Natural gas is a fossil fuel majorly comprising of methane. As with other fossil fuels, it is formed deep beneath the earth’s surface due to the decomposition of dead plants and animals under extreme heat and pressures. Natural gas is cleaner than most other fossilized fuels. However, its calorific value is lower than the fossil fuels like petrol, diesel, and LPG.

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The gas crunch impacts the United Kingdom’s market growth. Around half of the electricity generated in the United Kingdom is produced by burning up fossil fuels in gas-fired power plants. Over the past few recent months, this trend has surged after the problems faced by the electricity system in the United Kingdom. Older nuclear power plants have been forced to undergo quite unplanned outages for maintenance, and the wind turbines in the country have slowed while facing some of the least windy months since 1961.

The United Kingdom produces natural gas originally from the North Sea in the form of methane. There was a growing rate of natural gas production that had exceeded its demand in the late 1990s, but since then, there was a downfall before stabilizing at around one-third of the overall peak in 2013. There have been lesser demands since 2005. Also, the production was able to meet only around half of the overall demand in 2019.

Further, the imports increased to meet the demand as there was a growing decline in production. From 2010 onwards, the imports of natural gas by pipeline and LNG have been negatively correlated, which implies that LNG is being used to make up for shortfalls or declining supplies when the flows in pipeline got disrupted. The country’s total proven natural gas reserves as of 2020 is 0.20 trillion cubic meters, constituting 0.11% of the total global proved reserves. These reserves form 2.76 times the overall consumption in 2020.

The United Kingdom exports a small amount of natural gas, most of it through the pipeline. There is no LNG production in the United Kingdom. Hence, any ongoing exports of LNG previously imported are given a term of a reload.

Since LNG is highly flammable and major exporting takes place by the sea, many regulations are to be followed by the industry players. Key regulatory authorities that govern the LNG industry in the country are Department for Business, Energy and Industrial Strategy (BEIS), the Office of Gas and Electricity Markets (Ofgem), and the Office of Unconventional Gas and Oil (OUGO).

The top LNG companies in the country are Shell, Perenco, Spirit Energy, and others.

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