LONDON (Thomson Financial) - A consultation by the National Grid on the UK's winter gas and electricity supply has forecast possible problems in attracting liquified natural gas (LNG) because of higher prices overseas, while gas from Norway may be diverted to the continent, according to UK energy regulator Ofgem.
A failure to attract LNG could be coupled with Norwegian producers diverting extra flows of natural gas to mainland Europe through the Langeled pipeline, as happened in winter 2007-2008, Ofgem said.
The UK increasingly has to compete with Europe and other countries such as Japan for LNG, as prices abroad are traditionally higher.
The regulator forecast an increase in gas import capacity if two LNG terminals in south Wales are completed on schedule. The existing Isle of Grain LNG terminal is due to be expanded for this winter.
In electricity, National Grid said supplies will be able to meet demand during the winter and that there will be a spare capacity margin of 26.8 per cent, which it is says are higher than in recent years.
Ofgem's final report will be published in the last week of September.
julian.hofmann@thomsonreuters.com
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