The Netherlands' economy ministry supports the proposed conversion of the Grijpskerk site to store low-calorie gas, but it is waiting on a storage plan proposal from its operator, Nam, and the ministry will not support its conversion if it leads to higher output from the giant Groningen field.
The ministry also rejected Nam's proposal to phase out production from Groningen quicker than previously expected.
If Grijpskerk is converted, it would have to be filled with low-calorie gas created from high-calorie supply by nitrogen ballasting, rather than filled with Groningen output, Dutch economic affairs and climate minister Stef Blok said. The ministry will not allow any additional production from Groningen in order to fill Grijpskerk with low-calorie gas, he said.
This conversion previously was expected to require stronger output from Groningen in the 2021-22 gas year than under the current production plan and would result in lower standby output from the field in subsequent years.
The operator has already started technical preparations for the conversion, well before final approval, but the minister said he was still waiting for Nam to submit a new storage plan.
Still, the proposed conversion would contribute to the region's security of supply and could enable the Netherlands to accelerate its closure of Groningen to 2023 or 2024 instead of the previously expected 2025-28, Blok said.
And if this measure is taken, the low-calorie Norg gas storage site may no longer be needed before 2027. Nam may consider stopping using Norg for storage during this time and submit a plan to produce the site's cushion gas. But such production will be allowed only if determined safe by the state supervision of mines.
Norg will enter the new gas year with stocks of 4.8bn normal m³, more than the 4bn m³ previously expected by system operator GTS, the ministry said.
Earlier Groningen closure rejected
The ministry also rejected a proposal by Nam that would lead to Groningen's earlier closure, keeping the field's production plan unchanged.
A limited number of the field's clusters will need to remain on line to guarantee security of supply, even after GTS finishes its new quality conversion site at Zuidbroek, planned for April 2022. Groningen may still be needed in the event of an extremely cold winter or gas system failures. Because of this, a limited number of clusters must be ready to produce at a minimum level, the ministry said.
The ministry left the field's production plan for the 2021-22 gas year unchanged. Permitted field offtake will be 3.9bn m³ in October 2021-September 2022, assuming an average number of heating days. It will be capped according to a heating degree formula in winter and flat in summer, according to the plan. This is firmly below the 8.1bn m³ allowed under similar weather conditions for the current gas year.
Groningen's Tjuchem cluster will still be closed at the start of the 2021-22 gas year, with no others to be closed over the period, leaving 11 on line until at least the end of the gas year. Nam proposed shutting five of Groningen's clusters by 1 April 2022, in addition to Tjuchem, following the completion of the Zuidbroek facility.
Until the new nitrogen installation has been proven to function properly, Nam will not be allowed to close additional production locations, the minister said, adding that he does not want to make irreversible decisions that can have significant consequences for the reliability of the Dutch low-calorie network.
But as soon as production locations are no longer required in the context of security of supply, they can be shut down, he said.
The chances of serious problems with nitrogen installation in 2022-23 are classified by GTS as "small", but in case of such a failure, it could create a gas shortage for about 1mn households over periods of peak demand.
Low-calorie demand reduction on track
Sufficient progress in reducing low-calorie demand has been made across the region, with the phasing out of exports on track, because of major efforts in Belgium, Germany and France, Blok said.
Dutch low-calorie gas demand slipped by 10.6TWh — or 3.3pc — this winter from a year earlier. And the ministry expects low-calorie exports to be completely phased out by 2029.
The potential acceleration of conversion in Belgium — which could further reduce the need for Dutch low-calorie production — is being investigated, with a final decision from transmission system operators expected by the end of this year.
