Danish Gas Returns to Market After Five-Year Hiatus

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Closed since 2019, the Tyra natural gas field in the Danish waters of the North Sea has restarted with a lower carbon footprint, operator TotalEnergies SE (NYSE:TTE) (Paris, France) said.

Operators halted production at the Tyra field after 30 years of service resulted in infrastructure sinking several feet into the seabed. The same year, Denmark merged its gas market with Sweden's in an effort to improve trade and efficiencies, relying on Germany and Poland gas networks while Tyra was overhauled.

TotalEnergies said production restarted at the field, with a peak production capacity of 200 million cubic feet of natural gas and 22,000 barrels of condensate each day. The French major said this makes Denmark both self-sufficient and a net exporter of natural gas.

"The new Tyra leverages state-of-the-art digital solutions and technological innovations to produce more efficiently and with 30% lower greenhouse gas emissions than the former facilities," said Nicolas Terraz, the president of upstream operations at TotalEnergies.

Denmark during the down period had relied in part on gas imports through the Baltic Pipe network. With Tyra back in service, TotalEnergies said gas would be sent through two separate export pipelines.

The company said the overhaul includes eight new topsides, two jackets and six bridges. As part of the redevelopment, TotalEnergies said that 98.5% of the materials recovered from the retired installations were either reused or recycled. The total structure weighs more than 35,000 tons and reaches more than 150 feet high.

But apart from the engineering feat, TotalEnergies said the resumption of operations at Tyra is a boost for the regional market.

"Importantly, the resumption of gas production from Tyra improves Europe's security of supply," Terraz said.

Natural gas was caught in the web of geopolitical issues even before the outbreak of war in Ukraine as Western powers expressed concern over the tight grip that Russian gas company Gazprom had on the European market.

Before the start of the war in 2022, Europe depended on Russia for about a quarter of its gas. Some countries such as Poland, a former Soviet republic, were almost entirely dependent.

The start of the war upended European gas supplies due in part to Western-backed sanctions imposed on Moscow. Later in the conflict, the Nord Stream pipeline, a key Russian artery extending through the Baltic Sea to Germany, was closed, further endangering European energy security.

Gas storage mandates and the installation of floating terminals to regasify supplies of liquified natural gas from the likes of the United States and Qatar have alleviated much of the supply-side concerns, leading to recent lows for the price of natural gas.

But while gas storage is filled and European supplies are more secure, shifting dependencies from one supplier to the next carries its own risks. While Europe is less dependent than before, Ukrainian drone strikes on Russian energy infrastructure has led to a renewed spike in the Dutch Title Transfer facility, the European benchmark for the price of natural gas.

Mirroring developments behind the price of oil, European gas prices are up nearly 16% so far in March alone. An issue with the Freeport LNG export facility in the United States, meanwhile, only adds to lingering market tightness, though renewed supplies from Denmark and the Tyra field should offset some of that.

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