Without North Sea Gas UK Energy Bills Would Be Even Higher
North Sea natural gas saved Britain billions last year and savings will be even higher this year amid sky-high prices, analysis has found, increasing pressure on the Government to boost production during the Iran war
The Telegraph has the details.
Tapping into its own resources of offshore gas instead of paying for imported liquefied natural gas (LNG) shipments saved the UK about £2.5 billion last year, according to analysis from investment bank Stifel.
The bank said savings on UK-produced gas would be “substantially higher” this year because prices have surged during the Middle East conflict.
Gas prices have soared by 56 percent since the start of the war as the threat of strikes has deterred tankers from passing through the Strait of Hormuz, where a fifth of global exports usually pass.
Meanwhile, missile damage at Qatar’s Ras Laffan plant, which produces a fifth of the world’s LNG, is expected to take three to five years to repair.
Stifel’s analysis will pile further pressure on Ed Miliband, who has banned new exploration in British waters and has so far rejected calls to extract more fossil fuels from the North Sea because of his Net Zero push.
The Energy Secretary has claimed that awarding new licences for North Sea drilling would do little to lower prices.
However, Chris Wheaton, an analyst at Stifel, said it was astonishing that Ministers were not ramping up production of North Sea gas, asking: “Doesn’t the Government realise there’s a war on?”
“Unsurprisingly – and we are frankly astonished that this has to be stated – the UK’s own North Sea gas is cheaper than imported LNG, and we estimate this saved the UK £2.5 billion in 2025 alone,” he said. “With the increase in global LNG prices due to the Persian Gulf conflict, we expect that amount will be substantially higher in 2026.”
The North Sea is still the UK’s biggest gas source, accounting for around 45 percent of its supplies. The other 35 percent comes from piped gas from Norway, while 20 percent is LNG imports.
The Climate Change Commission has said Britain will still need oil and gas beyond 2050.
According to Stifel, this imported LNG has been, on average, 18p per therm more expensive than North Sea gas over the past few years, with this gap helping Britain save about £2.5 billion in 2025.
“To minimise the cost of energy for the UK, the UK needs to maximise its own gas production,” Wheaton added.
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