{"id":485437,"date":"2010-03-29T09:47:00","date_gmt":"2010-03-29T13:47:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/how-close-will-the-uk-come-to-running-out-of-natural-gas-in-storage-this-spring-2010-3"},"modified":"2010-03-29T09:47:00","modified_gmt":"2010-03-29T13:47:00","slug":"the-u-k-is-about-to-run-out-of-natural-gas-storage","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/485437","title":{"rendered":"The U.K. Is About To Run Out Of Natural Gas Storage"},"content":{"rendered":"<p><em>(This post by Rune Likvern appeared on <a href=\"http:\/\/europe.theoildrum.com\/node\/6329\">The Oil Drum<\/a>. He is an <a href=\"http:\/\/www.petrovalue.no\/\">independent energy adviser<\/a> from Norway.)<\/em><\/p>\n<p>Compared to previous years, this heating season in the U.K. has  called for record withdrawals of natural gas from U.K. storage to  balance demand. This drawdown will result in increased demand for  natural gas for refilling of the U.K. storage facilities this  spring\/summer.<\/p>\n<p>Apart from a colder than normal winter, a considerable contributor to  the growing use of storage withdrawals to balance demand this winter  has been an accelerated decline rate in indigenous U.K. marketable  natural gas supplies&#8211;recently as high as 17% on an annual basis.<\/p>\n<p>The decline rate and colder weather have also contributed to a  noticeable growth in U.K. LNG (Liquefied Natural Gas) imports and a  decline in natural gas supplies sent from the U.K. to Continental  Europe. This pattern of  increasing LNG imports and declining exports to  Continental Europe is expected to continue.<\/p>\n<h2><a href=\"http:\/\/www.businessinsider.com\/how-close-will-the-uk-come-to-running-out-of-natural-gas-in-storage-this-spring-2010-3\/early-withdrawals-have-eaten-away-at-gas-storage-1\">See evidence of the UK gas storage shortage &gt;<\/a><\/h2>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/oil-is-a-snooze-the-energy-world-is-totally-obsessed-with-natural-gas-2010-3\">Oil Is A Snooze, The Energy World Is Totally Obsessed With Natural Gas<\/a><\/li>\n<\/ul>\n<h2>Early withdrawals have eaten away at gas storage<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb09da87f8b9a2026210200-400-300\/early-withdrawals-have-eaten-away-at-gas-storage.jpg\" alt=\"Early withdrawals have eaten away at gas storage\" border=\"0\" class=\"slide-image\" \/><\/div>\n<h4>U.K. STORAGE DEVELOPMENTS<\/h4>\n<p>The availability of natural gas from storage facilities adds needed  flexibility to the supply system, since pipeline  and LNG sources do not  match up well with daily demand.<\/p>\n<p>The U.K. storage system has 3 classes of storage facilities: LRS  (Long Range Storage), MRS (Medium Range Storage) and SRS (Short Range  Storage). Simultaneous operation of these facilities can add 120 + Mcm\/d  to the supply.<\/p>\n<p>For the contractual year 2009 <em>(which started October 1st 2009 and  ends October 1st 2010)<\/em> increased use of storage withdrawals has been  used to balance demand. At present, it looks like the minimum amount in  storage will be 400 Mcm (or about 10 % of total working natural gas in  storage, or about 1 day of present total U.K. consumption). This level  may be tested, if there is another cold snap.<\/p>\n<p>April of 2008 (Contractual Year 2007) saw a cold snap that resulted  in storage withdrawals of around 200 Mcm.  The most recent weather  forecasts indicate colder weather than seasonal averages for early  April, so this could happen again. This could call for further storage  withdrawals and thus delay the start of meaningful storage injections.  Right now, as documented in the diagram above, U.K. working natural gas  in storage is more than 800 Mcm lower than the same time last year.<\/p>\n<p><\/p>\n<h2>Withdrawals from storage increased each year<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb09e6c7f8b9af868d10a00-400-300\/withdrawals-from-storage-increased-each-year.jpg\" alt=\"Withdrawals from storage increased each year\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p>The diagram above illustrates that the trend over the recent years  have been increased use of storage withdrawals to balance U.K. demand.  It should come as no surprise if U.K. total natural gas storage capacity  becomes subject to more demanding tests in the near future.<\/p>\n<p>Figure 02 also illustrates that between December 1st 2009 and now,  net storage withdrawals have been around 1 300 Mcm higher than in the  two previous years.<\/p>\n<p><\/p>\n<h2>Here&#8217;s this year&#8217;s gas withdrawals. Spring will give a brief respite.<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb09ee37f8b9a1f20b70000-400-300\/heres-this-years-gas-withdrawals-spring-will-give-a-brief-respite.jpg\" alt=\"Here's this year's gas withdrawals. Spring will give a brief respite.\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p>The need for storage withdrawals seems very much to be weather driven  and, as spring approaches, the need for natural gas fired heating can  be expected to decline.<\/p>\n<p><\/p>\n<h2>But long range storage is at record lows<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb09f6d7f8b9a4b20020000-400-300\/but-long-range-storage-is-at-record-lows.jpg\" alt=\"But long range storage is at record lows\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p><\/p>\n<h2>Medium range supplies were lowest in 2009<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb09fbb7f8b9ad91f800200-400-300\/medium-range-supplies-were-lowest-in-2009.jpg\" alt=\"Medium range supplies were lowest in 2009\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p><\/p>\n<h2>Short term supplies are now routinely low<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb09fe27f8b9ab173210000-400-300\/short-term-supplies-are-now-routinely-low.jpg\" alt=\"Short term supplies are now routinely low\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p><\/p>\n<h2>The UK was withdrawing gas all summer long, when they were supposed to be refilling storage<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb0a11c7f8b9ad51edb0600-400-300\/the-uk-was-withdrawing-gas-all-summer-long-when-they-were-supposed-to-be-refilling-storage.jpg\" alt=\"The UK was withdrawing gas all summer long, when they were supposed to be refilling storage\" border=\"0\" class=\"slide-image\" \/><\/div>\n<h4>STORAGE REFILLING<\/h4>\n<p>Most of the injection\/refilling seems to happen prior to August each  season. The reason for lowered injections during August and September  (apart from the fact that the storage tanks are by then mostly refilled)  may be that the refilling program is coordinated with the annual  maintenance programs for the offshore production installations.<\/p>\n<p>Earlier in the post, I mentioned that this spring\/summer, U.K.  storage refilling will require around 800 Mcm more natural gas relative  to the two previous years and refilling will start later. This calls for  higher daily injection volumes and\/or an extended refilling period.<\/p>\n<p>The <a href=\"http:\/\/feedproxy.google.com\/how-close-will-the-uk-come-to-running-out-of-natural-gas-in-storage-this-spring-2010-3\/early-withdrawals-have-eaten-away-at-gas-storage-1\" >first slide<\/a> illustrates that storage facilities have  reached around 90 % filling by end of August in each of the years  shown.<\/p>\n<p>During April and May 2009, injection averaged around 25 Mcm\/d and  declined to around 20 Mcm\/d during June and July 2009.<\/p>\n<p>The diagram illustrates that during August and September, where the  Interconnector (Bacton &#8211; Zeebrugge) normally is down for annual  maintenance, natural gas injections for storage are low, and  occasionally there are storage withdrawals.<\/p>\n<p>Declining indigenous supplies, the higher need for refilling, and  scheduled maintenance of the production installations suggest that LNG  imports may need to be 30 &#8211; 50 Mcm\/d higher this coming August\/September  that they were in the same months of 2009.<\/p>\n<p><\/p>\n<h2>On an average winter day, imports are now greater than U.K. domestic supplies.<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb0a23f7f8b9a4d1d240d00-400-300\/on-an-average-winter-day-imports-are-now-greater-than-uk-domestic-supplies.jpg\" alt=\"On an average winter day, imports are now greater than U.K. domestic supplies.\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p>At the present time, it is expected that natural gas imports from the  Netherlands and Norway will remain at approximately level for the next  few years. How then should the decline in indigenous production be  replaced?  Continental European countries are also experiencing a  general decline in natural gas production, so the only  sources of  meaningful additional supply seem (based on current knowledge) to be LNG  and Russian gas coming by pipeline through the Interconnector.<\/p>\n<p><\/p>\n<h2>&#8220;The Elephant In The Room&#8221; is the YOY decline in supplies<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb0a2e87f8b9a591f260600-400-300\/the-elephant-in-the-room-is-the-yoy-decline-in-supplies.jpg\" alt=\"&quot;The Elephant In The Room&quot; is the YOY decline in supplies\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p>A major contributor to the steep increase in U.K. natural gas imports is  the accelerating decline rates with respect to U.K. marketable natural  gas supplies. Marketable natural gas supplies means natural gas that  arrives at end users&#8211;that is, gross production adjusted for producers  own use, operators own use and metering differences, etc.<\/p>\n<p>From January 2009 to January 2010, U.K. marketable natural gas  supplies declined from 199 Mcm\/d to 158 Mcm\/d. The steep annual decline  rate is the proverbial &ldquo;elephant in the room&rdquo;.<\/p>\n<p>Based upon data for U.K., proven natural gas reserves as of end 2008  the R\/P (Reserves divided by Production) ratio has been estimated at 4,3  as of end 2008 and as of end 2009 preliminary estimates for R\/P results  in a similar ratio. This suggests that annual decline rates of 15 &#8211; 20 %  for U.K marketable production should be expected for the near future.<\/p>\n<p><\/p>\n<h2>UK exports natural gas in the summer, but that is about to change.<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb0a3d67f8b9ab173c60200-400-300\/uk-exports-natural-gas-in-the-summer-but-that-is-about-to-change.jpg\" alt=\"UK exports natural gas in the summer, but that is about to change.\" border=\"0\" class=\"slide-image\" \/><\/div>\n<h4>THE INTERCONNECTOR (Bacton &#8211; Zeebrugge)<\/h4>\n<p>Continental Europe and U.K. have mutually benefited from the  bidirectional Interconnector between Bacton and Zeebrugge. For the  period 1998 to 2004, this allowed U.K. to be a net exporter of natural  gas to Continental Europe. Recently the Interconnector has allowed for  U.K. exports during the summer and imports during the winter as  illustrated in the diagram below.<\/p>\n<p>One of the effects from the aggressive decline rates are that the flows  between Continental Europe and U.K. are about to change. As the diagram  above illustrates, natural gas has mainly flowed from Continental Europe  to U.K. this winter. With continued decline in U.K. indigenous natural  gas production, it may now be expected that the Interconnector in the  near term will supply U.K. with natural gas most likely ultimately from  Russia.<\/p>\n<p><\/p>\n<h2>UK natural gas exports are down 3 billion cm since October<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bb0a4747f8b9a7520f80200-400-300\/uk-natural-gas-exports-are-down-3-billion-cm-since-october.jpg\" alt=\"UK natural gas exports are down 3 billion cm since October\" border=\"0\" class=\"slide-image\" \/><\/div>\n<p>So far this Contractual Year (as between October 1st 2009 and March  24th 2010), approximately 3 Gcm (Bcm) <em>less<\/em> natural gas has flowed  from U.K. to Continental Europe.<\/p>\n<p>Inasmuch as Continental Europe&rsquo;s natural gas production has been in  general decline in recent years, one might expect this decline to give  rise to a similar additional amount of natural gas imports, mainly from  Norway and\/or Russia into Continental Europe.<\/p>\n<p><\/p>\n<h2>Now don&#8217;t miss&#8230;<\/h2>\n<p><div class=\"image-container slide-image\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b6c8d580000000000b4cb12-400-300\/now-dont-miss.jpg\" alt=\"Now don't miss...\" border=\"0\" class=\"slide-image\" \/><\/div>\n<h2><a href=\"http:\/\/www.businessinsider.com\/the-15-oil-and-gas-pipelines-changing-the-worlds-strategic-map-2010-3\">The 15 Oil &amp; Gas Pipelines That Are Changing The World&#8217;s Strategic Map &gt;&gt;<\/a><\/h2>\n<p><a href=\"http:\/\/www.businessinsider.com\/how-close-will-the-uk-come-to-running-out-of-natural-gas-in-storage-this-spring-2010-3#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><a href=\"http:\/\/feedads.g.doubleclick.net\/~at\/NKzFsYf6qw9TuhNOUovd1IGsRxU\/0\/da\"><img decoding=\"async\" src=\"http:\/\/feedads.g.doubleclick.net\/~at\/NKzFsYf6qw9TuhNOUovd1IGsRxU\/0\/di\" border=\"0\" ismap=\"true\"><\/img><\/a><br \/>\n<a href=\"http:\/\/feedads.g.doubleclick.net\/~at\/NKzFsYf6qw9TuhNOUovd1IGsRxU\/1\/da\"><img decoding=\"async\" src=\"http:\/\/feedads.g.doubleclick.net\/~at\/NKzFsYf6qw9TuhNOUovd1IGsRxU\/1\/di\" border=\"0\" ismap=\"true\"><\/img><\/a><\/p>\n<div class=\"feedflare\">\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?a=947nBorP7gI:Jb-FnHfa3Pg:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?a=947nBorP7gI:Jb-FnHfa3Pg:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?i=947nBorP7gI:Jb-FnHfa3Pg:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?a=947nBorP7gI:Jb-FnHfa3Pg:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?i=947nBorP7gI:Jb-FnHfa3Pg:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?a=947nBorP7gI:Jb-FnHfa3Pg:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?a=947nBorP7gI:Jb-FnHfa3Pg:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/greensheet?i=947nBorP7gI:Jb-FnHfa3Pg:gIN9vFwOqvQ\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/greensheet\/~4\/947nBorP7gI\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This post by Rune Likvern appeared on The Oil Drum. He is an independent energy adviser from Norway.) Compared to previous years, this heating season in the U.K. has called for record withdrawals of natural gas from U.K. storage to balance demand. This drawdown will result in increased demand for natural gas for refilling of [&hellip;]<\/p>\n","protected":false},"author":3226,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-485437","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/485437","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/3226"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=485437"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/485437\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=485437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=485437"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=485437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}