On Monday the BBL pipeline linking the Dutch and British markets will come offline for maintenance for five days, but pricing signals indicate little concern at the NBP.
The pipe is only capable of physical flows towards Britain, although virtual nominations are possible in the opposite direction. So far this month, Britain has been receiving an average of 9 million cubic metres (mcm) each day through the BBL, equivalent to about 6% of demand.
In addition, there are currently restrictions on the volume of Norwegian gas being sent to Britain through the Entry SEGAL system, due to annual maintenance.
However, NBP prices this week suggest there is little market fear over the loss of imports, as the WDNW contract has been closing below the Day-ahead throughout the week.
On Thursday, WDNW closed at a discount to the Day-ahead of 0.425p/th, indicating prompt contracts could be lower from next week.
There are two key factors keeping the market relaxed.
One is the volume of gas held in storage, with sites currently more than 90% full at above 4.6 billion cubic metres, according to ICIS data.
The upcoming three-day bank holiday weekend will give shippers the chance to increase this volume further, which means any undersupply can be easily compensated by reserves held in medium-range sites.
Also, a key component to British demand in recent months has been the use of gas in power generation, due to much of Britain’s coal capacity coming offline for maintenance.
Much of this has been concluded in recent days, with more coal capability expected to be available next week as other technical work is completed. Therefore there should be less of a burden on gas to product electricity and this has also helped to keep WDNW below the Day-ahead. Ben Samuel