Norway Postponses Gas Tariff Reduction

Norway, western Europe’s largest gas exporter, will delay proposed cuts to tariffs on natural gas transported through the Gassled pipeline network, responding to a huge reaction from interested parties, according to news reports.

A scheduled 90 percent cut in gas transport tariffs, due to come into effect from May 1, will be delayed as the Oil and Energy Ministry considers responses to news of the plan, it said today.

“We can confirm that we are aiming for changes in the tariff regulation to come into force July 1,” ministry spokesman Jon Evang was quoted by agencies. “The ministry has received extensive submissions and will need more time.”

Petroleum & Energy Minister Ola Borten Moe recently announced the proposed tariff cut that is intended to boost the economic viability of exploiting marginal finds in mature areas to lift recovery rates.

Norway, which is planning to cut tariffs in the network to make more gas discoveries profitable while boosting exploration and recovery rates, has received criticism from investors in the pipeline and their lenders. Investors argue the cut would reduce returns to 4 percent, well below their projected minimum of 7 percent.