U.K. Natural Gas Advances With Crude as Norwegian Fields Halt

April 11 (Bloomberg) -- U.K. natural gas advanced as crude reached its highest in more than two years and fields in Norway remained shut. Power rose.

Statoil ASA halted output at the Visund and Njord fields in the Norwegian Sea on April 8 after damage to so-called flexible risers, a type of pipeline. Visund gas arrives in Norway at the Kollsnes processing plant and is exported to mainland Europe and the U.K., the region’s biggest user of the fuel.

“Right now we need to inspect and assess the risers to see if they can sustain production starting up again” at Visund, Ola Anders Skauby, a spokesman for Stavanger, Norway-based Statoil, said by telephone. “Before we’ve done this thoroughly, it’s hard to say how long the shutdown will last.”

Gas for May gained as much as 0.85 pence, or 1.4 percent, to 62.25 pence a therm. It was at 61.55 pence at 11 a.m. in London, according to broker prices compiled by Bloomberg. That’s equal to $10.07 a million British thermal units. A therm is 100,000 Btu.

Three liquefied natural gas carriers that previously gave the U.K. as their destination are now headed away from Britain. Al Bahiya, which said it would arrive in the U.K. on April 15, is approaching Fos, France. The Maran Gas Coronis changed its destination to Boston from Isle of Grain on April 8. The Excalibur now lists its destination as South Indian Ocean instead of Teesside.

Brent Crude

Brent oil for May rose to its highest since August 2008, climbing as much as 0.3 percent to $127.02 a barrel today on London’s ICE Futures Europe exchange. Higher oil costs boost some mainland European gas contracts and affect prices in the U.K. because of pipeline connections to Europe. The contract later fell as much as 1.1 percent to $125.21.

Winter gas, to be delivered in the six months from October, gained 0.65 pence at 74.15 pence a therm.

National Grid Plc forecast gas demand at 280 million cubic meters in the 24 hours through 6 a.m. London time tomorrow. That’s about 36 million less than the seasonal norm. The nation’s pipelines will hold 356 million cubic meters of the fuel at that time, 15 million more than at the start of today.

Same-day gas climbed 1.05 pence to 58.3 pence a therm.

Baseload power for the next month was little changed at 53.20 pounds a megawatt-hour. Electricity for winter gained 60 pence to 61.30 pounds a megawatt-hour. Baseload is delivered around the clock.

(Source: http://www.businessweek.com/news/2011-04-11/u-k-natural-gas-advances-with-crude-as-norwegian-fields-halt.html)