Significant Savings from Domestic Gas Production#

According to a recent analysis by Stifel, UK North Sea gas production saved the country approximately £2.5 billion in 2025 compared to the costs of imported liquefied natural gas (LNG). This financial relief is expected to increase in 2026 as global LNG prices rise, influenced by ongoing conflicts in the Persian Gulf.

Breakdown of Gas Supply Sources#

In 2025, UK North Sea gas accounted for about 45% of the country's total gas supply. The remaining supply came from Norwegian piped gas, which provided 35%, and LNG imports, which made up 20%. Data from the Office for National Statistics and the Department for Energy Security and Net Zero indicates that imported LNG has been significantly more expensive, costing an average of 18 pence per therm more than domestic North Sea gas over the past three years.

Price Comparison and Future Projections#

From 2018 to 2025, the average price for LNG imports was 91 pence per therm, compared to 80 pence for UK NBP gas, highlighting a 13% premium for LNG. This price difference contributed to the substantial savings of £2.5 billion for 2025 alone. Stifel suggests that reforming the government’s windfall tax on North Sea producers could stabilize production and potentially generate an additional £25 billion in revenue by 2035.

Future Energy Needs#

Looking ahead, the Climate Change Commission estimates that the UK will consume around 12 billion barrels of oil equivalent by 2050, even under a net-zero emissions scenario. Notably, only 25% of UK gas is currently used for power generation, indicating that the government's Clean Power 2030 targets will not eliminate the demand for gas. The UK is projected to need 35 gigawatts of gas-fired power capacity beyond 2030 to support renewable energy sources. Under the National Energy System Operator’s Holistic Transition Net Zero scenario, which anticipates over 180 gigawatts of renewable generation by 2035, the UK will still require 40 billion cubic meters of gas annually. The government plans to enhance LNG import capacity while keeping the windfall tax on domestic gas production in place.