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National Grid in emergency talks over crucial gas supplies

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National Grid aims to be able to accept higher volumes of liquified natural gas from next year energy crisis uk - REUTERS/Paul Hackett
National Grid aims to be able to accept higher volumes of liquified natural gas from next year energy crisis uk - REUTERS/Paul Hackett

National Grid is holding emergency talks with energy companies to ramp up gas pipeline capacity after it was forced to turn away crucial shipments of liquified natural gas (LNG).

The Grid has pledged to address industry concerns over lack of capacity on its network so it can deliver the supplies needed to tackle the European energy crisis.

The company has kick-started talks with LNG importer South Hook Gas to make sure it can handle a higher level of cargoes next year. It is also planning to discuss the network's capacity issues at an industry workshop on 9 June.

Gas companies have seen the move as a sign National Grid is willing to consider ways to ramp up capacity in 2023.

National Grid has been forced to dramatically reduce the amount of capacity it offers at ports in Milford Haven in Wales this summer over fears it is running out of space for the fossil fuel required to replace Russian gas on the continent.

It has also cut back on supply so it can push ahead with maintenance work on the pipeline.

National Grid is now weighing up plans to increase the pressure in the pipes in its gas network ahead of summer 2023, although talks are at an early stage. National Grid has not made any firm commitments in discussions so far.

The gas network is currently unable to handle a large uptick in deliveries over the summer months owing to a decline in demand from British households.

National Grid will also conduct maintenance on its gas network this summer to prepare for deliveries in the winter months, although there are no plans to make major investments.

Gas companies railed against National Grid's plans to pull back on capacity at Milford Haven terminals in a consultation run at short notice. Ofgem has approved the plans put forward by National Grid.

ExxonMobil complained that the plans risked "significantly undermining efforts to deliver LNG to the UK market", while German gas giant RWE said Britain should be trying to "maximise possible throughput" on its gas network.

South Hook Gas has requested a major upgrade to the gas pipelines in Wales as part of a separate project due to be finished in 2026.

National Grid has pledged to build new pipelines in the region and increase the pressure in the network to accommodate a larger number of deliveries at Milford Haven.

The project will see 9 km of new pipeline put in place between Wormington in Gloucestershire, and Honeybourne in Worcestershire, with 2 km of new pipeline in Churchover in Warwickshire.

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