Energy bill hikes are set to grow as a three-week shutdown of Britain’s main North Sea pipeline sends prices soaring.
The Forties Pipeline, which carries 40 per cent of the country’s oil and gas, will be closed after a hairline crack was discovered during a routine inspection south of Aberdeen.
The shutdown, announced on Monday, comes at a time when Britons are bracing themselves against plunging temperatures, with minus 13C recorded over night.
While a gas explosion at a major processing facility, in Austria, has disrupted supply across Europe and lead to fuel prices rising by a third.
The Forties Pipeline, operated by Ineos, will be closed after a hairline crack was discovered last week during a routine inspection (pictured, the Ineos refinery at Grangemouth)
Experts have warned the Forties Pipeline temporary closure could have major ‘implications’ for the nation’s oil industry.
Ripples have already been felt, with gas prices with an increase of 1.6 per cent at £49.28 a barrel of Brent Crude oil, the highest rise in prices since 2015.
While natural gas prices for same-day delivery in Britain rose by nearly 30 per cent yesterday, the highest since 2013.
Fiona Legate, a analyst from Wood Mackenzie, told the Financial Times: ‘A shutdown of the Forties Pipeline System, even temporary, will have wide-reaching implications for the UK oil and gas industry.
‘Companies with fields utilising the FPS export route will suffer from reduced cash flows during the shutdown period.’
However, while Britons fear splashing out on soaring utility bills, the Government said there is no problem with supplies coming into the country.
A UK government spokesperson said: ‘There is no security of supply issue for fuel or gas supplies as a result of the repairs needed to the Forties pipeline.
‘The government will continue to liaise with industry operators to monitor the situation to ensure repairs are undertaken as quickly as possible.’
The Forties Pipeline, bought by petrochemical giant Ineos from BP just six weeks ago, takes mainly oil to the company’s refinery at Grangemouth, near Falkirk.
After the small crack was discovered last week, a 300-metre cordon was set up and some local residents were placed in temporary accommodation, while the pipeline pressure was reduced while a full assessment was made.
Andrew Gardner, chief executive of the Ineos Forties Pipeline System, said workers found a hairline crack in the pipe last Wednesday which then started to grow despite efforts to repair it.
He told BBC Good Morning Scotland: ‘Over the weekend we noticed the crack starting to develop and grow further.
Energy bill hikes are set to grow as a three-week shutdown of Britain’s main North Sea pipeline sends prices soaring
The Forties Pipeline brings in 40 per cent of Britain’s oil and gas, mostly to this refinery in Grangemouth, Scotland
‘It was about 10cm and it grew another couple of centimetres. We reduced the pressure further and then at that point the crack still grew, so the only safe option was to take the system down so we could be convinced that we could stop the growth of the crack and get in and do a proper permanent repair.
‘It was a straightforward process when the crack was not moving. Now that the crack is propagating we need to be very careful that whatever repair isn’t just masking a crack underneath, so it will probably be a little bit more complicated than what we thought it was going to be, hence why we need to take the system down.’
Asked how long the system was likely to be down he said: ‘We’re estimating just now between two and three weeks.
‘Overnight the system has come down, we’ve been making it safe and now we need to get in and inspect further and the results of that inspection now that the system is safe will obviously determine the repair mechanism.’
Meanwhile, a serious incident at a gas plant in Baumgarten, near Austria’s border with Slovakia, killed one person and left 21 others injured, today.
An inferno rages after an explosion at a gas processing plant in Baumgarten, near Austria’s border with Slovakia, today
Firefighters deal with the aftermath of an explosion at a major processing facility in Austria
Police wrote on Twitter that the explosion was triggered by a ‘technical cause,’ but did not elaborate and said that local authorities are investigating.
Gas Connect said it also suspects an unspecified technical fault.
Gas Connect describes the Baumgarten plant, where pipelines bringing gas from Russia, Norway and other countries connect and gas is compressed and cooled, as one of Europe’s most important gas supply hubs.
‘Austria’s natural gas supply can be covered for the foreseeable future,’ Gas Connect said on its website.
However, ‘transit through Austria to the south and southeast regions is currently negatively impacted,’ it added.
Neighboring Italy’s Economic Development Ministry declared an emergency after the explosion interrupted the flow of natural gas to the country, but said Italy’s supply of gas would be ensured by existing stockpiles.
Claudio Descalzi, the CEO of Italian oil and gas company Eni, said that industry operators can compensate even if the interruption continues for weeks and aren’t alarmed, although he said that if it continues for a prolonged period there could be an impact on prices.