Gasunie expands Dutch gas transport network

Groningen | press release

Dutch Gasunie, one of Europe’s largest gas infrastructure companies, has decided to significantly debottleneck and expand its gas transport network over the next few years. This will allow a broad range of customers to enter into new purchase- and sales contracts, to supply new power stations with gas, and to bring liquefied natural gas (LNG) to the Netherlands. It is an important step in the Dutch ambition to become the “preferred place of business” for the gas trade. The Netherlands will benefit by strengthening its long-term security of supply of gas, a relatively clean fuel, and by providing competitive access to more gas suppliers to the Dutch and European market.

The gas market in the Netherlands and Europe is becoming more dynamic. In recent years, many companies have requested a network expansion from Gasunie in order to enable better access to and competition in the gas market. Gasunie has processed all these requests into one single optimised investment programme that will cost between EUR 1.1 billion and 1.8 billion. It will result in at least four thousand man-years of work. The expansion will comprise the laying of about four hundred and fifty kilometres of pipeline in total and the construction of several compressor stations.

The investment is not only necessary to promote competition, it is also crucial for safeguarding the gas supply in this part of Europe. Following expansion, the Gasunie system will offer better possibilities to transport additional gas to the Netherlands and to either sell or re-export it. This is a necessity because Dutch production, including from the Groningen field, will gradually decrease. Another important factor is the imminent decision by Norwegian producers whether or not to expand the export of Norwegian gas and to ship it via a new pipeline to the Netherlands.

From an environmental point of view, gas is an attractive alternative to oil and coal. Even with the desired increased energy efficiency and with an optimum use of other sources of energy (for example wind and solar power or nuclear power), the role of gas will remain very important in both Dutch and European energy supply for many years to come. The new investment dovetails perfectly with this, and in addition it will ensure that the Netherlands, despite its declining own gas production, will continue to play an important role in the European energy supply.

The Minister for Economic Affairs is responsible for energy policy, and thus also for setting the general rules for passing on the transport costs to shippers and eventually also to Dutch gas users. This is achieved by tariffs set by the NMa, the regulatory authority. Gasunie has explored several alternatives and eventually chosen one in which the transport tariffs will rise the least. This means that from 2010, the total annual gas bill for end users will rise between 0.4 and 0.7 percent (if gas prices and taxes remain stable). On the other hand, there will be more competition and a further increase of supply security. In addition, the transmission tariffs in the Netherlands are and will remain among the lowest in Europe. The regulatory framework for the transport tariffs has been set out in the letter from the Minister of Economic Affairs to the Lower House of Parliament dated 29 March 2007.

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