Released on = May 4, 2007, 4:23 am

Press Release Author = Shushmul Maheshwari

Industry = Energy

Press Release Summary = UK’s mounting dependence on imported natural gas got a
grim relief past winter when declining production in the North Sea, freezing
temperatures, under used storage capacity and import pushed the spot prices up.

Press Release Body = In UK, around 40 Billion Cubic Meter of storage capacity and
new import will be online by 2006 end, but still the country is going through the
phase of low flexibility in its natural gas system and the doubts over whether the
nations has enough supplies to fill its demand-supply gap are still looming.

The UK Met Office (Meteorology Office) welcomed the fiscal 2005-06 winter with the
surmise that the season was going to be extremely cold and showed its concerns over
the matter that the country didn’t have the needed gas import capacity to deal
with such low temperature. It was an indication towards the tight supply-demand
situation in coming winters.

Consequently, the prices soared in the winter, from £0.53pertherm (US$1.01/therm) to
£1.18/therm. The highest spot price was recorded towards the receding winters when
Rough, the largest gas storage facility of UK, had to be shut down following a fire.

The gas deficit compelled Ofgem, an energy regulator, to ask the power industry and
power station operators to go for alternative fuels, and start a probe into low
capacity usage on IUK (United Kingdom–Belgium Interconnector) and a EU probe
into reserve procedures in Europe.

The happenings in winter of 2005-06 can be considered to draw an idea of the
possible conditions UK could encounter in winter 2006-07. In winter of 2005-06,
collective gas demand in UK crossed 55 Billion Cubic Meter, as against the
‘normal’ demand of around 57 Billion Cubic Meter.

One estimate says that domestic gas production will drop to around 41.76 Billion
Cubic Meter this winter from 42.68 Billion Cubic Meter in 2005-06 thereby taking the
country to more a sluggish position. This is in spite of the completion of United
Kingdom–Belgium Interconnector’s (IUK) expansion that raises the
UK’s supply potential by 7 Billion Cubic Meter.

According to the RNCOS report “European LNG Market Analysis”, UK is
quite rich in coal, oil, and natural gas, and has the largest energy sector in EU.
But the energy reserves of UK are depleting and hence, can no longer support the
country’s demand.

The marker research report provides a comprehensive analysis of the European LNG
market with focus on distinct markets, demand-supply statistics, and industry
analysis. The report puts forth a brief overview on the competitors operating the
European region.

About RNCOS E-Services Pvt Ltd.:

RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of
industry experts who analyze data collected from credible sources. They provide
industry insights and analysis that helps corporations to take timely and accurate
business decision in today\'s globally competitive environment.

For more information visit: http://www.rncos.com/Report/IM0304.htm
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Web Site = http://www.rncos.com

Contact Details = RNCOS E-Services Pvt Ltd.
Shushmul Maheshwari
Head of Business Development
29, 1st Floor, Patparganj Industrial Area, Delhi 92
91-11-4214-1229
info@rncos.com