Over 25% of the U.K. gas supplies might end up being brought in by ship at two specially adapted ports at Milford Haven, Wales.

The British Government has agreed to buy gas from Qatar for an initial contract period of 25 years.

As North Sea reserves run out, gas brought over from the Middle East in special giant tankers is now seen as a way of maintaining crucial supplies and making the U.K. less reliant on volatile East European supplies.

And it’s all been made possible by a technology which super cools the gas into a liquid, called liquefied natural gas (LNG). This can then be transported in commercially viable quantities in tankers. Gas in it’s natural state would take up far more space than as a liquid, making it too expensive to tanker across thousands of miles.

In an investment worth some £13 billion, the two new special LNG terminals at Milford Haven include special LNG plants, and storage and docking facilities.

Ironically, the first ship bringing in the gas, The Tembek, was met by protesters who have campaigned against the idea for years. They claim that not only is LNG highly dangerous if there was a leak, but that the shipping lane approach to Milford Haven is just too narrow to safely handle a vessel of The Tembek’s size. They fear a catastrophe along the lines of Buncefield (when an oil storage depot literally exploded in 2005).

The Tembek had to wait for the tide so it could berth at the new South Hook terminal. The larger of the two new ports, it was built as a joint venture between Qatar Petroleum, ExxonMobile and Total.

The second terminal is expected to become operational later in 2009 and this was built in a partnership between Malaysia’s state oil firm Petronas, British Gas and the Netherland’s based 4Gas.

Once the gas has been offloaded and stored at the two ports, it will then be heated up and returned to its natural state, and then pumped long a new pipeline running from the ports to Gloucestershire.

Guest Article by Neil Camp

As we all know 2008 saw the price of gas and electricity go through the roof and for many domestic consumers this has meant they literally can’t afford to heat their houses and turn their lights on. In fact, reports now show that over 3 million households are suffering from ‘fuel poverty’ and that the majority of the country are paying over 10% of their income just towards their fuel bills. There is however a light on the horizon and many of the big gas and electricty providers have recently revealed their intended price cuts to the nation. But who is offering the best deal?

Scottish Power
Scottish Power cut their Price Sure fixed rate tariff by 10% in January which means that the average household will save around £80 this year as dual fuel customers. Unfortunately the company hasn’t mentioned the effect that the price cut will have on their other tariffs – if any – and so I can’t comment further on this.

Scottish and Southern
Scottish and Southern are part of a larger group however they have independently announced their gas and electricity price cuts which will come into effect from the end of March 09. As things stand they intend to cut gas prices by 4% and electricty by 9% and this will save the average dual fuel customer around £66 per year. Here there is no mention of specific tariffs and so it is assumed that the price cut is good for all customers.

British Gas
Everyone waited in anticipation to see what Bristish Gas would do when the first of the price cuts were announced at the beginning of the year. Not surprisingly they have virtually matched the other providers and are cutting prices by 10% on most tariffs from 19th February 09. For dual fuel customers this can mean a saving of well over £100 per year, depending on your annual consumption.

N-Power
And finally N-Power who have gone down a slightly different route. Their price cuts are to come into effect from May 09 and are set at a whopping 16% for gas but only 3% for electricty. This is fantastic news for households with a large gas consumption but for the rest of us – providing we are dual fuel customers – it averages out at around 10% overall saving again so no real difference from the rest.

In Conclusion
It seems that the price war has started but nobody really wants to take hold of the reins. All of the large providers are offering similar price cuts and so the one you go with will depend on your annual consumption and the unit price they’re offering. Costs are still around 50% higher than they were in 2007, even with the new reductions, and so there are still going to be millions of households struggling to pay bills. You should do your homework and shop around for the exact tariff that suits your needs so that even if the price cuts are temporary, you can still take full advantage of them.

Guest Article by Clare Lynock

The spat between Russia and the Ukraine is telling most European countries one thing: they’re in trouble.

No country should be in the position of having another effectively control its energy supply. And Russia has shown that if it doesn’t get it’s own way, then it will sulk by switching off the supplies.

Most of us remember that not so long ago, Russia used to be called the Soviet Union of Socialist Republics and from the end of the second world war until the collapse of the Berlin wall, it was enemy number one.

NATO spent all its time thinking of new ways to cope with the imminent Soviet invasion. The U.S. had literally thousands of missiles pointing towards Russian cities in readiness for a nuclear war that seemed inevitable.

But then the end of the Cold War was upon us before we really realised and Russia sank into almost anarchy and confusion. After some awkward years in rode ex-KGB man Vladimir Putin to put things right again. Suddenly Russia had it’s pride back and the military was told that the good times had come again.

And what with a large chunk of the world’s resources in the shape of oil and gas, Russia knows that it now pulls the strings of many of the smaller European countries. And especially those that were former Soviet satellites. Look what happened to Georgia when it decided to cosy up to its newly found U.S. ally.

Russian tanks were sent in to show the world that the old Soviet ways are back and just because you might see the U.S. as your best mate, don’t rely on them to cross the pond and send you some troops. They have enough on their plate as it is.

So, for any country that relies on Russia for it energy supplies, prepare to dance with the Bear, otherwise you might quickly grind to a halt.

The U.K. doesn’t need to take dancing lessons yet, but with it’s own oil and gas supplies dwindling, it has to start thinking of new ways of generating energy. It takes a lot of gas from Norway, but is that reliable? If the Cold War begins a new chapter and the Russians are not that many miles away from the likes of Norway, how quickly could the taps be turned off?

For many of course the only answer is to do as the French have done and go nuclear. Soon the U.K. Government will start work on a new generation of nuclear power stations, no matter what the green lobbyists might say in protest. The Government believes that wind power will not save the day and that if the U.K. is to remain secure in its power supply, then a technology which could wipe us out in a second if mistreated, could ironically save us from international threats.

So stand by. The nuclear power stations are set to make a return.

Guest Article by Neil Camp

As the row between Russia and Ukraine intensifies and the gas gets switched off, what does it mean for U.K. consumers?

The good news, in terms of supply, is that the spat between Russian and its former Soviet satellite Ukraine, will not mean shortages for UK customers. The bad news is that the cold snap and some increased demand from Europe, has raised wholesale prices which dashes hopes of a quick credit crunch price drop.

The U.K. only gets around 2% of its gas from Russia, unlike many mainland countries which are dependent on their large Eastern neighbour to keep the taps open.

With Ukraine as the hub of many of the supply pipelines to countries like Greece, Turkey, Italy and France, then shortages are inevitable as the supplies are switched off. Russia claims that Ukraine is stealing gas meant for elsewhere and so has to stop all gas being routed through that country. Ukraine denies this, but did admit to one news source that it had tapped off some gas for ‘technical reasons.’

The great thing for the U.K. is that most of its gas is sourced from the North Sea which, although now getting less, still accounts for a fifth of its supplies, with the rest coming from mainly Norway through a purpose built pipeline.

The cold snap was one of the main factors between the recent hike in the same-day delivery price of gas to around 73p a therm from around 61p.

Some U.K. gas has been switched back into mainland Europe in order to help the Russian situation, an action which again has prevented a fall in the gas price. And there has been some technical stoppages at British gas producers in the last few weeks, although these are understood to have been quickly rectified.

But there is better news on the horizon, with hopes that the gas price will soon tumble and follow the way of the oil price. Some say this has been flagged by the decision from Scottish Power to introduce a fixed price gas tariff, which offers a 10% discount to the standard price.

Good news, although consumer groups fear that any worsening in the East European situation, although both parties are meant to be in quite advanced talks to resolve the crisis, will mean that the gas price won’t yet receive the credit crunch dividend. British producers, looking across at their struggling mainland European neighbours, won’t be able to resist picking up better prices for selling gas over there, as well as here.

Guest Article by Neil Camp