| So Called Global Heating Gas Market 16:07 - Nov 5 with 728 views | JACKMANANDBOY |
I was taking to one of my customers at a industrial site that burns heating gas, he was talking me through his experience of gas prices. He knows this stuff.
We are repeatedly told that heating has is sold on a global market and there is nothing to be done about the price.
UK heating gas prices are currently 10X the heating gas price in the US.
So there is actually a fragmented global market that is influenced by the scale of local production.
If we produced more the price would drop here. [Post edited 5 Nov 16:17]
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| So Called Global Heating Gas Market on 16:27 - Nov 5 with 0 views | Wingstandwood |
QUOTE: "UK heating gas prices are currently 10X the heating gas price in the US."
Truly shocking! |  |
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| So Called Global Heating Gas Market on 16:30 - Nov 5 with 0 views | JJBomber |
The irony being that the 2nd and 3rd paragraph contradict each other. It's a global market but one country pays 10 times more than another! |  | | |
| So Called Global Heating Gas Market on 23:01 - Nov 5 with 0 views | AnotherJohn |
I've tried to set out my understanding of this at greater length in the past on a thread about whether more local production would lower retail gas prices. My answer was yes, probably. but by quite a modest amount. The claim that there is a single global price for gas from all origins is a fib. Around the world there are a series of trading hubs. For the UK there is the National Balancing Point (NBP), and prices there are close though not identical to the TTF (the main European hub the UK would use for purchases of piped gas). US hubs sell piped gas domestically at lower prices but can only really get gas to us as LNG carried in tankers, which puts the price up. All North Sea gas from the UK sector goes straight into the National Grid, and is mixed there with gas coming from Norway via a oneway pipeline, and sometimes with gas coming from the two main European bi-directional interconnectors. Sometimes gas from the UK NS sector will be sold to Europe through the two European interconnectors. Additionally there are connectors to Ireland. That is the only sense in which any of the piped gas from our NS sector goes directly onto the international market. In fact the capacity of the two main bidirectional interconnectors is quite limited. Over time only around 1% of our piped gas purchases from overseas comes into the National Grid that way, with most coming from the Norwegian one-way interconnector. In fact, most of the gas from the UK NS sector is consumed in the UK or RoI. However, for most of the time piped gas does not meet all our needs and is supplemented with LNG brought by marine tankers. Most of the piped gas we buy is priced on long-term contracts - mainly with Norway - while the LNG price is based on spot purchase prices and is normally higher (based on prices for cargoes in US trading hubs). My understanding (which may not be 100% correct) is that an increase in supply in our region might lower prices for 3 reasons:
1. Reducing the amount of expensive LNG the UK has to buy.
If additional North Sea production supplies piped gas that would otherwise have to be imported as LNG, the UK may avoid some of the additional costs associated with obtaining and delivering that gas. The effect could be particularly valuable when international supply is tight.
2. Reducing competition for limited import capacity
When demand is high, additional domestic supply could reduce the UK's need to bid for piped gas competing for limited interconnector capacity from Belgium and the Netherlands. It could also reduce the need to attract LNG cargoes away from other markets.
3. Reducing the price-setting pressure at the margin
When the market is tight, the price needed to attract the last unit of gas required to balance supply and demand can be relatively high. Additional UK production could reduce that pressure, even if it represents only a modest proportion of total consumption.
Saying that extra production from the UK sector of the NS would just be sold on the international market at global prices rather misses the point that this gas is piped directly into the UK national grid and is quite dfficult to move elsewhere in large volumes, except to Ireland. Some could be converted to LNG for sale elsewhere but I think the volumes are relatively small, [Post edited 6 Nov 9:24]
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| So Called Global Heating Gas Market on 11:22 - Nov 7 with 0 views | jack_lord |
The stuff I have read is that the UK domestic gas is 2 to 3 times more expensive than US gas. |  |
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| So Called Global Heating Gas Market on 11:34 - Nov 7 with 0 views | max936 |
That clown Miliband has recently doubled down on the policies he made when he was energy secretary. Another clown who shouldn't be anywhere near government. |  | | |
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