* Lack of sufficient storage could threaten security
* UK highly dependent on Qatar for LNG
* Future US exports of shale gas to Europe not a sure thing
By Yeganeh Torbati
LONDON, Feb 3 A lack of sufficient gas
storage, heavy dependence on Qatari liquefied natural gas (LNG)
and an unknown American capacity to export gas to Europe are all
risks to Britain's gas supply security, the UK's energy
regulator chief said this week.
"Fundamentally we are very concerned about security of
(energy) supply," said Ofgem Chief Executive Alistair Buchanan
at a gas seminar on Thursday evening.
The Department of Energy and Climate Change (DECC) asked the
regulator last year to examine the UK's gas supply in the medium
to long term, given political upheaval in the Middle East and
the Fukushima nuclear disaster in Japan in 2011.
One risk to supply includes cold weather that could tax
storage, Buchanan said.
Last year, gas supplies could have been at risk had the
unusually cold winter not been followed by a mild spell towards
the end of the heating season.
This year a mild beginning of the winter has allowed storage
levels to be filled to high levels, but bitter cold this week
has pushed UK spot gas prices to highs not seen since October
2008, with forecasted supply shortages of 9 million cubic metres
a day, according to National Grid.
Britain pumped gas out of underground storage sites to
handle the increase in demand, depleting stocks at a rate of
about 99 million cubic metres per day.
RELIANCE ON QATARI LNG
Britain's near-total dependence on Qatar as a source of its
LNG imports is also a risk, Buchanan said.
"In [the third quarter of] last year, all of our imports
came from Qatar. Of the ships that came to Britain last year
only two were not from Qatar," Buchanan said.
The latest government data showed that Qatari LNG imports
were equivalent to 52 percent of the gas consumed over the first
nine months of 2011, up from 11 percent for 2009 as a whole.
A Reuters analysis showed that this dependence could lead to
spikes in UK gas prices as Asian demand for LNG pushes gas
Ofgem also warned that unconventional gas resources in
Europe and shale gas exports from the U.S. may not be enough to
secure Britain's future gas needs either.
"We're going to have some European shale but maybe not the
amount that we thought," Buchanan said.
The U.S. exploration of its shale gas resources has led it
to reduce imports and raised hopes that it could one day export
to Europe, potentially providing the continent a way to reduce
dependence on Russian and Middle Eastern supplies.
Forward prices on the UK gas market suggest that traders are
already pricing in expectations of a flow of gas from across the
Atlantic, though companies have not yet broken ground on export
plants in the Gulf of Mexico.
But Buchanan said the U.S. ability to export gas depended on
whether U.S. regulators push for a switch from coal to gas power
for domestic consumption and how quickly its economy grows in
the coming years.
This week's forum was Ofgem's first major effort to gather
industry views on the UK's gas supply prospects following the
DECC request last year, an Ofgem spokesman said.
Ofgem is due to present its report to the government in late
(Reporting By Yeganeh Torbati; Editing by Henning Gloystein and