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Energy companies urge UK to detoxify gas exports to EU

10 months ago
in Market
Energy companies urge UK to detoxify gas exports to EU
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Energy companies have urged the UK to take “urgent” action over the amount of “toxic” and “hazardous” contaminants in the gas it is processing for export to the EU.

They warned the problem could force critical subsea pipelines to be shut down this winter as mainland Europe struggles to replace the gas it usually buys from Russia.

The UK has become a vital gas bridge to the EU since Russia’s full-scale invasion of Ukraine in February, leaving the bloc rushing to secure alternative supplies.

EU countries are urgently trying to fill up their gas storage facilities amid fears that Russia could cut off supplies entirely.

To help these efforts, the UK has been processing large volumes of liquefied natural gas arriving at its ports from countries including the US and Qatar. This is then moved through Britain’s energy system before it is exported via subsea pipelines from Bacton in Norfolk to Belgium and the Netherlands.

But several energy companies warned that in recent months gas delivered to UK terminals has persistently been “contaminated” with high levels of materials that are often “radioactive” and can burn when they come into contact with the air.

Removing the materials has resulted in disruption that has cost gas traders an estimated £270mn so far this year and could force maintenance shutdowns if the situation deteriorates, said the businesses.

These companies include a group majority owned by Belgian infrastructure giant Fluxys, Gazprom’s former trading arm of which the German government took control this year and rebranded Securing Energy for Europe, and French utility EDF. They have called on National Grid, which oversees Britain’s gas system, to take “urgent” action to address the problem.

Britain has been maximising exports to the EU this summer because in winter it relies on gas flowing back from mainland Europe, which has superior storage facilities, to meet demand at peak times.

National Grid has argued that if EU storage facilities are not filled enough this summer, pressure to continue sending gas from Britain will be “increased and sustained” during the winter. This could affect the UK’s security of supply.

National Grid is seeking approval from UK energy regulator Ofgem to temporarily increase the maximum possible volume of gas that can be exported to mainland Europe via the pipeline to the Netherlands. But several energy companies oppose the move until the problem with excess hazardous materials is resolved.

Interconnector Limited, a company majority owned by Fluxys which operates the gas pipeline between Britain and Belgium, said it was “very surprised” National Grid wanted to increase flows further, given supplies delivered to Bacton this year have “consistently” been contaminated by “solids and liquids” that have constrained its operations and caused two shutdowns for repairs.

The solids include “hazardous”, “toxic”, “radioactive” and “pyrophoric” materials, said Interconnector Limited in written evidence to an expert panel that met last week to examine National Grid’s proposal.

Increasing gas volumes further would mean the problem is “highly likely to be exacerbated . . . leading to increased risk of disruption to cross-border flows risking both European and GB security of supply”, added Interconnector Limited.

EDF said in its written evidence that the problem has harmed the “efficiency and effectiveness of the interconnected GB-EU gas market”.

Despite this, the expert panel recommended Ofgem approve National Grid’s request.

Recommended

Senior energy industry executives told the Financial Times it was normal for some unwanted solids, often referred to as “dust” in the sector, to be delivered alongside gas but since April it had been arriving in “never before seen quantities”.

National Grid said the “presence of dust” in Britain’s national gas transmission system was a “historic and known issue and is something that we are continually monitoring”.

It said “given [that] gas flows to the continent are much higher than those observed in a typical summer due to the important role we are playing in supporting the EU with gas supplies”, it was “not unexpected” that Interconnector Limited was having to carry out more maintenance work such as changing filters to capture hazardous materials.

National Grid said its proposal to increase maximum volumes via the UK-Netherlands pipeline would “not compromise safety and security on the system . . . or impact other customers”.



www.ft.com

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