Britain has become the first recipient of gas from a sanctioned Russian project.
The UK has been dealing with severe winter weather that has sparked flood alerts across the country and forced schools to close for three days in some parts. This along with the shutdown of the North Sea’s most important oil and gas pipeline system due to an explosion at a major processing facility in Austria on Monday, have sent the gas prices soaring.
The first shipment of natural gas from the Yamal LNG project in Russia’s Arctic, which was opened by President Vladimir Putin last week, is making its way to the Isle of Grain import terminal in Kent, the media reported Wednesday
The Telegraph reports:
Russian President Vladimir Putin opened the £20bn Yamal project on Russia’s northern coastline last week. Shortly after, British wholesale gas prices soared to four-year highs when a crucial North Sea pipeline was put out of action by a crack and a distribution hub in Austria was hit by an explosion.
Now a deal has been struck to bring the debut cargo from Yamal to the Isle of Grain import terminal via a specially built ice-breaking tanker by the end of the month.
Britain rarely receives deliveries of liquid natural gas (LNG) in winter because prices are typically far higher in east Asian markets. However rocketing demand in Europe drove the price for gas delivered to the UK to more than $10 per million British thermal units. This put the UK on a par with Asian gas markets, which are some of the most expensive in the world.
Around 40pc of the UK’s domestic supplies have been wiped out until the new year due to the emergency shutdown of the North Sea’s Forties pipeline, operated by Ineos. Supply from Europe has also been constrained by the explosion at a hub in Austria and technical problems in the Norwegian North Sea.
Despite the upheaval Government officials have repeatedly argued that the UK is not facing a threat to security of supply due to the wide range of gas sources available.