Gasunie Expects Tariff Ruling to Shrink 2017 Revenue by 25%
Netherlands state-owned infrastructure operator Gasunie has reported a fall in turnover and profits in 1H 2017, which it says will get steeper later this year following changes to regulated Dutch tariffs.
First half 2017 revenues were €740mn, down 9% year on year, while net profits after tax were €291mn, down 3%, reported Gasunie July 24. This was mainly because less capacity was sold in the Netherlands and Germany where Gasunie operates and because some long-term agreements expired.
Gasunie’s Dutch gas grid subsidiary GTS expects 2H 2017 revenues to be €250mn lower, or about 26% less on average, than in 1H 2017 because in February 2017 the Dutch markets regulator ACM set new tariffs that are lower than before.
Gasunie expects full year 2017 revenues of some €1.2bn, or €300mn lower – so 25% less – than in 2016, because of the new tariffs imposed on GTS. Energy that it transported in the Netherlands in 1H 2017 fell to 494 terawatt-hours of gas (45.9bn m3 high-calorific gas equivalent), down 1.4% year on year, it added.
A ministerial decision to reduce the Groningen production cap to 21.6bn m3/yr, announced May 24 to take effect from October 1, subject to a possible judicial review, could increase the call on GTS’s quality conversion capacity. Gasunie said demand for such calorific conversion rose 8% year on year in 1H 2017 to 15.3bn m3 of “pseudo G-gas” (with low calorific content, or L-Gas, similar to Groningen gas). In addition, Gasunie said it would be merging its GTS and regional transmission (RTL) systems with effect from January 2 2018 after having secured regulatory agreement from the ACM.
In Germany, Gasunie Deutschland (GUD) transported 6% less gas year on year at 99 TWh gas (9.2bn m3 high-cal equivalent) in 1H 2017, as flows entered from the North Sea and Netherlands were less than expected, although Russian entry flows via Nord Stream were at maximum capacity. Falling production of German and Dutch L-Gas has led GUD to invest in converting facilities to run on higher-calorific gas, with conversion at Bremen begun in 1H 2017 that will last until 2019. The company also said, with Oiltanking and Vopak, it is assessing the feasibility of installing Germany’s first LNG import terminal at Brunsbuttel, near Hamburg.
Dutch TTF hub traded volume down 5%
Gasunie also noted the planned integration of the TTF and BBL market areas on which it has held a consultation which elicited mixed views. Amendments must be submitted to UK regulator Ofgem for approval, and Gasunie says it expects to announce its decision next month and implement it on January 1 2018. Its effect will be to extend the Dutch TTF trading hub right up to the UK’s NBP hub, at Bacton on the English coast.
In terms of hubs total traded volume, Gasunie said that market parties on TTF traded 8,899 TWh (827.6bn m3 H-Cal equivalent) in January-May 2017, 4.7% less than the 9,338 TWh traded volume in Jan-May 2016.
However, it said that hub trades as a whole in northwest Europe including NBP and German-NCG have slightly declined, which meant TTF’s share in that region’s total traded volume increased to 48% (from 45% in 1H 2016).
GUD operates the other German hub Gaspool, where total traded volume in January-May 2017 was 682 TWh (63.4bn m³ H-Cal equivalent), a 4.3% increase year on year.
Mark Smedley