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    Netherlands confirms 2021-22 as Groningen's last year

Summary

This is despite the high prices and the potential threat to national energy security.

by: William Powell

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Netherlands confirms 2021-22 as Groningen's last year

The Dutch government has confirmed in a September 24 statement that the coming gas year – starting October 1 – will be the last for Groningen, the former swing producer for Europe. A limited number of extraction locations will be held on standby thereafter as it is necessary to extract about 1.5bn m³ so that production can resume in the exceptional case that this is necessary, Stef Blok, the minister for the economy and climate, said. But that will be kept as short as possible.

Blok has said operator NAM may extract 3.9bn m³ if next year is average in terms of temperature. This is in line with the advice of gas network operator Gasunie Transport Services (GTS) from February.

This is well below the level of 11.2bn m³ foreseen in the 2018 baseline and about half this gas year's output. After the 2021/2022 gas year, the field will only be used as a reserve resource. That is a situation that, as far as the cabinet is concerned, will last as short as possible, the central government statement said.

It is also well below the maximum level set by the state mining authority, which is 12bn m³/yr. It set the limit after years spent reviewing the link between the rapid ramp-up of gas production in winter and the damage to the fabric of buildings in the Groningen area. NAM is to pay the remediation costs, but suspects that many of the claims for damages cannot be proven.

The Dutch government will leave tens of billions of euros of potential gas production in the ground, unswayed by the risks that this poses to national security of supply. The closure had been expected in the coming years, but the decision was brought forward on the recommendation of the national gas transmission system operator Gastransport Services. The confirmation ends any lingering uncertainty, given the soaring prices in the gas market and fears of more industrial demand destruction in Europe.

The field has been in operation since 1963 and its high pressure allowed the operators – Anglo-Dutch Shell and US ExxonMobil – and the government to make a fortune from the flexibility of deliveries. It exported to Germany, France and Belgium.