Oil and gas prices have surged after an explosion in Austria and disruption to supplies from the North Sea hit the energy market, just as a cold snap drives up demand.
One person was killed and 18 injured at the blast in Baumgarten an der March, the site of one of Europe’s biggest supply hubs, on Tuesday.
The site was evacuated and closed though operator Gas Connect later said it would soon be brought back online.
Gas explosion in Austria causes wider problems for Europe (Provided by: Reuters)
The blast prompted gas prices to surge across Europe, including a 40% rise in the UK to 95p per therm – a level not seen since 2013. A spokesman for National Grid said there was sufficient gas to meet demand.
The outage followed the closure of the Forties pipeline for repairs on Monday after a crack was discovered.
The pipeline, which carries 40% of North Sea oil and gas, is expected to be closed for a couple of weeks while repairs are carried out.
Operator Ineos said in an email to customers: “We have previously indicated a time frame of three to four weeks and we believe it is no less than two.”
Analysts at investment bank Jefferies said: “The timing of the outage could not be much worse as winter weather is just materialising.”
Massimo Di-Odoardo, analyst at Wood Mackenzie, said: “If supply does not resume soon and the cold weather continues, prices will remain strong through the winter.”
He said it could prompt competition between customers in Europe and Asia to import shipments of liquid natural gas.
Oil prices surged, with Brent crude pushing above $65 a barrel for the first time since June 2015, though it later slid back below $64.
Shares in energy giants BP and Centrica rose more than 2% while Royal Dutch Shell climbed more than 1%.
Scottish energy minister Paul Wheelhouse told Holyrood there were no plans to shut down the Grangemouth refinery, which uses Forties crude, and no impact was expected on fuel and gas supplies.
Producers including BP, Shell and Chrysaor said they had closed down oil fields in response.
A trading source told Reuters: “If it is a lengthy outage, then a recovery period for the fields will be long as well.”
The Paris-based International Energy Agency, which advises Western governments and coordinates the release of oil from strategic stocks in the case of supply disruptions, said it was “monitoring the situation closely”.
The Baumgarten plant in Austria receives around 40bn cubic metres of gas each year and redistributes it across Europe, including to Germany and northern Italy.
Operator Gas Connect said there could be interruptions in supply to Italy and Croatia, but not elsewhere.
Italy declared a state of emergency regarding energy supplies, while Russian gas giant Gazprom said it was working on redirecting gas flows to secure uninterrupted supplies to its clients around Europe.
Slovakia’s main gas transit route to Austria was suspended after the fire, Slovak pipeline operator Eustream said.