* Gas supplier cuts bills on wholesale price falls
* EDF Energy stops Heysham nuclear unit to refuel
LONDON, Jan 12 (Reuters) - British prompt gas prices made small gains on Thursday as demand for gas was expected to rise more sharply on Friday due to colder weather and on lower flows from the South Hook liquefied natural gas (LNG) terminal which tightened supply margins.
The day-ahead gas contract rose close to its three-week high, trading up 0.40 pence at 54.90 pence per therm at 1119 GMT on Thursday.
The within-day contract also firmed, rising to 54.70 pence, as the market balance was threatened by a 50-percent overnight drop in supply from the South Hook terminal.
Flows rose again mildly on Thursday, but were still below Wednesday's levels, National Grid data showed.
Thursday gas demand rose above levels seen in the previous session but as weather conditions remained largely mild, consumption was still pegged well below seasonal norms.
The recent drop in gas prices due to mild weather and the weak economy led utility SSE to announce a 4.5 percent drop in gas bills from the end of March, one day after rival EDF Energy cut gas prices by 5 percent.
Benchmark front-season gas traded flat at 53.75 pence on Thursday, despite a mild rise in crude prices due to protests threatening Nigerian oil supply.
WEATHER
Thursday temperatures were 1.40 degrees Celcius above seasonal norms, National Grid data showed. <0#NGRID-TEMP>
Weather conditions were expected to turn colder on Friday, with overnight frost starting over the weekend and lasting into next week, the Met Office said.
POWER
Day-ahead electricity prices were driven higher by the prospect of higher demand due to colder weather.
Spot baseload power rose nearly one pound to 42.70 pounds per megawatt-hour (MWh).
The shutdown of EDF Energy's 610-MW Heysham 1-1 nuclear reactor for refuelling also added to bullish momentum. (Reporting by Karolin Schaps)
