Page 8 - EurOil Week 02 2022

EurOil POLICY EurOil

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Netherlands expects nearly double this

year’s output quota at Groningen

NETHERLANDS THE Dutch government said on January 6 that track to start up by April 1, 2022, but it will now
it expected to increase the amount of gas permit- come online only in phases during the third
The government has ted to be produced at the Groningen field in the quarter as a result of the impact of previous
previously ruled out a current gas year to 7.6bn cubic metres, up from coronavirus (COVID-19) restrictions. This site
change in policy. a previous allowance of 3.9 bcm. will convert high-calorific gas that is imported
Groningen is the largest gas field in Europe into low-calorific gas like that produced at
outside Russia, but the Netherlands has been Groningen using nitrogen ballasting, reducing
steadily winding down its output following years the need for the field’s output. The delay means
of earthquakes caused by production activities. the Netherlands might need an extra 2 bcm of
The government in September ruled out any gas from the field in the current gas year, the
change to Groningen’s production quota in the ministry said.
year that started October 1, 2021, despite a surge Secondly, Germany’s demand for low-calo-
in gas prices across Europe. But since then prices rific gas is projected to be 1.1 bcm higher this gas
have risen significantly higher, although they year than previously thought. And at the same
have eased back so far in January. time, its low-calorific production is anticipated
In a statement, the Dutch economy minis- to be lower, and a hoped-for reduction in con-
try said that an increase in Groningen’s supplies sumption thanks to energy-efficiency measures
would be needed to guarantee security of sup- has not come about. Germany also began the gas
ply for the Netherlands and other countries that year with less low-calorific gas in storage, mean-
rely on the field’s low-calorific gas. But a final ing that the country’s injections during the com-
decision will not be taken until April, the min- ing summer could be higher than withdrawals
istry said, meaning that no increase in projected this winter.
volumes from Groningen can be expected until These two factors will be partly offset by the
after the winter heating season ends. Dutch Norg storage site entering the heating
The ministry stressed that the plan remained season with more gas in storage than had been
to bring Groningen’s output down to zero by expected.
mid-2022. Originally the closure date was sched- If Groningen does produce 7.6 bcm in the
uled for 2030, but this was brought forward by current gas year, this will mean its output has
eight years by the government in 2019. not changed much from 2020-2021, when 7.77
There are two main reasons for the pro- bcm of gas was lifted. The shift in policy will be
posed upward revision. First, the launch of a welcomed by Dutch industry, although NGOs
new gas quality conversion site in Zuidbroek have already criticised the government for back-
has been delayed. The facility was initially on tracking on plans. ™

P8 www. NEWSBASE .com Week 02 13•January•2022