London: British gas prices are likely to become more volatile and prone to spikes over the next few years after the UK has moved from self-sufficiency to increasing dependence on imports of liquefied natural gas (LNG) from Qatar.
The latest UK government data show Qatari LNG imports were equivalent to 52 per cent of the gas consumed over the first nine months of 2011, up from 11 per cent for 2009 as a whole.
Qatar also accounted for 85 per cent of UK LNG supplies between January and November last year, with Nigeria a weak second at just 5 per cent.
Britain's gas market is exposed to diversions of Qatari ships to countries that pay more, to shipping restrictions or unplanned outages on production facilities.
"If Qatari LNG supply to Britain was cut off, UK gas prices would spike to oil-indexed levels to attract imports and possibly even higher to attract LNG from elsewhere," one UK gas trader at a utility said.
An event considered routine in other markets — the news leak last summer of Qatar's LNG autumn maintenance schedule for its LNG trains — had the power to push UK winter gas prices up 3 per cent in a day. British gas prices also soared in March last year when Japan, also a big LNG importer, was hit with the Fukushima nuclear crisis and started replacing nuclear capacity with additional gas imports.
