 per cent of the UK’s supply – would be back up and running following a huge fire on Thursday night.

However, the company insisted there would be “no detrimental effect” on the security of the nation’s gas supplies.

It said the BBL gas pipeline from the Netherlands and the gas interconnector with Belgium, which both come into the Norfolk terminal, were unaffected by the blaze.

The fire started just after 6pm in Shell’s waste water system, but was soon extinguished and none of the 46 staff was injured.

Shell reopened its Bacton Seal gas terminal on Friday, which had been closed for maintenance, helping to mitigate any gas shortages caused by the fire at its main Bacton facility.

Centrica, owner of British Gas, said that higher-than-usual amounts of gas were being pumped out of its Rough gas storage facility in the North Sea, which also helped make up the short fall.

“National Grid has confirmed there is more than enough supply coming into the country from all the various sources,” said Shell.

It added: “National Grid is confident there will be no detrimental effect on security of supply. Only the Shell terminal at the Bacton site is affected.”

Gas prices in the wholesale market spiked on Friday morning as traders tried to assess the impact of the fire, with gas for same-day delivery, jumping as much as 19 per cent to 62p a therm, the highest level since 2006.

But prices fell back after Shell reassured the market that there would be no shortage of gas, to 54.9p a therm, about 5 per cent higher than prices on Thursday.

Traders said that prices could stay relatively high if the Shell terminal did not reopen soon, and if cold weather persisted and boosted demand for central heating.

Copyright The Financial Times Limited 2008

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