Offshore staff
LONDON – As gas prices continue to surge due to the global supply shortage, the UK should focus on maintaining its own production from the North Sea, according to industry association Oil & Gas UK (OGUK).
Earlier this week wholesale gas prices rose 37% in one day, reaching £4 ($5.44) per therm in short-term global markets (or $1.92/cu m). This is a 700% increase on typical levels at the start of 2021.
Causes include Russia’s decision to cut gas deliveries to the EU via its Belarussian pipelines by 70%, and high global demand for LNG, particularly in Asia.
Output from UK North Sea and East Irish Sea gas fields, meanwhile, continue to fall, with too few new fields under development, OGUK pointed out. So, compared with 2004, when the UK was self-sufficient in gas, today indigenous supplies only account for half of its gas needs.
In 2020, the association added, Britain consumed 74 bcm of gas, with half imported from countries including Norway, Qatar, Russia, Trinidad and Tobago, Egypt, and Nigeria.
Later this month, OGUK’s Energy Transition Outlook will warn that the reliance on outside sources will increase unless investments increase in the UK’s known gas resources. Without new commitments, UK gas output looks set to dip by a further 75% by 2030.
Deirdre Michie, chief executive, said: “The UK and our industry are on a journey to achieve net zero emissions by 2050.
“We fully support this goal, but 23 million UK homes are still heated by gas which also generates 40% of our electricity, so we will need gas to power us through this green transition. It would be far better to get as much of that gas as possible from sources we can control rather than rely on other countries.”
10/07/2021
