Russia to send first Arctic gas cargo to Britain in the wake of supply crisis
Russian President Vladimir Putin opened the £20bn Yamal project on Russia's northern coastline last week. Shortly after, British wholesale gas prices soared to four-year highs when a crucial North Sea pipeline was put out of action by a crack and a distribution hub in Austria was hit by an explosion.
Around 40pc of the UK’s domestic supplies have been wiped out until the new year due to the emergency shutdown of the North Sea’s Forties pipeline, operated by Ineos. Supply from Europe has also been constrained by the explosion at a hub in Austria and technical problems in the Norwegian North Sea.
“Energy Minister Richard Harrington has spoken to Ineos and we will continue to liaise with industry operators to monitor the situation and ensure repairs are undertaken as quickly as possible.”
The booming cost of locking in gas deliveries during a major supply squeeze and freezing weather could still have serious consequences for energy users.
Energy suppliers are typically forced to raise prices to cover higher costs, and smaller suppliers without the financial wriggle room may even face an existential risk as they battle to buy extra gas at short notice.
Major industrial users are also expected to suffer due to the higher cost of gas.
“This cargo won’t by itself make a massive difference to the UK’s supply picture but it does show how Europe has impacted the global market,” he added.
The UK is scheduled to receive only one other LNG cargo for the rest of this month.