Dutch government cuts Groningen gas production

The Government of the Netherlands has ordered a further tightening of gas production at Europe’s largest gas field. It said no more than 30 billion cubic meters of natural gas […]

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By Priyanka Shrestha

The Government of the Netherlands has ordered a further tightening of gas production at Europe’s largest gas field.

It said no more than 30 billion cubic meters of natural gas will be extracted from the Groningen field – operated by NAM – this year.

Production will be limited to 13.5 billion cubic meters in the second half of 2015.

The decision was based on the advice of the State Supervision of Mines (SodM) and follows a number of earthquakes in the country.

Minister Henk Kamp of Economic Affairs said: “The safety of the people of Groningen must come first. We are reducing gas extraction in Groningen as far as feasibly possible at the present time.”

The government had previously reduced extraction in the Loppersum area by 80% and suggested imposing a maximum of 42.5 billion cubic metres for 2014.

In 2015, gas extraction was further cut to a maximum of 39.4 billion cubic meters, with a 16.5 billion cubic metre limit for the first six months.

The production cap has pushed forward gas contracts higher, according to an energy analyst.

Matt Osborne from Inenco told ELN: “July15 NBP contract hit a one-month high this morning in reaction to the need to find alternative sources to plug any gaps in UK imports.

“The announcement serves as a reminder of the potential fragility and vulnerability of our gas supply to external events and the growing need to find alternative domestic sources such as shale gas extraction currently under consideration.”

He added there is “immediate pressure” on gas supplies to the UK and the rest of Europe but adds to growing concerns that supplies could be tighter this winter compared to recent years.