Gas prices hit record high after pipeline closure

WHOLESALE gas prices shot up today to hit a record high after a gas pipeline from Belgium shut down.

Gas prices for within-day delivery spiked at 150 pence per therm, more than 50 per cent above yesterday’s closing price, following the closure of the Interconnector pipeline linking Britain and Belgium that facilitates gas imports from Europe. A problem with the reheating system was blamed for the shutdown.

Interconnector UK said this afternoon that the problem had been rectified and normal operations had resumed. It was expected to flow at full capacity later this afternoon.

Gas flows through the Bacton terminal where the Interconnector arrives rose from zero to around 8m cubic metres per day just after midday, National Grid data showed today.

A spokeswoman for DECC said it was aware of the “temporary disruption”, but emphasised that the “UK gas market is functioning well and our gas needs are continuing to be met”.

“No matter how many wind turbines we build, Britain will need gas in large quantities for many years to come, for heating and industrial processes as well as electricity,” said Corin Taylor, senior economic adviser at the Institute of Directors.

“The failure of the interconnector is a stark warning. If we don't expand domestic gas production, we will be left exposed to potential supply shortages and more volatile prices. Shale gas could not come at a more vital time.”

The closure comes as the UK is grappling with a potential gas supply crisis as a longer winter depletes reserves, coal plants close and supply disruptions in Norway squeezes supply.