UK GAS-Prices rise amid NS2 uncertainty and low LNG supply

British and European gas prices rose on Tuesday morning amid continued uncertainty around the start-up of the Nord Stream 2 (NS2) pipeline and a weak supply of liquefied natural gas.

UK September contract TRGBNBPD1 rose 1.25 pence to 107.25 pence per therm at 0802 GMT.

At the Dutch TTF hub, the September price TRNLTTFMc1 was 1.50 euros higher to 44.10 euros per megawatt hour.

Persistent uncertainty over the start of flows through the Nord Stream 2 pipeline is helping to support prices, traders said.

“Construction work on the Nord Stream 2 pipeline could continue until September, much later than expected at the end of August, and trade flows may not start until next year,” said Xun Peng, gas analyst at Refinitiv .

A German regional court will decide on Wednesday whether European Union rules requiring the separation of energy production from transport and trade should be applied to the pipeline.

While this does not affect the completion of the project, if the court rules against the bundled ownership, Russian group Gazprom could be forced to auction the capacity of the pipeline, which could further delay deliveries, Peng added. .

The low supply of liquefied natural gas and expectations of slightly higher wind production are also helping to support prices.

Peak wind generation in the UK is forecast at 2.6 gigawatts (GW) on Tuesday and 4.3 GW on Wednesday, out of a total measured capacity of around 20 GW, according to data from Elexon.

Despite this, the UK system was supercharged by around 15 million cubic meters (mcm), with demand forecast at 149 mcm and supply at 164 mcm / day, according to data from National Grid.

The EU benchmark carbon contract of 21 December CFI2Zc1 was up 0.71 euros to 56.05 euros per tonne.

The UK UKAFMc1 benchmark UK carbon contract of December 21 was slow to trade.
Source: Reuters (Reporting by Nina Chestney)

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