Zeebrugge natural gas spot basis at eight-year low on NBP drought
Britain's ongoing shortage of flexible natural gas supply caused the Zeebrugge Day-ahead basis to plummet further into negative territory on Thursday, closing at its lowest level in more than eight years.
The outright Belgian spot price closed at 84.475p/th - equivalent to €33.86/MWh - leaving the contract at a discount of -13.00p/th to its NBP peer.
According to ICIS data, this is the highest premium the British Day-ahead has held over the Zeebrugge spot since 22 February 2005, when it closed at -17.00p/th. In 2005 - as is the case now - the NBP was running low on gas in store, with production glitches compounding the already tight supply caused by a sharp cold spell.
Norwegian pipeline Vesterled had suffered from a gas leak that week, while British consumption had firmed to about 410 million cubic meters (mcm).
Traders active on the NBP on Thursday said that with a -13.00p/th Day-ahead basis, they expected Interconnector to continue to flow at, or close to, maximum throughput.
On Wednesday, the IUK-operated pipe hit an all-time reverse-flow high, breaking its third record in a month. Some 72.7mcm was shipped from Belgium to Britain on Wednesday.
Previously, on 8 March, 68.9mcm was exported from mainland Europe, while three days earlier the figure stood at 64.5mcm (see ESGM 6 March 2013).
Given the record volume, Interconnector supply to the NBP covered just over 22% of the hub's Wednesday demand, which stood at 330mcm.
Sources active at the NBP said it was possible the Day-ahead basis would remain deeply in negative territory until the end of the month.
"It doesn't really matter if we are at -13.00p/th or -15.00p/th, once the capacity is running at full, there is no more that we can import [from mainland Europe], one counterparty said. He added German and Dutch gas hubs now looked reasonably well supplied, so there was little reason not to flow gas to Britain if capacity was available.
Interconnector has a reverse-flow capacity of 74.0mcm, having been upgraded three times between November 2005 and October 2007. Initially, the pipe was only able to import 25.0mcm/day. Tom Marzec-Manser and Nicole Tovstiga
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