Final advice on the measures to reduce the Groningen production
On September 10th the Minister of Economic Affairs and Climate Policy has published his final decision (the so-called vaststellingsbesluit) for gas year 2019/2020. In this vaststellingsbesluit has been determined that the allowed Groningen production will be reduced to a maximum of 11.8 bcm in an average winter.
This production level is below the by the State Supervision on the mines advised safe production level. In addition, the Minister has announced that after mid 2022 the Groningen field is only necessary in case of a cold winter. This is an important decision for the safety for the inhabitants of Groningen. On the other side, this means that the North West European gas market needs additional volumes of imported gas. The current storages are crucial in order to maintain security of supply.
Nitrogen plays a crucial role in the reduction of the Groningen field production. By adding nitrogen to high calorific gas we can produce low calorific gas (pseudo Groningen gas). Producing more pseudo Groningen gas will lead to a lower required Groningen production. GTS was one of the advisors which has led to the decision of the Minister. We sent our advice on July 25th to the Minister. In our advice we stated that it was possible to reach a production level lower than 12 bcm in an average gas year. To reach this, it is necessary to take the following measures:
- Increase the planned nitrogen utilization from 92,5% to 100%
- Export pseudo Groningen gas via Oude Statenzijl instead of Groningen gas
- Fill UGS Norg with pseudo Groningen gas instead of Groningen gas
The Minister has endorsed our advice and has decided to implement the aforementioned measures. This means that from mid-2022, all current industrial G-gas customers can be supplied with pseudo G-gas. From that moment on, conversion from G gas to H gas is, in our eyes, no longer an effective measure to reduce the Groningen volume. We have asked the Minister to include a consideration of the costs and benefits of the conversion measure in the completion of the current legislative process. The final choice is up to the minister.
We also gave from the perspective of security of supply an outlook for the required Groningen production in the next gas years. Finally we asked the Minister to take measures to ensure the future security of supply and to maintain the well functioning gas market in the Netherlands.
To be able to give our final advice we have organized a market consultation for the representative organizations to give their vision on our planning assumptions and proposed measures. This consultation was held from June 27th until July 10th. On July 4th we organized a workshop in which we gave more insight in our planning assumptions and proposed measures. We would like to thank the parties for giving their vision which we have taken into account in our final advice.
Beneath the reactions and our comments (in Dutch) via an matrix of the different market parties is given. In our matrix we describe how we have taken the comments into account in our final advice.
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