Norway Upholds Decision to Reduce Tariffs in Gas Transportation System

Norway’s Government upheld the decision to reduce tariffs in the gas transportation system Gassled, maintaining the measure introduced by the previous government that will impact gas transported after 1 October 2016. 

“Sound resource management means that the profit from oil and gas resources must be extracted on the fields, not in the infrastructure. Tariffs in the infrastructure are reduced when the predicted return has been achieved. This predictability for investors is important for the authorities,” Tord Lien, Minister of Petroleum and Energy, said in a note released on Friday.

Norway announced tariff cuts to make additional finds profitable and to boost exploration and recovery rates. 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 thus far.

At the same time, companies have spent $5.1 billion in recent years to acquire stakes in Norwegian pipelines and investors claim that the decision to cut tariffs is illegal. Njord Gas Infrastructure, Solveig Gas and Silex Gas announced in July that they intend to proceed with legal actions against Norway to claim compensation for losses due to the cuts in gas transportation tariffs. 

“Lower tariffs will promote exploration, development and production of oil and gas, strengthen the competitiveness of Norwegian gas and provide for sound transportation solutions,” explained Lien.