Dutch GasTerra Turnover Up, Imports Exceed Output

Dutch gas marketer GasTerra had revenues of €11.2bn in 2018, up from the €9.6bn in 2017, it reported February 15. That was despite the Netherlands becoming a net importer for the first time; and despite a dip in sales of 1.1bn m³, to 55.5bn m³. The gas sales price rose by more than GasTerra's weighted average cost of gas.

The supply of Groningen gas fell again in the past gas year that ended September 30 2018 and the joint operating company NAM, owned equally by Anglo-Dutch Shell and US ExxonMobil, produced 20.1bn m³, down 1.5bn m³ from the ceiling set tby the minister for economic affairs and climate policy. GasTerra has the sole right to buy that gas, giving it an advantage as the field is a swing producer.

Following the government's plan to close the field, GasTerra faces an uncertain future and also has to work around reducing its offtake from Groningen. CEO Annie Krist said that GasTerra remains a vital link in gas supply, even though "voices in the climate debate... give the impression that we will soon be able to do without this energy carrier. As in the years to come alternative sources will not be able to wholly meet demand, which is only falling slightly, management of the Groningen field, for which we share responsibility, is therefore vital to the security of supply of low-calorific natural gas in north-west Europe."

Although the conditions for investment in small offshore gas fields have improved, the need for imports is bound to rise in the coming years. Krist said: "At present, the Netherlands still depends on gas for about 40% of its energy needs. The use of gas-fired power stations may even increase in the next decade in order to secure electricity supplies, now that the proportion of sustainable energy in the energy mix is rising and coal-fired power stations are being phased out. Other indicators also point to demand for gas remaining high. All in all, in the years to come the Netherlands will still have to produce and import several billion cubic metres of natural gas in order to secure the energy supply."

Krist said the rise of the Dutch hub, the Title Transfer Facility -- now Europe's largest -- means that the Netherlands is well prepared for this new reality. But "Whether this also applies to the market in general is another matter. The current market structure still relies on surplus domestic production.’

GasTerra is also preparing for the energy transition, promoting the use of renewable gases and carrying out research. It is also the largest purchaser of green gas in the Netherlands and helps producers market this sustainable alternative to natural gas. The share of green gas in GasTerra's portfolio is growing steadily, and this trend is expected to continue, it said.

Gasunie is owned half by the Dutch state and a quarter each by ExxonMobil and Shell. They sold their stakes in the gas transport business, still called Gasunie, to the Dutch government some years ago, as the Netherlands unbundled energy transport from supply.