So, how does it actually work?

At its simplest, Britain’s gas market matches supply and demand.

Think of it a bit like a marketplace. Gas shippers buy gas from different sources and sell it on to their customers. Their role is to make sure they’ve secured enough gas to meet demand, whether that’s keeping homes warm, powering industry or generating electricity.

A market-led system (and why we have one)

Britain’s gas supplies are largely determined by an open, competitive market, introduced through reforms in the 1980s and fully opened up to competition in the 1990s.

The idea is that this encourages efficiency and ensures prices respond to supply and demand. 

Most of the time, this works well. Prices don’t just go up, they also fall when supply is strong or demand is lower. And because companies are financially responsible for meeting their customers’ needs, they’re incentivised to plan ahead and respond quickly when things change.

Overseeing this system is Ofgem, the independent regulator, which sets the rules of the market and ensures it operates fairly and effectively for consumers.

Where does National Gas fit into all of this?

If shippers are buying the gas, we’re the ones moving it around the country.

Gas Shippers book capacity on our network, a bit like buying a ticket to travel. That gives them the right to flow gas from entry points (like terminals or storage sites) to where it’s needed across Great Britain.

Our role is to keep that system running safely and reliably, making sure everything stays in balance so supply matches demand in physical terms. That means the amount of gas entering the network must match what’s being used every day.

A diverse range of supply

One of the strengths of Britain’s market is that it doesn’t rely on a single source of gas. Instead, supply comes from a mix of:

• Domestic production from the UK Continental Shelf
• Pipeline imports (particularly from Norway)
• Liquefied natural gas (LNG) delivered by ship
• Gas storage facilities
• Interconnectors with Europe

The exact mix changes every day. Cold weather, global demand, or prices elsewhere in the world can all influence where gas comes from, which helps keep the system flexible.

How prices determine gas movements

Prices play a central role in keeping everything balanced.

They send signals across the system that influence behaviour. For example:

• Storage facilities can inject or withdraw gas in response to price changes
• Pipeline imports can increase or decrease depending on demand or prices across different markets 
• Interconnectors allow for the movement of gas between Great Britain and continental Europe in response to price differences
• LNG cargoes can be redirected to wherever prices are highest globally

A system connected to the world

Great Britain’s gas market is increasingly influenced by global events.

As domestic production has declined, imports now play a bigger role. That means what happens internationally, from weather patterns to geopolitical events, can affect supply and prices here at home.

This adds flexibility, but it also means the system can be influenced by factors outside of our control. 

Looking ahead: is the market fit for the future?

Britain’s market has historically delivered reliable supply, supported by diverse sources, flexible infrastructure and responsive market signals.

But the context is changing.

Domestic production is declining, demand is evolving, and global markets are playing a bigger role in determining where gas flows. That means security of supply can’t be taken for granted, it depends on how the whole system works together under pressure. 

The real test isn’t just whether the market works on a normal day, but whether it continues to deliver during periods of stress, for example, when demand is high, supply is constrained, or global markets are volatile.

That’s why security of supply is about more than access to gas. It depends on:

• Deliverability - can gas physically reach where it’s needed?
• Flexibility - can the system respond quickly to changes in demand or supply?
• Resilience - can it withstand shocks and continue to operate effectively?

In our response to the Government’s Gas System in Transition: Security of Supply consultation, we highlighted that maintaining this resilience will require the right combination of:

• Supply diversity (including storage, LNG and imports)
• Strong infrastructure across the network
• Market frameworks that support long-term reliability
• Clear and robust security of supply standards

Because ultimately, a well-functioning gas market isn’t just about efficiency, it’s about confidence that the system will deliver when it matters most.