Ofgem looks at gas treatment facilities at Britain’s import terminals
Ofgem, Britain’s gas and electricity regulator, has called for gas treatment facilities at import terminals to deal with future gas quality issues as Britain becomes evermore reliant on imports.
In a document published late on Tuesday, Ofgem said: “Significant uncertainty exists regarding the extent to which gas quality may in future constrain gas supplies,” adding that lingering uncertainty meant there would be a risk that any gas treatment facility built today may not be used in the future.
To overcome the investment hurdle, the report recommended that future users of any treatment facilities, gas network operator National Grid (NG) and gas consumers all share the construction risk and provide a commitment to purchase capacity.
“Although significant uncertainty exists regarding the extent to which gas quality may in future constrain GB gas supplies, it is important that appropriate commercial and regulatory arrangements are in place to facilitate potential investment in gas treatment facilities,” the regulator said.
Gas quality specifications in Britain are demanding — some experts say too demanding. The government has been forced to address the quality issue as the UK’s supply sources diversify away from the UK Continental Shelf and the country has become a net importer.
Nearly all LNG sources are outside the UK’s specification limits (with the exception of Egypt and Trinidad & Tobago) and by 2020 the Department of Trade and Industry (DTI) estimates 20% of UK supplies could be LNG. The country’s only terminal, at Isle of Grain, has a nitrogen ballasting plant. There are also risks that a minority of pipeline imports could be outside current limits.
If gas of a different quality were imported into the British network, it could hinder the safe operation of an estimated 50 million gas-burning appliances, Ofgem said. Ofgem added it will begin a process of consultation on the recommendations. The DTI has said gas quality specifications will not change until 2020 at the earliest.
BF
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