In the UK, natural gas is indigenously produced in the form of methane from the North Sea. It is transported with the help of key trading partners and well-established pipeline infrastructure inland. In 2005, the UK began importing LNG for commercial use. The imports were minimal until 2008, peaking in 2011.
At the same time, the UK market is unique in several ways. It has access to global LNG markets through three pipeline connections and import terminals to Norway and Europe. However, it has limited short-range storage. This is the direct impact of the 2017 decision to discontinue using the large Rough site as a storage facility and instead produce the cushion gas from the same. As a result, the UK majorly relies on imports to sustain domestic gas production. Its main external supplier is Norway, and the international LNG producers include the US, Qatar, and Nigeria. This also makes the market vulnerable to price increases and competition with other gas buyers.
Further, the surging wholesale gas prices have led to the UK prioritizing its domestic industry. For instance, the high prices have disrupted the function of the two fertilizer production plants of the US-based CF industries in the UK. Moreover, the UK is evaluated to pause exploration licensing activities to comply with environmental criteria. Such aspects constitute the UK LNG market.