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UK GAS-Prices fall on continued oversupply

* Spot gas falls 0.30 pence to 21.80 pence/therm

* Storage injections needed to balance system-analysts

Sept 14 (Reuters) - British prompt gas prices mainly fell on Wednesday due to an oversupplied network as storage sites struggled to mop up continued high flows from liquefied natural gas (LNG) terminals.

Gas for instant delivery fell by 0.30 pence, or 1.36 percent, to 21.80 pence per therm by 0926 GMT, while Thursday gas traded marginally higher at 22.10 pence per therm, up 0.05 pence.

The weekend gas contract declined by 0.90 pence, or 3.91 percent, to 22.10 pence per therm.

Price volatility has become a feature of UK gas markets since the country's largest gas storage site Rough was shut down until March or April next year, limiting the system's ability to balance supply and demand.

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Britain's gas network is oversupplied by 16.8 million cubic metres (mcm/day), according to National Grid (LSE: NG.L - news) data.

Smaller UK storage sites have more limited capacity to quickly absorb large volumes of gas.

"Injections nominated from storages need to tick up to balance the system," Thomson Reuters (Dusseldorf: TOC.DU - news) analysts said, forecasting that net injections of 9 mcm/day are needed to wipe out the supply overhang.

But storage sites are currently pumping out 2 mcm/day into the network, adding to oversupply.

A jump in gas deliveries through the Theddlethorpe terminal, to 4.5 mcm/day from 0.7 mcm/day, as the site slowly emerges from a maintenance-related outage is further pressuring prices.

"Supplies have increased on the back of the return of flows into Theddlethorpe, with maintenance at the terminal expected to be completed by Friday," Wingas UK's head of trading, Marcel Boonaert, said.

Two fresh sea-borne LNG shipments, the Arctic Discoverer due on Sept. 15 and the Zarga on Sept. 21, are expected to unload at British terminals, in addition to three other previously expected tankers.

The influx of LNG has encouraged strong flows from the South Hook import terminal, at 42 mcm/day, while flows from the neighbouring Dragon terminal hit overnight highs of 26 mcm/day in anticipation of an incoming shipment.

Gas prices further out on the curve edged higher in line with Brent crude oil prices.

The Winter 16 contract rose 0.10 pence to 38.30 p/therm.

In the Netherlands, the day-ahead gas price at the TTF hub was up 0.13 euro at 11.18 euros per megawatt-hour.

In the European carbon market, the benchmark Dec. 16 contract was unchanged at 4.03 euros a tonne. (Reporting by Oleg Vukmanovic, editing by Louise Heavens)