Page 13 - EurOil Week 38 2022

EurOil POLICY EurOil

Netherlands can cut gas output at Groningen

further, says grid operator

NETHERLANDS THE Netherlands can go ahead with its plan to The Netherlands benefits from access to LNG
reduce gas flow further from the giant Gronin- imports and piped supplies from Norway and its
Groningen is due to gen field at the end of this month, its gas grid other neighbours. It is launching a new 8 bcm
cease production operator GTS has advised, despite soaring gas per year floating LNG (FLNG) terminal near
entirely in October prices and the risk of Russia halting deliveries to Groningen this month, to further shore up its
2023. Europe entirely. energy security.
Groningen is due to cease production in To shield consumers from the high cost of
October 2023, as part of a phased closure energy, the Dutch government announced on
ordered by the government because of the small September 20 that a price cap would be imposed
earthquakes that field activity has been causing on energy contracts from January 1, 2023, at the
over the decades since its launch in the 1960s. level that prices were at in January 2022. The gov-
The production quota for the year ending Octo- ernment also intends to hike minimum wages
ber 1, 2022 is set at only 7.6bn cubic metres, and and raise taxes on corporate profits as part of a
it is due to be curbed to just 2.8 bcm the follow- $17bn support package for households.
ing year. The move comes as Dutch citizens face a
In a statement on September 19, GTS said record drop in purchasing power amid fallout
it had advised the government that this could from Russia’s invasion of Ukraine and the energy
remain the plan, in light of recent European crisis.
efforts to stock up on gas supplies ahead of win- “More than a million people are at risk of liv-
ter, and the demand destruction that has been ing in poverty,” Finance Minister Sigrid Kaagsaid
caused already by high prices. Europe’s gas in an address on September 20. “That is why the
storage facilities have now been filled to 86% of cabinet is coming up with a big fund to ease the
capacity and injections continue, while the Neth- impact of inflation and energy prices.”
erlands has filled its facilities to 87% of capacity, The windfall tax on companies produc-
despite losing some of its Russian supply earlier ing oil and gas is anticipated to raise €2.8bn
this year, after buyers refused to comply with ($2.8bn) in 2023 and 2024, while higher gas
the Kremlin’s decree on payments being made revenues from Groningen and other mining
in rubles. activities is set to bring in a further €8.5bn.
As NewsBase has reported, Groningen’s Other European countries have also intro-
production could be ramped up to 20-25 bcm duced windfall taxes on the energy sector, and
per year at short notice if the move is deemed European Commission President Ursula von
necessary. That decision would lie with the der Leyen laid out plans for a windfall tax that
government. would raise some €140bn. ™

Week 38 23•September•2022 www. NEWSBASE .com P13