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Europe Gas: UK prices jump on lower Norwegian supply

British wholesale gas prices rose on Monday morning on lower Norwegian supply and the risk of outages being extended.

UK gas for immediate delivery jumped by 59 pence to 135 pence per therm by 0809 GMT, its highest level since May 3. The day-ahead price was 25 pence higher at 134 pence/therm.

This was mostly due to an under-supplied system, lower flows from Norway and the risk of Norwegian outages being extended, traders said.

Norwegian flows via the Langeled pipeline have fallen to 38 million cubic meters (mcm) per day due to outages.
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There is an unplanned outage at the Troll field until May 23, impacting 17 mcm/day of flows, and smaller disruptions at several other Norwegian facilities.

Norway’s Hammerfest LNG plant is now expected to restart on May 27, four days later than the previous plan, Norwegian gas system manager Gassco said on Sunday.

At the weekend, Gazprom halted gas exports to Finland after it refused to pay for Russian gas via a new payment mechanism which would allow euros or dollars to be converted into roubles, making it the third European country to have flows stopped.

Finland said it could get gas through the Balticonnector pipeline instead, which connects it to Estonia.

“While Finland sources almost all of its natural gas from Russia, natural gas only makes up around 5% of Finnish energy consumption,” said analysts at ING Research.
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The stoppage could raise concerns in the market over Russian gas supplies to Europe, as bills are due for payment by the end of the month.

“Although it remains unlikely that Gazprom will cut any major European consumer off of its supplies regardless of their compliance with the new payment scheme, this will be a major bullish factor supporting prices throughout the week,” said Refinitiv gas analyst Yuriy Onyshkiv.

In the Dutch TTF market, the June contract dipped by 1.05 euros to 86.15 euros per megawatt hour.

Temperatures in north-west Europe are expected to be warmer than previously forecast until Friday, Refinitiv Eikon data showed.

In the European carbon market, the benchmark contract edged up 0.05 euro to 80.44 euros a tonne.
Source: Reuters (Reporting by Nina Chestney; Editing by Jan Harvey)

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