Gas flow to Britain slows despite high prices

Britain’s imports of liquefied natural gas have slowed almost to a standstill this year, adding to the pressure on domestic prices, which have already risen by at least 15%. The sharp fall in LNG imports is an embarrassment for the government after heavy spending on the infrastructure needed to boost shipments to compensate for dwindling gas supplies from the North Sea. It also follows a drop in the level of gas imports from continental Europe in spite of higher prices in Britain.

LNG is gas that has been converted to liquid to make it easier to transport. Imports over the winter are believed to be less than half of the previous year. The last LNG cargo to dock at the Isle of Grain terminal was at the end of January, though another shipment could arrive next week.


LNG is sold as an international commodity with cargoes traded on a global basis. The price is set internationally and Britain has to compete with countries such as Japan and South Korea that are heavily reliant on oil and gas imports and are prepared to pay accordingly.

Britain has spent heavily on building the necessary infrastructure – new LNG capacity is being built at Milford Haven, the world’s longest undersea pipeline, the Langaled pipeline, gives the UK access to one of Norway’s biggest gas fields and Britain now has access to continental European supplies through a pipeline to the Netherlands as well as the Belgian interconnector. But as Paul Golby, chief executive of E.ON UK, notes, building the infrastructure does not necessarily mean Britain will always get the gas it needs.

“I think there has been a little naivety about gas infrastructure – an assumption that if the metal is there, the gas is going to flow,” he said. “That does not follow.”

Guardian