Reports related to this article:
Plant(s): View 1 related plant in PECWeb
Released October 04, 2021 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's Equinor (NYSE:EQNR) (Stavanger) has been granted permission by its government to boost supplies to the European Union (EU), which is facing what could be its worst gas crisis in decades.
The company confirmed that the permission allows it to increase gas exports from two fields on the Norwegian Continental Shelf (NCS) to supply the "tight European market". Production permits for the Oseberg and Troll fields have each been increased by 1 billion cubic meters (Bcm) for the 2021 gas year, which starts on 1 October. This represents an increase from 5 Bcm to 6 Bcm for Oseberg and from 36 Bcm to 37 Bcm for Troll. While helpful, they will not solve the problem. Europe relies on Russian and Norwegian gas imports for 60% of its needs.
Europe has seen gas prices more than triple in the past year due to a number of factors including weak gas stocks after last winter's cold snap, poor wind power generation levels in recent months and disruption to the supply of liquefied natural gas (LNG) due to the COVID-19 pandemic. Europe cannot rely on LNG making up any shortfall as Asia is outbidding the region for the limited amount of LNG that is not already tied up in fixed contracts. Data from the leading benchmark, Dutch Title Transfer Facility, shows that prices for natural gas have rocketed from 16 euro (US$18.73) per megawatt hour in January to 75 euro (US$88) by mid-September--an increase in excess of 360%. For additional information, see September 23, 2021, article--Soaring Gas Prices Hit European Chemicals and Steel Sectors.
"The production permits allow us to produce more gas from these two important fields this fall and through the winter," said Helge Haugane, senior vice president Gas & Power. "We believe that this is very timely as Europe is facing an unusually tight market for natural gas. At Equinor we are working on measures to increase exports from our fields on the NCS."
Last month, Industrial Info reported on the start of production from Equinor's Troll Phase 3 project in the North Sea. Start-up of the US$925 million project was delayed by months due to COVID-19, but the new wells have now been tied into the Troll A platform, and this phase is expected to extend the platform's life past 2050. Troll is Norway's largest gas producer, with large reserves still left in the ground. Equinor estimates that after more than 20 years of production, 65% of the gas has still not been recovered. Recoverable volumes from Troll Phase 3, which will produce the Troll West gas cap, are estimated at as much as 347 Bcm--which in oil equivalent amounts to 2.2 billion barrels. The annual export volume from Troll is equivalent to approximately 8% of the EU's gas consumption. For additional information, see September 8, 2021, article--Equinor Starts Production at Troll Gas Project.
Haugane added: "Now we are ramping up production at Troll following the completion of the Phase 3 project, and we expect to reach plateau production from 1 October. We take pride in being a long-term, reliable supplier of energy and we are happy that we have been able to identify ways to export as much as practically possible into this tight market."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The company confirmed that the permission allows it to increase gas exports from two fields on the Norwegian Continental Shelf (NCS) to supply the "tight European market". Production permits for the Oseberg and Troll fields have each been increased by 1 billion cubic meters (Bcm) for the 2021 gas year, which starts on 1 October. This represents an increase from 5 Bcm to 6 Bcm for Oseberg and from 36 Bcm to 37 Bcm for Troll. While helpful, they will not solve the problem. Europe relies on Russian and Norwegian gas imports for 60% of its needs.
Europe has seen gas prices more than triple in the past year due to a number of factors including weak gas stocks after last winter's cold snap, poor wind power generation levels in recent months and disruption to the supply of liquefied natural gas (LNG) due to the COVID-19 pandemic. Europe cannot rely on LNG making up any shortfall as Asia is outbidding the region for the limited amount of LNG that is not already tied up in fixed contracts. Data from the leading benchmark, Dutch Title Transfer Facility, shows that prices for natural gas have rocketed from 16 euro (US$18.73) per megawatt hour in January to 75 euro (US$88) by mid-September--an increase in excess of 360%. For additional information, see September 23, 2021, article--Soaring Gas Prices Hit European Chemicals and Steel Sectors.
"The production permits allow us to produce more gas from these two important fields this fall and through the winter," said Helge Haugane, senior vice president Gas & Power. "We believe that this is very timely as Europe is facing an unusually tight market for natural gas. At Equinor we are working on measures to increase exports from our fields on the NCS."
Last month, Industrial Info reported on the start of production from Equinor's Troll Phase 3 project in the North Sea. Start-up of the US$925 million project was delayed by months due to COVID-19, but the new wells have now been tied into the Troll A platform, and this phase is expected to extend the platform's life past 2050. Troll is Norway's largest gas producer, with large reserves still left in the ground. Equinor estimates that after more than 20 years of production, 65% of the gas has still not been recovered. Recoverable volumes from Troll Phase 3, which will produce the Troll West gas cap, are estimated at as much as 347 Bcm--which in oil equivalent amounts to 2.2 billion barrels. The annual export volume from Troll is equivalent to approximately 8% of the EU's gas consumption. For additional information, see September 8, 2021, article--Equinor Starts Production at Troll Gas Project.
Haugane added: "Now we are ramping up production at Troll following the completion of the Phase 3 project, and we expect to reach plateau production from 1 October. We take pride in being a long-term, reliable supplier of energy and we are happy that we have been able to identify ways to export as much as practically possible into this tight market."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
