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UK GAS-Prompt dips on resumed St Fergus flows

Wed, 17th Sep 2014 09:40

* Day-ahead prices retreat from Tuesday's 2-week high

* UK system forecast to be undersupplied - National Grid

* Ukraine-Russia gas talks next week may affect prices

LONDON, Sept 17 (Reuters) - Prompt natural gas prices inBritain dipped on Wednesday following two days of strong gains,as flows resumed at Shell's St Fergus terminal after anunplanned outage on Tuesday.

The day-ahead contract was down 0.2 pence or 0.4 percent at49.80 pence/therm by 0917 GMT, retreating from a two-week highof 50.45 pence touched in the previous session.

On Tuesday, Shell said some minor unplannedmaintenance had impacted flows to St Fergus, but the companyfailed to flag up the unplanned drop in volume to zero fromaround 20 mcm/day on Monday evening.

"St Fergus receipts are not yet up to pre-outage levels of22 million cubic metres. However, some gas has been re-routedthrough Langeled, mitigating the impact," analysts at ThomsonReuters Point Carbon wrote, referring to the pipeline thatconnects Britain to Norway.

An appreciating British pound also weighed on prices.

British gas demand, estimated to be 167.9 mcm on Tuesday,was around 8 mcm above forecast supply, according to theNational Grid.

Temperatures across the country are also expected to remainabove seasonal norms until Sept. 22, meaning likely lower demandfor gas.

Front-month prices, however, were 1 percent higher at 51.50pence/therm on concerns over medium-term disruptions in Russiangas supplies, which accounts for around a third of Europe'stotal consumption.

"The curve could also be slightly bearish for the promptdepending on how market players view the potential for gas talksnext week to lead to a comprehensive agreement between(Ukraine's) Naftogaz and (Russia's) Gazprom," the Point Carbonanalysts said.

Russian natural gas flows to the European Union throughSlovakia via Ukraine on Wednesday were similar to previous daysthis week but still down from last week, Slovak pipelineoperator Eustream said on Wednesday.

Nominations, or the amount scheduled for entry, totalled48.9 mcm, Eustream's website showed.

Polish gas pipeline operator Gaz-System said the country wasreceiving 19-20 mcm of gas per day from its eastern supplyroute, 20 percent less than gas importer PGNiG had requested. (Reporting by Michael Szabo; editing by Jason Neely)

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