Economic Report 2018

Increasing renewable generation contributed to an overall demand reduction for natural gas of 2.6 per cent from 2016 to 2017. Warmer temperatures also further reduced demand in 2017, with consumption from domestic final users falling by 4.6 per cent in 2017 compared with 2016. Increased Flexibility in Supply Sources Indigenous natural gas production remained stable in 2017, despite unforeseen external factors such as the temporary closure of the Forties Pipeline System in December. However, there were significant additional volumes from the Rough storage facility in the southern North Sea that helped to manage the supply and demand gap. Rough is now producing its remaining gas reserves (cushion gas), before closure. In order to meet the gap between indigenous production and domestic demand, the UK imports natural gas, primarily from Norway (75 per cent of imports in 2017) via the Langeled, Tampen Link and Gjoa/Vega pipelines. Smaller volumes are imported from Belgium (6 per cent in 2017) via the UK-Belgium Interconnector (IUK) and the Netherlands (4 per cent in 2017) via the Balgzand to Bacton line.

1

2

3

4

Figure 4: UK Gas Supply Sources

120

Indigenous Production (Consumed Within the UK) Pipeline Imports LNG Imports Forecast Total Demand

5

100

6

80

7

60

40

8

20

9

0

UK Primary Gas Supply (Million Tonnes of Oil Equivalent)

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

Source: OGA, Oil & Gas UK

10

11

13