Natural gas storage injections into Rough, the UK's only long range storage facility, have been running at full capacity recently, while medium- range facilities have held off beginning injections to await better NBP price spreads, data analysis by S&P Global Platts showed.
Injections into the Rough reservoir have been running at full capacity since Sunday, May 8, with 106 million cu m injected from May 8-11, allowing stocks to increase to 545 million cu m by the start of Thursday's gas day, National Grid data showed.
Rough injections begun after maintenance works at the facility ended early this month. Injections have typically started late March, according to recent patterns.
Medium-range gas stocks have remained steady around the 460 million cu m mark during the same period and were below the five-year average of 473 million cu m at the start of Thursday's gas day, with capacity holders awaiting more favorable price spreads before injecting ahead of the winter 2016/17 delivery period.
NBP STORAGE SPREADS TO IMPROVE
Expectations for cool temperature mid-month allied to weak Norwegian gas flows into the UK and several UK Continental Shelf unplanned outages have led to price strength on the NBP prompt so far this month.
The weekend and working-days-next-week contracts were assessed by Platts at 30.675 pence/therm and 30.40 p/th, respectively, Thursday, compared with the June contract at 29.30 p/th and the July contract at 29.75 p/th.
Indeed, the Q3 2016 contract closed Thursday at 30.20 p/th, allowing capacity holders to secure gas at a cheaper price later in the summer than short-term contracts.
Recent injection patterns suggest capacity holders may be holding off securing gas to be put into storage now in anticipation of Interconnector maintenance -- scheduled for the gas days June 15-29 this year according to IUK -- with MRS injections increasing in pace due to typically weak NBP spot prices during the works which remove the UK's ability to export gas.
The June 2016/Q1 2017 NBP price spread was assessed at 8.05 p/th Thursday, according to Platts data. The May 2016/Q1 2017 spread was assessed at 7.15 p/th at the end of April.
