LONDON, June 12: Britain runs the risk of gas shortages again this winter if the weather is exceptionally cold, and energy prices will stay high despite plans to boost imports, investment bank Morgan Stanley said on Monday.

Britain's gas market, Europe's biggest, is tight because of a drop in production by ageing North Sea fields.

“Weather will be critical (this winter),” said Morgan Stanley in a research note. “Supplies may not be sufficient in a very cold winter although demand-side management would probably mitigate against this.”

Wholesale gas prices shot to record highs last winter as cold weather sparked a surge in demand and left the market short. The price rise triggered a fresh round increases in energy bills, which have risen sharply over the last two years.

Last winter, a gas crisis was averted when big users like power stations reduced their demand for gas voluntarily and sold the gas on the spot market where it fetched attractive prices.

About 40 per cent of Britain's power comes from gas-fired plants, so high gas prices also force up electricity prices.

Forward gas and power prices for this winter recently have pulled back from record highs though they are still higher than spot prices seen last winter.

Morgan Stanley forecast supply to the UK market this winter would peak at 482m cubic metres (cm) per day, down from 493m cm last winter, mainly due to lower flows from the North Sea.

Several projects to import gas by pipeline and by tanker are being developed, but it is unclear how much gas will actually arrive even if the projects launch in time for this winter.

Last winter, imports through a pipeline from Belgium were lower than expected, despite soaring demand and prices in Britain which should have attracted a surge in imports from mainland Europe.

Import projects scheduled to launch this winter are new pipelines to pump in gas from the Netherlands and from Norway, and a terminal to receive liquefied natural gas from a variety of sources.--AFP