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    Dutch Govt Consults on post-Groningen World

Summary

The government is considering keeping flows available until 2028.

by: William Powell

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Natural Gas & LNG News, Europe, Top Stories, Premium, Security of Supply, Corporate, Exploration & Production, Political, News By Country, Netherlands

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Dutch Govt Consults on post-Groningen World

The new Dutch minister for economic affairs has launched a consultation on a new law to regulate the gas sector once Groningen gas production has ceased. At present, Groningen gas production, sales and transport are all defined in a law, but production is due to stop in 2022.

Major users and utilities' body VEMW is considering submitting an opinion after discussing the bill with its supporters, it said March 9.

Closing the field down will have direct consequences for the residents and regional authorities of Groningen; for licensee NAM; for the sole buyer GasTerra; and for the transmission system operator Gas Transport Services (GTS), a subsidiary of state Gasunie. It might also have consequences for end users of low-calorific gas, which is made by blending high-calorific gas with nitrogen, VEMW said.

VEMW says the the residents of Groningen and the market parties need "clarity and certainty with regard to the definitive closure of the Groningen field." 

Before gas extraction from the Groningen field is completely terminated, it will be used after October 2022 as a reserve resource to ensure security of supply on the cold winter day. This means that it is no longer controlled on a temperature-dependent annual volume, but on a minimum flow ('pilot flame'), whereby the gas extraction can then be adjusted in specific exceptional cases to keep the gas supply up and running. 

The bill will adjust the regulations to this – temporarily – changed approach, and legally establish the definitive end of gas extraction from the Groningen field – expected between 2025 and 2028. With that definitive end, GasTerra's core activity will also lapse. Statutory provisions pertaining to GasTerra's tasks are thus superfluous and deleted from the law.

In the context of the annual procedure for determining the operational strategy, the deployment of the Groningen field still required is assessed and monitored throughout the year on the basis of input from GTS, NAM, mining regulator SSM, regional authorities and the economic affairs minister.

"As soon as the minister has clarity about the moment at which the last production locations are no longer required as a reserve resource for safeguarding the security of supply, he will determine the date of definitive closure for the entry into force of a number of provisions in this bill," VEMW said.

NAM ramped up output from the Groningen field this year in order to meet demand at home and abroad during the cold spells but the ministry told NGW that this did not affect plans to close it. 

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