Gasunie and the natural gas supply chain

• In the Dutch natural gas supply chain, various parties are responsible for the exploitation of the gas reserves and for the extraction, trading and transmission of natural gas.
• Gasunie manages and maintains the infrastructure for large-scale transmission of gas in the Netherlands. This is its duty prescribed by law, a duty Gasunie must perform safely and efficiently. 
• Gasunie as it stands today was created after N.V. Nederlandse Gasunie was split in 2005 into two new companies: GasTerra (for the sale and supply of gas) and Gasunie (for its transmission).
• Gasunie is comparable to TenneT, the company that manages the high-voltage power grid in the Netherlands and in part of Germany. And just like TenneT, Gasunie is a 100% state-owned company, meaning the Dutch State is the sole shareholder in the company.
• Though the statutory duty of transporting natural gas will remain important in the coming years, the role of natural gas will diminish over the coming decades as our energy supply becomes increasingly sustainable.
• It’s with this in mind that Gasunie is also working hard on realising the infrastructure for the sustainable energy of the future, infrastructure for hydrogen, green gas, heat and CCS, for example.

Because natural gas deep under the ground tends to rise, the gas penetrated from the coal seam to the sandstone layer above. However, because of the impermeable layer capping that sandstone layer, the natural gas could not escape. This is how gas-rich deposits (‘gas fields’) formed. In the Netherlands, the sandstone layer containing the natural gas is located about 3 kilometres below the surface.

To get the natural gas out of the ground, it has to be extracted. Once extracted it is traded and then transported (over long-distance pipelines this is called ‘transmission’).

But who exactly is responsible for all these steps and decisions in the natural gas supply chain?

The Ministry of Economic Affairs and Climate Policy is responsible for decision-making on gas extraction in the province of Groningen. In the current cabinet this is the State Secretary for the Extractive Industries.

In addition to the amount of gas, the ‘extraction decision’ also states how the gas is to be extracted. In the past, such a decision was valid for periods of ten years; since recently, however, how much gas may be extracted is determined on a year-by-year basis.

Maatschap Groningen (Groningen Partnership) is then responsible for extracting the natural gas from the Groningen field. Founded in 1963, Maatschap Groningen is owned by NAM (60%) and Energie Beheer Nederland (EBN; 40%).

NAM is a collaboration of Shell (50%) and ExxonMobil (50%). The Dutch State is the sole shareholder in EBN. The shares are managed by the Ministry of Economic Affairs and Climate Policy.

NAM holds the concession to operate the Groningen field and handles the extraction of the natural gas.

Once the natural gas has been extracted, it is sold to GasTerra. GasTerra trades in gas and purchases gas from domestic and foreign producers. It then supplies natural gas to customers, such as energy companies and industrial consumers, in the Netherlands and abroad.

GasTerra’s shareholders are Shell (25%), ExxonMobil (25%), EBN (40%) and the Dutch Ministry of Economic Affairs and Climate Policy (10%). Given that EBN is fully owned by the Dutch State, you could say that 50% of GasTerra is state-owned.

The parties responsible for the exploitation of the gas reserves and for the extraction and trading of natural gas are collectively referred to as the Gasgebouw (literally translated as the ‘gas building’).

Gasunie is not part of Gasgebouw. As a public company, Gasunie has the statutory duty to manage and maintain the Dutch gas grid. The Netherlands Authority for Consumers and Markets supervises this and checks whether Gasunie is carrying out this task properly. This way, companies that trade in gas, like GasTerra, can actually get the gas they sell to their customers – over the Dutch gas transmission network.

Gasunie as it is today emerged from N.V. Nederlandse Gasunie, a company founded in 1963 that, until 2005, was responsible for the sale, supply and transmission of natural gas.

With the objective of liberalising the gas market, at the turn of the century the European Commission called on the Member States to unbundle the sales and transport activities of their gas companies. The EC believed that splitting trade and transmission would improve the performance of the European gas market, creating more scope for competition and fair prices. The networks and infrastructure had to remain in public hands and be kept separate from the commercial trading activities. 

The Netherlands answered this call for liberalisation and in 2005 split N.V. Nederlandse Gasunie into GasTerra for the sale and supply of natural gas and the current Gasunie for infrastructure and transmission.

In traffic, good infrastructure is essential to keep the Netherlands accessible and moving. After all, without good motorways, railways and ports, goods cannot be shipped and people cannot get to work. The same goes for the energy system. Without good infrastructure, pipelines and cables, power and gas cannot reach homes and businesses.

With regard to energy, our electricity and natural gas not only come from the Netherlands, but also from abroad. To keep our energy system stable and reliable, connections to other countries are essential. Gasunie’s network of pipes and pipelines is very important for this.

The Netherlands serves as a gas hub. This is thanks to the excellent connections with our neighbouring countries, the connection to the world market for liquefied natural gas (LNG), and ample facilities for gas storage. The strategy for setting up gas infrastructure for the transmission, storage and transport of gas abroad was called the ‘gas roundabout’. Gasunie plays an important role in this interchange.

Now that gas extraction in Groningen is coming to an end, this interchange will ensure that sufficient gas remains available for Dutch businesses and homes.

Natural gas is a natural product that originated millions of years ago. The precise composition and properties of natural gas from different fields (gas-rich deposits) deep under the ground can differ considerably. Gasunie ensures that the natural gas that reaches the end users is always the same quality.

The gas from the Groningen field has a special composition and is called ‘low-calorific gas’. This means that it contains a relatively large amount of nitrogen. Natural gas with this composition is the standard for gas cookers and central heating boilers in the Netherlands, Belgium, Germany and northern France.

The natural gas from smaller fields in the Netherlands and the gas from Norway, for example, is ‘high-calorific gas’, meaning it contains relatively low levels of nitrogen. High-calorific gas cannot be used for cookers and boilers that are designed to burn low-calorific gas. So high-calorific gas must be processed to make it suitable for use in the Netherlands, Belgium, Germany and northern France.

Our energy supply is rapidly becoming more sustainable. That is important for the future of our planet. This means that the role of natural gas will decrease over the coming decades. In the transition to a fossil-free energy supply, hydrogen and green gas will play an increasingly important role. The pipeline network that Gasunie manages can also be used for these new forms of energy.

The repurposing of natural gas pipelines for the transmission of hydrogen is a clear example of this. This way, Gasunie is using the knowledge and expertise of today’s energy system for the clean and sustainable energy system of tomorrow.