GasTerra 2015 Sales, Prices Fall from 2014
Dutch gas trading company GasTerra sold less gas and for a lower price in 2015 than it achieved in 2014, itself a decline on 2013. It sold 70.3bn m³, down from 2014’s 81.3bn m³, achieving turnover of €14.7bn, down a quarter on 2014’s €19.5bn. CEO Gertjan Lankhorst said business would never be the same again.
Sales were down because of the cap on production at the Groningen field, whose output is sold exclusively to GasTerra and the smaller fields also produced less owing to reservoir decline, it reported February 27.
Of that total, 29.4bn m³ came from the Groningen field, 22bn m³ from the smaller fields,12bn m³ from hubs and 6.9bn m³ from Russia, Norway, Germany and the UK.
After setting the production limit for 2015 to 39.4bn m³ in January 2015, in June the government lowered it again to 30bn m³, in addition to a single net extraction from the gas storage in Norg of 3bn m³.
For the current gas year (October 2015-September 2016) output is capped at 27bn m³ with the proviso it may go to 33bn m³ if this year proves to be a relatively cold year.
Lankhorst said that there were two considerations regarding the tremors that led to the limit on output.
The people living in the area around the field have suffered damage to their property, he said, and as a result felt insecure and afraid. But at the same time, “the high economic and social value of this natural resource must also not be ignored.” The Netherlands still has a total of some 700bn m³ of conventional natural gas at its disposal.
He said the “millions of households in the Netherlands, Germany, France and Belgium, who are dependent on natural gas from Groningen, should be able to continue to rely on this gas to heat their homes.”
“It is therefore of great importance that the feelings of insecurity that people in Groningen have are removed and that the level of public support of gas extraction in Groningen is restored," he said.
An 8bn m3/yr contract between GasTerra and UK marketer Centrica is due to lapse later this year and, because of the Groningen cap, is unlikely to be renewed.
The cap is also bad news for the majors Shell and ExxonMobil, who own the operating company Nam.
The Groningen field is 60% owned by Nam and 40% by Dutch state oil and gas holding EBN. GasTerra is owned by Shell and Exxon (25% each), the Dutch state 10%, and EBN 40%. On March 1, Jan Willem van Hoogstraten started work as EBN chief executive; he previously headed Abu Dhabi state Taqa's business in the Netherlands.
TTF Liquidity Rises
Trade on the Dutch hub, the title transfer facility (TTF), rose to a record level, at 1,708bn m³, said GasTerra. In 2013, the average churn rate – the ratio between physical and traded volume – was 18.5; in 2014, this had gone up to 31 and in 2015 it was 37. As a result of its leading position, the TTF is the main price marker for long-term contracts and for gas traded at other marketplaces on the European continent, GasTerra said. This role used to belong to the UK National Balancing Point but, with declining UK production and rising liberalisation in continental Europe, it is relatively less liquid.
William Powell, Mark Smedley