1 Feb 2018

GTS’ analysis of security of supply

This morning, national gas network operator GTS presented an analysis to Eric Wiebes, Dutch Minister for Economic Affairs and Climate, in which GTS examines the consequences for security of supply if gas extraction in Groningen is reduced and a maximum of six production clusters are shut down. This is a direct response to measures proposed by Dutch gas company NAM as a result of the earthquake in Zeerijp on 8 January this year.

Every year, GTS carries out a security of supply survey in which it reviews, among other things, how much gas is required from the Groningen field to meet the demand for low-calorific gas. The demand for low-calorific gas in the Netherlands and neighbouring countries is met by gas produced from the Groningen field and high-calorific natural gas blended with nitrogen via quality conversion. In the 2017 analysis, GTS stated that if extraction remained flat, a production level of 21 billion m3 per year is sufficient for security of supply.

Temperature-dependent production

The latest analysis shows that reducing gas extraction whilst maintaining security of supply is possible if the ‘flat production’ principle is abandoned. That would mean making production from the Groningen field temperature-dependent. In that case, it would be necessary to extract between 14 billion m3 of Groningen gas (for a mild year, such as last January) and 27 billion m3 of Groningen gas (in an extremely cold year, such as 1996) to guarantee security of supply.
If there were an immediate transition to temperature-dependent production, the total required volume from Groningen for the current gas year may be between 19.5 and 21 billion m3.

Reducing gas extraction

Two routes can be followed if we want to reduce gas extraction further over the coming years whilst maintaining security of supply: by making production from the Groningen field dependent on temperature, we can make maximum use of quality conversion, a process whereby imported gas is made suitable for domestic use. A level of 33-36 billion m3 of low-calorific gas is achievable using existing conversion methods.

Gas extraction can also be lowered by reducing the demand for Groningen gas, for example by scaling down exports or switching industries and power stations over to high-calorific gas. These actions are already underway, but it will take some time before we notice a fall in demand.

Closing down production clusters at Loppersum

In addition to examining how it can reduce gas extraction, GTS has also, at the request of the Minister, looked at the consequences for security of supply if the six production clusters around Loppersum are shut down. GTS has concluded that six production clusters can be taken out of operation during the current gas year and four of the six clusters around Loppersum can remain structurally closed. Further analysis is required to see whether the remaining two clusters can also be structurally closed.

Type of gas year Temp profile Market volume H-gas enrichment Nitrogen conversion Groningen
Cold 1996 60 13 20-23 27
Warm 2007 47 10 20-23 14

Overview of gas commitment from Groningen field for a cold year and a mild year (rounded to whole bcm)