UK GAS-Prices dip as Norway's Langeled pipeline resumes operation

Oct (HKSE: 3366-OL.HK - news) 21 (Reuters) - British gas prices fell on Wednesday on ample Norwegian supply, while rising temperatures and higher wind output undercut demand for the fuel.

Main supplier Norway is expected to ramp up exports further towards the UK following the end of maintenance on the Langeled pipeline, a key gas import artery for Britain.

Gas for instant delivery fell by 0.05 pence/therm to 40.65 p/therm as of 0942 GMT, while gas for Thursday delivery traded at 40.05 p/therm, down 0.50 p/therm compared with the previous session.

Britain's gas network was oversupplied by around 1 million cubic metres/day (mcm) with demand estimated at 205.8 mcm/day, according to National Grid (LSE: NG.L - news) data.

Norwegian imports through Langeled rose to 20 mcm/day from around 14 mcm/day on Tuesday, disappointing expectations of a bigger flow rebound following the end of pipe maintenance, analysts said.

"By tomorrow we expect (Langeled) volumes back toward 55 or 60 mcm," said Oliver Sanderson, analyst at Thomson Reuters Point Carbon, contributing to price losses on the day-ahead contract.

"A fall in local distribution zone consumption due to an increase in temperature, as well as lower gas power plant demand on the back of higher wind generation, has mitigated the increase in (UK-Belgium) exports," said Marcel Boonaert, head of trading and portfolio at Wingas UK.

Send-out from the South Hook liquefied natural gas (LNG) import terminal in Wales spiked on Wednesday, broaching 60 mcm/day, while contributions from the nearby Dragon terminal eased to around 1 mcm/day, National Grid data showed.

The jump in South Hook output reflects a tide of tanker deliveries inbound from Qatar, the world's biggest exporter, pushing the operator to clear space in tank storage to be able to accept fresh shipments.

UK LNG imports this month could hit highs not seen since summer 2011.

Gas prices for November delivery were down 0.40 p/therm at 40.15 p/therm, while the first-quarter contract eased by 0.20 pence to 41.20 p/therm.

In the Netherlands, the day-ahead gas price at the TTF hub fell 0.10 euro at 18.25 euros per megawatt-hour (MWh).

In Europe's carbon market, the front-year EU Allowance (EUA) price rose 0.03 euro to 8.50 euros per tonne.

(Reporting by Oleg Vukmanovic in Milan; Editing by Dale Hudson)