The outage at the Kollsnes gas processing plant has sent the price of other available gas reserves soaring, and UK-stored gas volumes are drawn down.
As the “Beast from the East” gripped the UK today, the British wholesale gas price for immediate delivery has soared 146 percent to a new high of 190.00 pence per therm after high demand during the current cold snap, and an unfortunate outage in Norway.
Oliver Burdett from EnAppSys energy specialist told Express.co.uk that the price spike to £1.90 is “huge” but comes against a backdrop of UK gas prices rapidly rising since the beginning of the previous week.
On the outage in Norway, Mr Burdett said: ”It is not uncommon when severe weather hits North West Europe for certain gas fields or processing plants to fail, but usually only for a limited period in time.
On what exactly has happened in Norway Mr Burdett says that Gassco, the Norwegian state owned company that operates 7,800 kilometres of natural gas pipes, “are keeping tight-lipped”.
He said: “Since Kollsnes is a processing plant rather than purely a terminal – it naturally has a higher possibility of things going wrong.
“It could be a power outage or something far more complicated but it would be speculation until they announce anything further.”
A spokesperson from Gassco told Express.co.uk: “There are challenges related to the current extremely cold weather in Norway – as well as in the UK.
“Gassco is doing everything it can to overcome the difficulties and to ensure that customers experience minimal inconvenience.”
There could be more bad news on the horizon for UK residents.
EnAppSys warn that the market will be “tested severely” if cold weather sets in for any length of time as mid range storage working gas volumes are drawn down.
In short, if supply dwindles, prices will inevitably rise and that rise could well be passed on to the British public, especially for those on non fixed-priced energy tariffs.
Adding to the chilly misery, an energy supply watchdog has warned that the freezing conditions across the UK will add a whopping £26.6 million to the nations’ heating bills by the end of this coming week.
Victoria Arrington of Energyhelpline told Express.co.uk that as chilly Brits turn up the dial on their thermostat this week, a mere two-degree difference can lead to rocketing bills.
With gas now at its highest price for 10 years, the UK will spend an average of £3.8m more per day on heating this week, and the total cost to UK homes will be an astronomical £26.6 million.
Energyhelpline warn that even customers on the safeguarded tariff face the squeeze, as, while the price is capped per Kwh, the total cost of the bill is not. This means increased usage would raise bills despite government safeguarding measures.
Despite the rising prices, Victoria Arrington of Energyhelpline says that the most vulnerable must be encourage to keep the heating on.
She said: “It’s one of the coldest snaps we have seen so close to spring for many years. This week, it is especially important that we make sure that vulnerable people we know are keeping the heat on.
“Our research suggests 1 in 3 pensioners won’t turn up their heating due to cost, but this could be disastrous for their health and we strongly advise to keep the thermostat up during this bitter cold snap.
Ms Arrington advises switching to a fixed price energy tariff, adding, “this means you can lock in a good deal and won’t suffer from price increases for 12-24 months.
“Average annual savings of £300 mean that next winter customers will be much more secure when winter bites.”