- July 18th, 2014
UK’s Rough gas storage could be full by end of August
Easington Rough, the UK’s largest gas storage facility could be full by the end of August if recent injection rates are maintained, an analysis of National Grid data showed Friday.
The UK’s only long-range storage facility, with a capacity of about 3.7 billion cubic meters, has 3.3 Bcm of gas in stock, or 88% of capacity, the highest stock level for this time of year for over four years.
The current injection rate which is an average 18.83 million cu m/day would see Rough at 100% capacity by 4th August. However, this is unlikely because it becomes harder to inject gas into Rough with pressure building as it fills. A more likely scenario would be injection rates tapering off as Rough nears capacity, something seen in both 2011 and 2012 in the same situation.
If Rough were to follow the same injection rates as in 2012 when a mild winter led to a storage overhang during that summer, then the facility would be full on August 25, much earlier than in previous years and which could keep gas demand subdued this September and October.
This year is vastly different from 2013 when the third coldest March on record depleted Rough’s reserves, forcing it to send out cushion gas which is permanently kept in storage facilities to maintain pressure into the system to manage the big rise in gas demand at the time.
Rough gas stocks, according to National Grid data for early April 2013, were below zero to account for the cushion gas that was sent out — for several days, leading to the facility having to inject a record amount of gas last summer.
Rough gas stocks have not fallen below 42% this year, a level that was not reached until late June last year.
Indeed, Rough only reached 92% capacity last November before withdrawals were needed as winter gas demand kicked in.
The large storage overhang from the Winter 2013 period has been one of the main contributing factors to the fall in wholesale gas prices this year. Day-ahead gas prices averaged 52.67 pence/therm in the first six months, down 24% from 69.72 p/th in the 2013 period.
Furthermore, the Winter 2014 gas contract is trading below the 55 p/th mark and close to its record low, whereas it was assessed by Platts above 70 p/th during July 2013.