September 28, 2022

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Gas from Norway will help Europe overcome the crisis

Gas from Norway will help Europe overcome the crisis

Let’s help Ukraine – you can help too

Norwegian gas exports pipeline to continental Europe and Great Britain It remained high in March thanks to higher prices, although maintenance work – planned and unscheduled – maintained Produce. According to data from S&P Global Commodity Insights, March shipments amounted to 9.94 billion cubic meters, or an average of 321 million cubic metres. daily. The overall volume is higher than it was in February, although it is down on a daily basis. Maintenance work restrained Norwegian exports, especially in the second half of March.

The supply in Norway is still going strong, among other things, thanks to the actions of local companies that have decided to redirect Gas Usually used in mining Crude oil For export to Europe. The initial exploitation of oil deposits is based on pumping raw materials, but this does not allow the deposits to be depleted to a satisfactory degree. In order to increase the degree of deposit depletion, secondary methods have been introduced, including alternative methods Water and gas injection. In the current price and geopolitical conditions, Norwegian producers use gas in moderation, preferring to sell it rather than inject it into it. well drilling.

For example, Aker BP announced on March 28 that it had decided to completely stop gas injection in two parts of the Skarv field, which allowed an increase in gas exports from Skarv by up to 20 percent. State-controlled Equinor also plans to stay higher gas extraction At the Heidrun, Oseberg and Troll fields all summer, after the Department of Energy approved increased production permits.

March shipments to Germany remained high, partially offsetting the lower volumes it received Berlin from Russia. Last month, German imports from Norway amounted to 3.42 billion cubic meters. Gas, which means a slight decrease relative to the long-term maximum in January (3.74 billion cubic meters). delivery to Great Britain Unchanged: 2.46 billion cubic meters. Norway exported 1.56 billion cubic meters to France, 1.32 billion cubic meters to Belgium, and just over 1 billion cubic meters to the Netherlands.

Production started norwegian shelf The long-term failure of the Hammerfest LNG export facility remains, as a fire broke out in September 2020. As a result, the Snohvit, Albatross and Askeladd fields were closed. The latest announcements from Equinor show that the plant may resume operations on May 17.

Norway announces that, if possible, it will increase production in the coming months, keeping it higher extraction Also in the summer to supply Europe with additional quantities of raw materials. Europe Warehouses will be crowded in preparation for the upcoming heating season, which can be very challenging. Because of the ambitious production plan, Norway intends to postpone some maintenance work on its mining infrastructure to a later time.

According to data from the SSB Group, cited by Jacob Godzimirski of the Norwegian Institute of International Affairs in the article “Norwegian Gas in Europe in the 1920s,” in 2019 Norway It produced 119 billion cubic meters. Gas, which made it ranked eighth in the world after it USA, Russia, Iran, China, Canada, Qatar and Australia. Importantly, the country produces more gas than Saudi Arabia and Algeria.

As much as 95 percent of Norwegian gas was exported. Most of it was transferred to consumers in the European Union. In 2019, Norway ranked third among the world’s gas exporters, after Russia, which sold 265 billion cubic meters abroad. Gas and Qatar, whose exports amounted to 124 billion cubic meters. It was followed by Australia (95 billion cubic metres), the United States (54 billion cubic metres), Turkmenistan (52 billion cubic metres) and Canada (51 billion cubic metres).

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Prior to Great Britain’s exit from the European Union, gas exports to the European Union accounted for 99 percent. Total foreign sales. After excluding Great Britain, about 76 percent of the country goes to the European Union. issued. In 2019, the largest quantities of Norwegian pipeline gas were purchased by Germany (about 28 billion cubic meters), Great Britain (about 27 billion cubic meters), the Netherlands (more than 25 billion cubic meters) and France (more than 19 billion cubic meters) . Relatively small quantities of gas, in the form of LNG, are also sold by sea.

Given the infrastructure in place, Norway is ready to move forward Gas sales to the European Union. In turn, Europe is dependent on purchases from the North, especially in the current situation, as more and more specific plans appear to abandon Russian hydrocarbons. And the more gas reserves there are in Great Britain, Holland and Denmark are depleting.

For example, Offshore Energies UK 2022 Business Outlook shows that in 2021 Great Britain It uses 76 billion cubic meters. gas, which amounts to 32 billion cubic meters. From Norway, only 29 billion cubic meters. – From local production. Thus, the volume imported from Norway was about 19 percent last year. higher than in 2019

Jacob M. confirms. – There is also an important issue regarding the transmission capacity of the Norwegian pipeline interconnection system Norwegian deposits With the European market – confirms. It adds that within a few months, LNG production is expected to resume at the Melkoya plant, which was damaged some time ago. – But we are talking about relatively small amounts of additional gas, which may reach European markets – he knows.

The current level of Norwegian gas extraction is about 120 billion cubic metres. Annually, it can be maintained for the next several years. Production can be increased if conditional and undetected levels increase gas resources. An emergency gas resource is a proven resource for which production decisions have not yet been made. Undiscovered, in turn, are those that have not yet been proven by excavation.

As noted by Jakob Godzimirski, the future of Norway’s resources also depends on the political debate around climate policy and the pursuit of carbon neutrality. Strong voices are heard both in Norway and abroad calling for a halt to extraction from some existing or newly discovered deposits, a halt to the development of new deposits, and the exploration of some areas considered to be very sensitive in terms of the environment – he writes in the study “Norwegian Gas in Europe in the 1920s” .

However, recent events seem to be related to Russia’s invasion of Ukraine It completely changed the situation on the market. This is also evident in the steps Norway has taken. Nearly twelve days ago, the local government announced that Norway would offer new licenses for oil and gas production, including in a previously unexplored area in the Arctic. Environmental activists strongly oppose oil and gas exploration in Norway, particularly in the fragile Arctic ecosystem, arguing that it contributes to global warming. However, a large majority in Parliament said the search would continue.

Ministry of Energy It announced that it will offer stakes in 31 exploration blocks in the Barents Sea in the Arctic, which oil companies may bid on in the final round, as well as other areas in the The Barents Sea, the North Sea and the Norwegian Sea. The blocks are adjacent to already defined areas with relatively known geology or infrastructure.

The issue of limiting oil and gas production as part of ambitious climate policy has been featured in the Norwegian political debate for a long time. The topic is being brought up by left-wing and environmental parties. In June 2021, six climate activists from Greenpeace and Natur og Ungdom decided to appeal a climate lawsuit to the European Court of Human Rights. They believe that the fact that the Norwegian state is opening its doors to new oil wells that will increase greenhouse gas emissions, violates basic human rights.

In the current circumstances environmental issues However, they may be temporarily pushed back into the background. Europe must take into account the scenario in which Russian hydrocarbons will cease to flow into the Old Continent. She is very dependent on them. Even if you do not decide to cut off imports from Russia, you should take into account that Moscow wants to take advantage of its advantage and will stop putting pressure on raw materials in the West. Before it can become forever independent of Russian energy sources and focus on developing renewables, it will have to secure supplies from alternative directions. Norway is one of them.

Monica Borkoska

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