August 13, 2022

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Index – Economy – Norway is sending as much natural gas as possible to Europe

In May, Norway raised its forecast for gas production this year by 6 percent to 122 billion cubic meters, saying higher prices would be more effective in squeezing every molecule of gas it can bring to the surface from the continental shelf. On Monday, the Energy Ministry in Oslo announced that it had decided to increase production licenses in the Troll, Gina Krok, Tuva, Ösberg, Asgard and Mikkel areas based on applications submitted by field licensees. S&P Global Platts Raw Materials Industry Analysis Institute.

“The most important thing Norway can do in today’s critical energy situation for Europe and the world is to make it easier for companies operating on the continental shelf to maintain increased production,” said Energy Minister Terje Ösland. And how to increase oil and gas production.

“The decisions taken now are due to such upgrades and will contribute to the record gas sales we expect this year through our gas pipeline system,” he added.

The ministry also issued production permits for the Nova field, operated by Wintershall Tea, which is expected to start by the end of July.

In total, they had already planned for 2022, production estimates were made earlier this year, but these salable volumes were considered in brackets in the forecasts. In principle, this is possible, but in the absence of permission, it is not certain that they will be able to pump it into gas pipelines.

“So the results do not increase expected gas sales this year, but they support that higher export volumes in 2022 could come through the pipeline system,” the Norwegian ministry said, adding that the 2017 pollution record could now be surpassed. 122.4 billion cubic meters of natural gas was supplied to the system.

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Gas prices may drop

Monthly forward TTF prices hit a record high of €212.15/MWh in early March and most recently reached €145.83/MW on July 1, according to flats estimates conducted by S&P Global Commodity Insights. MWh , which is still 320 percent higher than the previous year. However, from Tuesday, it may lower prices again, and more industry experts believe that traffic through the Nord Stream 1 pipeline will not resume until mid-July, even if Gazprom promises this. Starting in mid-June, normal traffic volume fell by 60 percent, pushing up the previous month’s gas prices.

Norwegian pipeline gas can meet 20-25 percent of EU and UK gas needs, while the Hammerfest LNG liquefaction plant operated by Equinor contributes to the supply of global LNG markets.

The facility resumed operations in June after a fire at the plant in September 2020. The plant, with a capacity of 4.3 million cubic meters per annum, can supply a gas equivalent of 18 million cubic meters/day, i.e. 6.6 billion cubic meters per annum.

Before the fire, LNG from the Hammerfest plant was traditionally supplied to European importers. In 2020, most of the exported goods came to France, the United Kingdom, Poland, Lithuania, Spain and the Netherlands.

On the other hand, LNG prices are certain to start rising in the coming weeks after a Gazprom executive suggested a liquefied energy carrier. Accept payment in rubles only Company. After Monday’s announcement, President Vladimir Putin or the State Duma are expected to adopt a decree on the new tariff rules.

(Cover Image: (Krister Soerboe/Bloomberg/Getty Images)