UK gas prices spiked to a seven year high on Friday after a faulty pump at one Britain's main pipelines forced it to close just hours after alarm bells were sounded over the country's rapidly dwindling supplies.
Interconnector, which runs the gas pipeline between the UK and Belgium, said a technical problem related to a water/glycol pump at its Bacton gas terminal had forced the shutdown.
Gas prices for same-day delivery jumped to 150p per therm, more than 50pc above Thursday's closing price and the highest level seen since March 2006. Week-ahead gas surged as much as 37pc to 135p a therm, also a seven-year high.
The Interconnector is one of Britain's main gas import pipelines. This week, it set a new record, exporting 783 gigawatt-hours of gas from Belgium to Britain.
Weeks of cold weather have left national gas supplies at critically low levels, prompting fears of a new wave of engery bill increases.
If the pipeline remains shut for a number of days, Britain's grid operator could be forced to trigger emergency supply options, including reducing demand from contracted users.
Households have been forced to increase their heating usage as the freezing weather continues, pushing the demand for gas to 20pc higher than normal in March.
Britain retains about 15 days’ worth of energy demand on hand compared with roughly 100 days for France and Germany.
However, Britain's gas stocks were just 10pc full on Thursday night, according to Gas Infrastructure Europe data, compared to 49pc this time last year.
Analysts said companies could import liquefied natural gas from Qatar the world’s biggest producer but that would take about two weeks to arrive by ship.
With the Met Office forecasting that the cold weather will stretch into April, analysts said that Britain may be forced to reduce gas supplies to big business customers. The analysis of supplies also heightens concerns over how Britain will meet its future energy needs.
Those fears were added to yesterday when SSE (LSE: SSE.L - news) , one of the largest electricity suppliers, said the Government was badly underestimating the risk of a power shortage in coming years.
“The Government is significantly underestimating the scale of the capacity crunch facing the UK in the next three years,” said Ian Marchant, SSE’s chief executive.
“There is a very real risk of the lights going out as a result.”
"This does not change the overall picture. We have diverse sources of gas for this very reason and there is sufficient capacity to cover these kinds of events,” a spokesman said.
A spokesman for the National Grid said that the market was responding positively and that it expected to be in a positve position by the end of the day.