Dutch GasTerra Prepares to Wind Down

GasTerra, the monopoly purchaser of Groningen gas, is preparing to be gradually phased out at some point after 2022, it said October 8. 

It said that stopping gas production in Groningen means GasTerra's core activity will no longer exist in the long-term. The field's output of low-calorie gas could stop in the next three years. While GasTerra still has long-term supply contracts with Italian Eni and German Uniper to honour, the last of which expires in 2029, delivering the right gas quality is the responsibility of state-owned Gasunie, which has been investing in nitrogen injection facilities. The gas from other Dutch fields is marketed by other companies as well as GasTerra.

GasTerra said that the joint shareholders – the government (50%), ExxonMobil (25%) and Shell (25%) – “have therefore asked GasTerra’s management team to prepare a plan which ensures that operations are phased out gradually with the company continuing to fulfil its obligations.”

The US major and the Anglo-Dutch major are also the sole shareholders in NAM, licensee of the giant Groningen field, where gas production has led to serious structural damage to houses in the region.

GasTerra said the economy minister Eric Wiebes had informed the Dutch parliament, and its own employees have been informed. "The phasing-out plan seeks to ensure that GasTerra can, in the coming period, continue to contribute towards a responsible reduction in gas production from the Groningen field and also fulfil its long-term obligations. A redundancy scheme will be set up for the company's employees, numbering around 165.

"GasTerra plays a pivotal role in the Dutch gas supply and gas market. Although GasTerra is entering a time during which it will be scaling back operations, it will do its utmost to ensure its core tasks are performed properly. The company's contractual obligations will be fulfilled. GasTerra will also continue, for the time being, all its social, cultural and energy-transition-related activities in the town and province of Groningen," it said.

CEO Annie Krist said  that GasTerra's history "goes right back to when gas production started in Groningen, in the early 1960s. Our company's activities have now reached their final stage but they will be just as essential in the years to come as they were in the past. We now have our most important task of defining the planned phase-out responsibly, taking the interests of our staff members and all other stakeholders into account.”