EU’s largest gas producer becomes its latest importer
By ROB VERDONCK
Bloomberg
The European Union’s biggest natural gas producer has joined most of the rest of the 28-nation bloc and become reliant on others.
The Netherlands brought in more fuel than it exported in the third quarter, with imports rising to a record in September, Statistics Netherlands said this week.
The nation of almost 17 million has capped gas extraction from Europe’s biggest field, Groningen in the north, by more than a third because of tremors linked to production. It now has to turn to other producers such as Norway and Russia to meet some of its demand as it honors contracts to supply customers in Germany, Belgium and France with gas from Groningen.
“They are going to be buying much more from others than they have been accustomed,” said Trevor Sikorski, an analyst at Energy Aspects in London. “There should be little concern about security of supply” thanks to good connections to the rest of Europe and an underused liquefied natural gas import terminal, he said.
The EU, which gets more than half of its gas from Russia’s Gazprom PJSC and Norway, has been seeking to diversify supplies, including by building liquefied natural gas terminals to allow it to access fuel from countries such as the US. EU gas production dropped 42% in the decade to 2014 as the Netherlands curbed output and North Sea fields became depleted, according to BP’s Statistical Review. That comes as demand is set to rise 7% in 2015, the first increase in five years, according to Brussels-based lobby group Eurogas.
The Netherlands pumped 42.4 billion cubic meters (1.5 trillion cubic feet) from Groningen in 2014 with production capped at 30 billion cubic meters this year, according to the Royal Dutch Shell-ExxonMobil venture that operates the field. That compares with domestic consumption of about 32.1 billion cubic meters in 2014, according to BP.
The Netherlands has spent almost all the 265 billion euros ($280 billion) it earned from gas between 1960 and 2013.
Norway has used its oil and gas revenue to create a sovereign wealth fund that at about $860 billion is the world’s largest. It did this partly to avoid the so-called Dutch disease that caused a recession in the Netherlands in the 1970s as income from natural resources strengthened the currency and made other exports less competitive.
If the Netherlands had followed the Norwegian strategy since 1960, it would have had a fund of about 350 billion euros in 2014, the Dutch Court of Auditors said in a report last year.
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