Norway to Cut Gas Transport Costs
Norway's oil ministry says it will slash natural gas transport tariffs for new gas contracts, hoping to encourage higher production in mature fields, agencies reported.
Bloomberg claims the cuts could be as much as 90%.
The government also aims to cut charges for bookings from this spring, as transport operator Gassled has been earning more than the desired return on its investment. At the same time, future returns are likely to be high for years to come, the ministry said in a consultation paper.
"The resources that are easiest and least costly to develop and have the shortest distance to the markets have to a large extent been developed," the ministry said. "The remaining resources are expected to be more marginal."
"The proposal to lower transport costs for new gas volumes will lay the ground for more exploration, the development of more discoveries and further measures [to increase production] in existing fields," said Minister of Petroleum and Energy, Ola Borten Moe.
The government, in a consultation paper, said it is prepared to reduce charges made by Gassled, the owner of the country's gas transport infrastructure.
Gassled is a joint venture created in 2003 between oil and gas companies operating on the Norwegian continental shelf. Its biggest shareholders are state-owned Petoro AS and Solveig Gas Norway AS.
In 2011 it had gross tariffs of 25 billion kroner (€3.4 billion), according Gassco AS, the operator of the network that ships gas to Britain, France, Belgium and Germany.
Norway is the world's second biggest piped gas exporter, selling over 100 billion cubic metres a year but output is seen falling this year as fields mature and new areas will take time to come onstream.
The tariffs in question were set up to provide investors a 7% return on asset. But the actual return was 10% in 2012 and was projected to rise to 10.5% in 2028, the ministry said.
The lower tariffs would then encourage energy firms to explore for more gas in the Arctic Barents Sea, where only a few discoveries have been made so far.
Since the area lacks pipeline infrastructure, the new discoveries could then provide the volumes necessary to make a new gas pipeline financially viable and in turn encourage investment in new infrastructure, the ministry argued.