What is UK NBP?
The UK NBP gas market is Europe's longest-established spot-traded natural gas market, in operation since the late 1990s. The price of UK NBP is widely used as an indicator for Europe's wholesale gas market, alongside the more recent, but rapidly growing, Continental European trading hubs such as the Dutch TTF.
NBP stands for National Balancing Point. In the NBP model gas anywhere in the country within the national transmission system counts as NBP gas. This brings buyers and sellers together to simplify trade.
The UK gas market has a wide range of gas supplies: the UK's own gas production, piped imports from Norway and Continental Europe, storage, and liquefied natural gas tanker supplies from global markets. Declining North Sea production over the past decade has seen a growing increase in the proportion of supply from imports.
The NBP gas market allows a wide range of participants to buy and sell: oil and gas producers, LNG suppliers, utility companies, power generators, industrial users and financial traders. Gas can be traded over-the-counter between participants and through brokers, or on exchanges.
A variety of delivery periods are traded in the market, including: within-day (for same day delivery), day-ahead (for next day delivery), months, quarters, summers (April to September) and winters (October to March) and annual contracts.