Wholesale natural gas costs have reached their highest levels across Europe since December last year, after major Norwegian export operations were shut down due to a cracked pipe.
The damage, discovered on board the Sleipner Riser platform, caused energy Infrastructure will be disrupted, including the Nyhamna processing plant, which exports gas to the UK, pipeline operator Gassco said.
Alfred Hansen, head of operations for the company’s pipeline system, told Reuters news agency: “This has major consequences from a supply point of view.”
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He added that while there were options to bypass Sleipner, they were time-consuming and not without risk.
There was no estimate of how long the fracture would take to repair.
The shutdowns affect deliveries to the Easington terminal, near the Humber Estuary – one of the UK’s six main import and storage facilities.
LSEG data showed a 10% jump in the UK contract for July delivery to 90p per therm following the announcement of the unplanned shutdown.
This price was last seen at the end of December last year.
It was a similar picture for the main European front-month contract, which also peaked in 2024 as deliveries to countries such as Germany also fell.
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Norway became Europe’s largest gas supplier in 2022, Russia faced international backlash for his invasion of Ukraine.
Prices have been volatile in recent weeks due to maintenance schedules in Norway coinciding with attacks on Russian infrastructure.
The immediate jump in prices could have been worse if the interruption had occurred in winter, the period of greatest demand.
Prolonged damage to imports, however, would impact energy costs for households and businesses heading into the winter of 2024/25.
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It wouldn’t be felt until at least September.
This is because UK regulator Ofgem announced last month that average annual bills under the energy price cap it would fall by more than £100 from July to September.
Although this level is fixed, limited increases are already expected for the two coldest three-month periods that follow.
A Gassco spokesman said: “We are working… with a repair plan and a plan of compensatory measures to deliver as much volume as possible to Europe.”
This story originally appeared on News.sky.com read the full story
