Oil and gas Europe
The future of The giant Groningen gas field has been fuelling Europe’s energy needs for decades. As the Dutch wind down production, Christian Beasley at ZTP says Groningen’s volumes can be easily replaced
T
he significant 1959 discovery of the Groningen gas field – the tenthlargest in the world – had global ramifications: firing the starting gun for North Sea exploration, the UK’s Continental Shelf Act 1964, the formation of the Brent benchmark, and the economic phenomenon the ‘Dutch Disease’. Production started in 1963 and increased to a peak of 87.7BCM in 1976. It supplied Benelux, France, Germany and the UK. Unlike other natural gas high calorific grades, it had a relatively high nitrogen content, resulting in lower calorific value. In March 2018, after several small but damaging earthquakes, Dutch Prime Minister Mark Rutte announced that production would be phased out by 2030, later revised to 2022. What is the outlook for European gas post-Groningen?
Stepping out from big brother’s shadow Natural gas is the low-carbon fuel of choice for reaching net zero. It is poised to plug power generation gap left by coal, as the non-weatherdependent choice. The necessity to transition away from coal-fired generation to meet climate goals is felt acutely in Germany. The total gas demand in the EU was around 459BCM in 2019. The source of EU gas is shifting: EU production was down 12% YoY, with Groningen production decreasing to 23% YoY, whereas LNG imports increased by 42% YoY. There is a strong correlation between GDP and gas demand. The IMF forecasts EU GDP to fall 7.1% in 2020, impacting demand for gas, while LNG demand is down 2.3% in the Northern hemisphere.
14 energyfocus | www.the-eic.com
14-15 OG European_EF Summer 2020_Energy Focus 14
20/07/2020 10:00
