Britain is expected to rely even more heavily on natural gas imports this winter, exposing it to potential price spikes in a tight global market despite recent additions to domestic supply.

North Sea gas output, which covers about a third of British winter demand, is forecast to decline by about 5% this heating season, the UK’s gas-grid operator said in its winter outlook. To make up for the shortfall, imports of liquefied natural gas are set to jump 5% and pipeline flows from Norway are seen adding 1%.

The country will have “sufficient gas supply capability” even under severe stress conditions, National Gas Transmission Plc said. But “strong European LNG demand could intensify competition for cargoes and place upward pressure on prices.”Energy bills in the UK have surged together with global oil and gas prices in response to continued supply disruptions in the Middle East. High costs of living are dealing a major blow to Prime Minister Andy Burnham, with UK gas futures nearly tripling this year to the highest since 2022.

Read Also: Burnham Floats Removing Gas Bills Fee to Blunt Price Surge A separate forecast from the UK’s National Energy System Operator said the country will also have less spare power capacity this winter than last year, as electricity demand is expected to rise.

The UK’s power generation margin — the amount of spare supply available when demand peaks — is expected to fall to 9.5% this winter from 10% last year, the National Energy System Operator said. The buffer has grown steadily in recent years and, despite the slight drop, remains close to its highest level since 2019.

Just a day before publishing the outlook, National Gas announced an agreement to preserve import capacity on a pipeline linking Britain with Belgium. Energy regulator Ofgem said the country would have faced a supply shortage risk without the intervention under certain extreme scenarios involving freezing weather, high gas demand or a loss of critical infrastructure.

Actual gas imports from the EU are still expected to be minimal — in line with last winter — but there could be higher volumes during cold weather, National Gas said. In power supply, higher wholesale power prices — more than double the levels this time last year — signal the UK is expected to remain a net importer this winter, according to NESO.

Peak demand — expected only occasionally this winter — is forecast to increase during the heating season by more than 2% to 493 million cubic meters per day, driven by the power sector. Overall winter gas needs for electricity generation are forecast to be lower than previous years thanks to stronger renewables, but the system will still have “periods of very high daily demand this winter, alongside significant within-day demand changes,” National Gas said.

The gas outlook includes assumptions for new North Sea capacities, and the recently approved Jackdaw field could provide a modest upside to the forecast if it achieves its anticipated production levels during the heating season, National Gas said. The government officially approved the contentious project this week, saying the field may start supplying gas by the end of this month and “would make a small but meaningful contribution to gas margins for this winter.”