EurOil: Groningen to close as planned

The Netherlands will end gas production at the giant quake-causing Groningen gas field next year as planned, despite calls for it to boost flow amid the unprecedented supply crunch on the European gas market.

Output at Groningen is due to be slashed by more than 50% in the gas year beginning October 1, 2021, to just 3.9bn cubic metres, before ceasing regular production altogether.

Groningen’s output hit a peak of 88 bcm in 1976, but production activities led to earthquakes, causing damage to property in the area. Eventually the Dutch government took action and in 2014, it ordered the NAM joint venture between Royal Dutch Shell and ExxonMobil that operates the field to start reining in supplies. Originally the field’s full closure was anticipated in 2030, but this was brought forward in 2019 to 2022.

The gas price spike in recent months has led gas suppliers across Europe to declare bankruptcy, while some energy-intensive industries have had to close down because operating costs are too high. Several companies in the Netherlands, including large aluminium, zinc and ammonia producers, have already said they will reduce output at their facilities because of the high prices.

However, the government’s resolve to close Groningen according to plan remains immovable.

In other news, Norwegian gas production lagged behind the forecast figure in August for the third month running, the Norwegian Petroleum Directorate (NPD) said on September 23, at a time when Europe is in the grip of a gas supply crisis.

Gas supply averaged 301.3mn cubic metres per day during the month, which was 3.6% below the level forecast, and down 2.6% from the level in July. It still marked a 5.1% increase year on year, however.

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