"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Thursday, April 24, 2008

INEOS strike - effect on UK energy supplies

Euan Mearns has a post at the Oil Drum about the vitally important role that INEOS Grangemouth plant plays in UK energy supplies. Ineos, the company which owns Grangemouth, has already begun shutting down the refinery, which is being run on a care and maintenance basis. Once completely shut, it will at least a month to bring back into full operation, Ineos says. (Daily Telegraph)

This chart provides background to the current (and rapidly rising) gas price - at the end of the winter, when demand and prices should be falling. You can check the APX day ahead gas price here

Grangemouth lies at the end of the Forties oil pipeline system that gathers oil (and liquids) from oil and gas fields throughout a large area of the Central North Sea.

Phased closure of the refinery is proceeding and on Saturday this will include shutting down the refinery's power generation plant that is shared with the neighboring Kinneil pipeline terminal operated by BP. (Reuters)

Around 700,000 bpd oil production and some 70 million cubic meters per day associated gas production may be lost. That is about 25% of UK daily gas consumption. It seems likely that the UK can meet this gas shortfall for a few days from gas storage....

Impact of Grangemouth closure on gas supplies

In spring gas storage is run down. Currently the UK has Medium range storage to provide about 27 MCM / day for around 9 days and long range storage (Rough storage facility now 27% full) around 42 MCM / day for about 18 days from current known stock levels. Short range storage is full and can provide 18 MCM per day for 5 days - LNG and short range storage.

Currently the UK has 50 MCM/day import capacity through the Zeebrugge/Bacton interconnector - assuming zero exports. It is currently running at 40MCM/day so little room for any extra.

Impact of Grangemouth closure on liquid fuel supplies

Grangemouth is the only oil refinery in Scotland producing gasoline, diesel, fuel oil and jet fuel for the whole of Scotland, Northern Ireland and Northern England. In theory the UK has ample stocks of refined fuel and so the real issue for Scotland is the distribution of these stocks.

Chris Hunt, director general of the UK Petroleum Industry Association (UKPIA), aid to the BBC that "Planned strike action at a Scottish oil refinery should not be used to increase in the price of fuel at the pumps" ... naturally however many operators are taking the opportunity to restrict supplies and raise retail prices.

Barges of diesel fuel in Europe's Amsterdam-Rotterdam-Antwerp refining hub traded at premiums of at least $51 per tonne to benchmark London ICE gas oil, an $11 gain from the previous evening. Reuters today 2.00pm BST

Naturally somebody has a theory and Rapeseed oil is 98p/litre in Sainsburys so mixed with a bit of diesel ?..it's legal up to 2,500 litres a year.

UPDATE : Thursday 2.00pm BST Statoil Hydro has increased flows through the Langeled pipelone into Easington from 35 MCM/day to 46 MCM/day and could, in theory, increase to 70 MCM/day if prices warrant it.

Interesting factoid. Gordon Brown cannot drive... which is, surprisingly, not a surprise. Probably failed numerous tests having failed to use the rear view mirror.

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