National Grid Reassures As UK Gas Demand Seen At All-time High - Wall Street Journal

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LONDON (Dow Jones)--U.K. natural gas network operator National Grid PLC (NGG) sought to reassure consumers Monday that there would be sufficient supplies to a meet a new all-time high in demand, despite the utility issuing a gas balancing alert Sunday.

"Healthy levels of electricity generation and gas available from a diverse range of sources has left supply and demand balanced despite current high demand levels due to the cold weather," the utility said in a statement.

The gas balancing alert issued Sunday, which can lead to some large industrial gas users having their supply diverted to households, was described in the statement as a "routine market tool...making additional supplies available or reducing demand by switching electricity generation from gas to other fuels."

Only consumers on discounted contracts that allow for their supply to be reduced during periods of high demand are affected by the alert.

Prompt within-day U.K. natural gas prices have risen nearly 16% since last Monday, as a result of the extra demand, and were trading at 71.2 pence per therm at 1033 GMT Monday, a gas trader in the U.K. said.

Lower Liquid Natural Gas flows in recent weeks have also helped tighten the system the trader added, but noted within-day flows have increased after the LNG tanker Al-Huwaila berthed at the Isle of Grain regassification terminal in Kent, England, Saturday.

The Isle of Grain terminal is able to import 9.8 million metric tons of LNG a year.

Total gas demand is expected to hit 465.8 million cubic meters Monday, just above the previous all time high of 465.5 million cubic meters on Jan. 8 this year.

Much of Europe is experiencing unusually cold weather and heavy snowfall for the time of year. Transport links have been severely disrupted across the continent.

-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com (Reza Amanat in London contributed to this report.)

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