Saturday, April 15, 2006

UK GAS

THE eight-year-old gas pipeline between Britain and Belgium emerges in the coastal town of Zeebrugge where, with barbed wire the only obvious sign of security, it is housed in a line of sheds and manned by a handful of staff.
The unassuming surroundings make the pipeline, known as the interconnector, an unlikely lifeline for Britain, but the country is becoming increasingly dependent on it.
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The interconnector, linking Zeebrugge with Bacton in Norfolk, was originally built to send gas from Britain’s North Sea fields to the gas-guzzling German market. But as supplies of Britain’s North Sea gas start to wane, it is beginning to flow the other way.
Britain, so long a net gas exporter, has become a net importer. We consume 113 billion cubic metres (bcm) a year, for both domestic and industrial use. About 64% comes from the North Sea and Irish Sea, and 9.4% through the interconnector, according to Ofgem, the energy regulator. Gas can also be drawn from Britain’s gas-storage sites or shipped in from overseas in liquified form.
The government estimates that about 90% of Britain’s gas comes from domestic sources and the rest is imported. Our reliance on gas imports will rise sharply after next year.
Imports through the interconnector and the newly opened LNG (liquified natural gas) terminal on the Isle of Grain in Kent have been well under capacity despite soaring demand this winter. The former has the potential to deliver 16.5bcm and the latter 4.5bcm.
British consumers have seen their energy bills soar, while industry has warned that it could face shutdowns due to lack of gas.
Ofgem has launched an inquiry into why the interconnector was not operating at full throttle despite strong demand from Britain. The pipeline, in which BG Group, Eni, Eon and Gazprom all have shareholdings, is sometimes only half full, said Ofgem.

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