United Kingdom gas markets long-term outlook H1 2015 Report

Commodity Market Report 20 August 2015

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Report summary

Coal to gas switching supported gas demand in 2014 however gas demand still fell by 8% as a result of unusually mild temperatures. As weather return to normal levels in 2015, demand will grow 5.7% year-on-year and recover to normal levels. Demand growth however is not expected to be sustained, as energy efficiency measures increasingly kick in and offset any upside from rising GDP, population growth and increasing disposable income.

Executive summary
- Key changes and recent trends
  - A return to normal weather stimulates demand growth in 2015 however demand will be relatively flat over the mid-term before declining in the long-term
  - Production growth continues through 2016 but delays and postponements hamper growth thereafter
  - Economics of coal to gas switching in the UK underpins European spot prices, providing a soft floor around US$6.5/mmbtu
- Links to related reports
Demand
- Power
- Non-power demand
- Residential
- Commercial
- Industrial
- Transport and Losses
Supply
- Production growth continues to 2016
- ...but delays and postponements hamper sustained increased in offshore production
- Despite government support shale gas exploration has been delayed and we have downgraded our forecast
Infrastructure
- Gas infrastructure
- LNG infrastructure
- Pipeline infrastructure
- Storage infrastructure
Contracts
- Piped imports: historical flows and contracts
  - Recent trends
  - Piped contracts
- LNG imports: historical flows and contracts
  - Recent trends
  - LNG contracts
- Gas exports: historical flows and contracts
  - Recent trends
  - Export contracts
Supply-demand balances
Costs
- Tariffs for transportation
  - Uniform network code and charges
  - Capacity charges
  - Commodity charges
  - Storage access
Prices
- NBP gas price development
- Trading at NBP