Norway to Proceed with Planned Tariff Cuts on Gas Pipeline

Norway intends to proceed with its plan to cut tariffs on gas pipeline, said the Oil and Energy Minister Ola Borten Moe.

The cut triggered the reaction of those who invested in the pipelines, who asked for reductions to be scaled back. The Minister claimed that a 'U-turn' would be difficult.

A scheduled 90 percent cut in gas transport tariffs, due to come into effect May 1st, was already delayed in April. 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.

According to Bloomberg, the Nordic country will announce a final decision by the end of this month.

Earlier this year, Norway’s Prime Minister Jens Stoltenberg said his government would raise taxes on hydrocarbons extractors.  This is seen as part of a new strategy for the September elections.

The tax hike will average approximately NOK3 billion (€398 million) per year until 2050, while the corporate tax cut will lower revenues by about 3 billion, said PM Jens Stoltenberg in May. The announcement drew criticism from companies including Statoil, ConocoPhillips and ExxonMobil.