National Grid to sell stake in gas unit

UK power operator National Grid plans to sell a majority stake in its gas distribution business.

The company said it wanted to "realise the value it has created in the networks" and would return the money to shareholders.

National Grid's gas business owns 82,000 miles of pipeline, and delivers gas to about 11 million domestic, industrial and commercial customers.

The company reported a 15% rise in half-year pre-tax profit to £1.348bn.

Asked about the fears of power supply shortages this winter, Steve Holliday, National Grid's chief executive, told the BBC's Today programme that the winter would be "tight but manageable" under normal circumstances.

He added that the extra measures that National Grid had taken to deal with the tightness of supply were the cheapest way, at a cost of 50p per household, to balance supply and demand.

Last week, it was forced to ask the power industry to generate more electricity, as well as request that heavy users switch to back-up supplies, as a result of multiple energy plant breakdowns. That was the first such request since 2012.

The company expects to issue seven more of these alerts - known as a Notification of Inadequate System Margin (NISM) - this winter to balance supply and demand for electricity this winter.

In July, it warned that this winter would see the tightest supply margin for power since 2009.

The sale of the gas pipelines is expected in 2016.

"The UK gas distribution business has been an important part of National Grid and the sale of a majority stake will realise some of the value we have created for our shareholders," Mr Holliday said.

The Sunday Times has previously reported that the business could be worth £10bn.