The Dutch government and state-owned GasTerra are yet to provide clarity over whether the country's low-calorie Norg storage facility will be filled this summer.
Nam — a 50:50 joint venture between Shell and ExxonMobil — submitted a phase-out plan for the site in September. The plan envisioned a first phase in which gas injections in summer would halt, to allow for the complete drawdown of stocks in the following winter. Following the emptying of the site, the firm wants to produce Norg's cushion gas, for which it already has a permit. But Nam still needs the climate and energy ministry's consent to start extracting the cushion gas.
The Dutch government said in October that it could take up to two years before it could grant consent to Nam. In addition, Dutch regulator ACM must approve the decommissioning of any storage site, which it can deny if it assesses that the closure would endanger security of supply.
In this regulatory environment, it is unclear whether injections will take place at the facility this summer. Asked by Argus, the Dutch climate and economy ministry said only that "GasTerra has the exclusive access to use the underground storage site Norg" and uses the facility on a "commercial basis", which in recent years has led to refilling of the site.
And GasTerra confirmed to Argus that it has contracted Norg for the 2023-24 storage year and "will make use of this storage capacity as we deem fit". The TTF summer 2024 market closed at an average discount of €4.07/MWh to the following winter contract on 1-14 February, suggesting an economic incentive for GasTerra to inject.
In addition, under EU-wide regulations, each member state must lift gas storage inventories to 90pc of capacity by 1 November — although the Netherlands' target for this date was only 73pc in 2023, to factor in the amount of gas that is exported to the UK. To comply with the European Commission's rules, the Netherlands would need to fill Norg unless it stops operating as a storage site.
Norg remains central to Dutch security of supply, given that it is the country's single-largest piece of gas infrastructure following the shuttering of the giant low-calorie Groningen field.
Under EU regulations, each country must have enough capacity to fulfil an exceptionally high gas demand scenario with a statistical probability of occurring once in 20 years, in the event of disruption to the single-largest piece of infrastructure.
This regulation led to Groningen playing a reserve role this winter with no production planned unless in exceptional circumstances. The field was readied for production last month because of cold weather.
As part of the Groningen phase-out, the government made agreements regarding Norg and the Grijpskerk low-calorie storage facility that are set to expire in 2026, according to Dutch energy and water association VEMW. The association stressed the importance of "follow-up agreements" for the filling of storage facilities.
In the longer term, the government intends to shut Norg as part of its plan to phase out underground gas infrastructure in the Groningen and Drenthe provinces, judging by a website by environmental pathway Grijpskerk Norg, a joint initiative by the economy ministry, local governments and Nam. But there is little clarity on time frames.
Tensions between government and Nam
The relationship between the government and Nam has deteriorated in recent months, with Norg one of many areas of dispute.
Dutch climate and economy minister Rob Jetten said in October that he was "not enthusiastic about the idea of extracting gas from another gas field so close to the Groningen gas field". Jetten said that he "would have considered it more socially responsible if Nam had waited a while before asking this question". State secretary for mining Hans Vijlbrief echoed this view at the time, criticising the timing of the application.
And Vijlbrief said in October that the government and Nam were clashing over financial matters around the Groningen field shutdown, and were set for "robust" talks.
Shell and ExxonMobil launched arbitration proceedings against the Netherlands in December, the companies and Vijlbrief said this week, with Norg cited as one of the issues.
