Gas shortage threatens blackouts this winter, warns Tullow

One of the operators of Britain's biggest gas terminal warned yesterday that there was a good chance of the country being hit by blackouts this winter because of a shortage of gas.

Tullow Oil, which operates one of the three terminals at Bacton on the East Anglian coast, said that in the event of a prolonged cold snap, the UK would probably not be able to land enough gas to keep gas-fired power stations in operation.

Bacton handles about a quarter of the UK's gas, processing supplies brought onshore from the southern North Sea and an interconnector from Zeebrugge, Belgium.

Aidan Heavey, the chief executive of Tullow, said: "A lot of people think there will be blackouts this winter and next. I think there is a good chance of that happening."

He said that apart from there being a physical shortage of gas, the UK's gas storage facilities were also inadequate. The UK has the capacity to store about 15 days' worth of gas whereas continental countries have the capacity to store enough gas to last 50 or 60 days.

More than half the UK's gas is used to keep domestic central heating systems burning. "It is very difficult to turn that off. If there is a shortfall then supplies to power stations will have to be cut," Mr Heavey said.

There are five terminals at Bacton, including one run by National Grid Transco which links the gas landed there to the national gas transmission system. Tullow's terminal, processing gas brought ashore from the Hewitt field, handles about 3 per cent of total UK supplies.

Tullow said it was examining the feasibility of developing a storage facility for the Hewitt field similar to the Rough storage facility owned by Centrica, the parent company of British Gas. The Hewitt field is only 12 miles from the East Anglian coast and, being a mature field, could be suitable for conversion into a storage site. However, it could take at least two years to bring the new facility on stream, by which time new pipelines will be bringing gas into the UK from Norway and the Netherlands.

A spokesman for the energy regulator Ofgem said National Grid Transco's latest calculation was that Britain would have enough gas this winter to withstand the kind of cold snap only experienced once every 50 years, provided there was a "demand side response". This means shippers selling gas back into the network and large industrial customers agreeing to have their supplies interrupted to ensure there is enough gas for domestic consumers and power stations.

National Grid Transco said that its latest forecast of electricity demand, published in May, was that the UK would have a safety margin of 20 per cent this winter. The company is scheduled to publish an updated estimate next month.

However, a committee of peers warned three months ago that Britain might run short of gas this winter if there was a prolonged cold snap. The House of Lords European Union Committee said it was not convinced by ministerial reassurances that market mechanisms for ensuring gas supplies were adequate and said too much reliance was being placed on interruption of supplies to industrial users.

Lord Woolmer of Leeds, the chairman of the committee, said at the time: "While the Minister for Energy Stephen Timms tried to reassure the committee, we remain unconvinced. Ofgem believes supplies are adequate except in extreme conditions. It is the extreme conditions we worry about."

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