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UK GAS-Prices decline due to milder temperatures, wind output

LONDON, Jan 22 (Reuters) - British wholesale gas prices declined on Monday morning as milder temperatures forecast for this week and strong wind output reduced demand.

* Day-ahead gas price declined by 0.25 pence to 49.15 pence per therm

* Gas for February was down 0.55 pence at 49.85 pence per therm

* "Demand is down due to above average temperatures and wind," a UK gas trader said

* Average temperatures are forecast between 8 and 13 degrees Celsius this week, according to the UK Met Office

* "Today we begin a week of substantially milder conditions with average temperatures staying above normal until Friday," said Thomson Reuters (Dusseldorf: TOC.DU - news) gas analyst Katarzyna Piaskowska

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* "Wind power generation remains strong this week and wind speeds are going to fall to normal only on Friday but will return to higher levels from the weekend," she added

* Peak wind generation is seen at 8.5 gigawatts (GW) on Monday, rising to 9.9 GW on Tuesday, Elexon data shows.

* Imports from continental Europe via the InterconnectorUK pipeline have risen compared to Friday and there are healthy stocks in storage facilities

* However, flows through the Vesterled pipeline from Norway are down due to pipeline maintenance and an unplanned outage at Heimdal gas field

* Uk Continental Shelf production is also lower. There is an ongoing outage at North Morecambe gas sub-terminal, whose restart date has been repeatedly pushed back. It is scheduled to return on Jan. 24 but given previous delays, it could be inactive into February, analysts said

* Demand is forecast at around 326 million cubic metres (mcm) and flows at 317 mcm/day, National Grid (LSE: NG.L - news) data shows, meaning the system is undersupplied by 9 mcm.

* Day-ahead gas price at the Dutch TTF hub down 0.17 euro at 18.38 euros per megawatt-hour.

* Benchmark Dec-18 EU carbon contract inched up by 0.05 euro to 8.81 euros a tonne

* Thomson Reuters analyst view:http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageid=united-kingdom-gas (Reporting by Nina Chestney)