A revised formula for determining permitted production from the Netherlands' Groningen field this gas year could re-introduce some output flexibility based on heating demand next summer.
Delayed construction of the planned Zuidbroek quality conversion facility means that required Groningen output next summer could be highly weather-dependent, while production previously was expected to be reduced to standby flows from next April.
Instead of starting operations in April 2022 as planned, Zuidbroek will come on line in phases — two out of three conversion units are expected to enter operations at the end of June, while the third could start in mid-August.
And system operator GTS indicated this would "likely" require stronger Groningen production, the energy ministry said. This is because the delay means there will be less high-calorie gas than expected to convert into low-calorie supply for much of next summer.
As a result, the heating degree-day formula set out in the 2021-22 production plan may be revised to re-introduce some output flexibility based on low-calorie demand in summer.
Previous output plans had set a formula that determined permitted Groningen production for the gas year based on degree days over the entire October-September period. But this was changed for 2021-22.
Based on the production plan from September, permitted output would be determined exclusively by degree days this winter. Provided there are 1,670 or fewer degree days in October-March, production of 2.9bn m³ will be allowed over the gas year. Lower overall output would not be possible even if the weather was extremely mild, partly because minimum flows are required at well clusters to keep them operational. If there are more than 1,670 winter degree days, production of 7.06mn m³ will be permitted for each degree day in winter, minus 8.892bn m³ to be subtracted over the whole gas year.
An element that would have provided for output to be adjusted based on degree days in April-September was no longer included because Groningen is to be put on standby once the Zuidbroek site is operational. Operator Nam is to then run the field's remaining clusters alternately at minimum flow levels to ensure production could be ramped up in case of extremely cold weather or system failures.
This means Groningen would no longer respond to fluctuations in low-calorie demand because the addition of Zuidbroek will lift conversion capacity high enough to provide this flexibility.
But with Zuidbroek delayed, Groningen may still need to respond to demand fluctuations next summer.
GTS previously said a delay in construction until the end of next summer could require extra Groningen output of 1.3bn m³ if the weather is warm, and up to 3.6bn m³ if it is particularly cool. This shows that required Groningen output could then be highly weather-dependent, suggesting a revised formula may have to re-introduce an element based on summer degree days.
