Energylinx News

December 12, 2017

Gas prices rise after double blow exposes ageing infrastructure

Homes and businesses throughout the UK could be looking at a potential gas crisis this winter after a series of surprise outages sent gas prices surging - just as demand for heat reaches a high not seen in almost five years.

The last week has seen temperatures plummet and snow cover parts of the country. As the nation has had to turn the heating up, the announcement of the shutdown of the North Sea's most important gas pipeline system after a hairline crack was found, followed by an explosion at a major gas processing facility in Austria has caused chaos and disruption to gas supply across Europe.

Baumgarten Natural Gas Station Blast

An explosion and fire that ripped through Austria's main gas pipeline hub on Tuesday killed one person and injured at least 18 others.

News of the blast sent gas prices in Europe soaring on fears it would restrict supply as winter sets in.
Gas Connect Austria, which operates site, said the hub had been shut down but the blaze had been brought under control. The cause appeared to be a technical fault, it said.

"An explosion occurred this morning before 9:00 a.m. (0800 GMT) on the grounds of the Baumgarten Natural Gas Station," the company said. "The explosion caused a serious fire that has been contained to several small fires."

Oil prices climb as major pipeline shuts for repair to crack

The news of the explosion came hours after oil prices climbed to a new two-and-a-half year high after a major North Sea pipeline was closed for repairs.

Brent crude - which had already been trading around its strongest levels since summer 2015 - surged by 2% to just under $65 a barrel.

Forties pipeline, which carries 40% of North Sea oil and gas, is to be shut down for a couple of weeks while workers repair a crack.

In Britain, Europe's biggest gas market, gas for immediate delivery soared 40% to 95 pence per therm, a level not seen since 2013.

The supply fears lay bare the vulnerability of the UK's ageing energy infrastructure. However, a UK National Grid spokesman said there was sufficient gas supply to meet demand amid multiple outages. We'll be updating this story over the next few days.

Posted on December 12, 2017 at 03:00 PM