Decision on Groningen Cap Due Friday
A preliminary decision on the future level of gas production from the giant onshore Groningen field is expected at about midday June 24, a spokesman for the Dutch economy ministry has told NGE.
Dutch newspaper De Telegraaf reported two days ago that the country’s state mining inspectorate SODM had recommended the cap be set at 24bn m3/yr – 3bn m3/yr less than the current cap.
The economy ministry however said it would not comment on advice presented to the ministry until after Dutch economy minister Henk Kamp’s preliminary decision is published. Several reports would be published in conjunction with that decision, which the ministry said was likely after the Dutch cabinet meets on June 24 or else after the cabinet’s next meeting on July 1.
Dutch economy minister Henk Kamp (Photo credit: Dutch government)
Several earthquakes, peaking with one of 3.6 magnitude on August 16 2012, have been officially blamed on gas production at the giant field, and hundreds of households have filed a lawsuit for compensation to their damaged properties. Most tremors since have been more slight, although 2.3 magnitude 'induced' quakes were felt in the Groningen area on September 30 and October 30 last year, plus a separate 3.1 also on September 30.
Kamp’s decision will not be the final one. A consultation period will then commence, based on his preliminary decision and the accompanying reports, with a definitive decision not expected until late September – ahead of implementation for the 12-month gas year starting this October 1.
Last year a Dutch court imposed a 27bn m3/yr cap going forward on Groningen – half the 54bn m3/yr produced by Europe’s largest gasfield in 2013 – although it provided some leeway to increase the new cap slightly in the event of an exceptionally cold winter.
The field is a swing producer whose output can vary at very short notice depending on demand, so produces most in winter. It is relied on heavily by Dutch gas marketer GasTerra to meet domestic and export demand.
Groningen is owned 60% by NAM and 40% by state holding EBN, and NAM’s owners Shell and Exxon both reported significantly lower year-on-year gas production volumes and earnings from the Netherlands in 2015.
Mark Smedley | www.naturalgaseurope.com