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Britain's Gas Price Soars to Record on Pipeline Closure

Friday, 22 Mar 2013 | 4:05 AM ET

Britain's wholesale gas prices surged to a record high on Friday, after one of its three gas import pipelines shut down unexpectedly.

The operator of the UK-Belgium Interconnector pipeline said a technical problem had forced the shutdown, without giving more details.

If the pipeline remains shut for a number of days, Britain's grid operator will be forced to trigger all emergency supply options, including reducing demand from contracted users, which will cause an even higher price spike, traders said.

The British gas market has been under severe strain after weeks of cold weather drained gas storage levels.

(Read More: Turkey May Block Use of Natural Gas for Cyprus Bailout)

Gas prices for within-day delivery spiked at 150 pence per therm, more than 50 percent above Thursday's closing price.

"I don't think the price has ever been higher. It's certainly super spike territory," said a gas trader at a utility. "The worrying thing is it can probably go higher."

The Interconnector is one of Britain's main gas import pipelines and on Wednesday set a new record exporting 783 gigawatt-hours of gas from Belgium to Britain.

(Read more: Oil markets)

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