Netherlands to build new gas quality conversion site

The Netherlands will build an additional nitrogen ballasting facility to allow for sharp cuts to Groningen gas production from the 2022-23 gas year, while other measures could enable substantial reductions in the next few years.

The government aims to cut Groningen output to 12bn m³/yr by 2022-23 at the latest and to subsequently bring it down to zero by the end of the decade to reduce the earthquake risk in the region.

Building an additional quality conversion site at Zuidbroek will allow for sharp reductions in offtake from the field from the start of the 2022-23 gas year, while it could boost Dutch high-calorie import demand.

The site could become operational by 1 October 2022 and could allow for an additional 7bn m³/yr to be converted into low-calorie gas from high-calorie supply, economy minister Eric Wiebes has said.

Dutch system operator GTS has started preparations for constructing the site, he said.

Successive governments previously delayed a final decision on building an additional site numerous times, saying that additional quality conversion capacity might not be required once the facility became operational because of reduced low-calorie demand across northwest Europe.

Low-calorie demand in Germany, France and Belgium is expected to fall steadily in the 2020s as low-calorie systems are converted to run on high-calorie supply.

But the state supervision of mines had called for Groningen production to be reduced to 12bn m³ "as soon as possible" following an earthquake in Zeerijp in January which was the strongest in the region since 2012.

And building the site would enable such cuts considerably earlier than no expansion of existing quality conversion capacity, Wiebes said.

Nitrogen supply to be increased

The government is also considering increasing the nitrogen supply to existing quality conversion facilities.

GTS said that purchasing additional nitrogen could allow for sites to be used more extensively. And this could allow for an additional 1bn-1.5bn m³ of Groningen gas to be substituted with converted supply.

But increasing the nitrogen supply will require adjustments to the GTS network, the government said. These could be completed by 1 October 2019 at the earliest.

Extensive use of quality conversion sites is to allow for Groningen production to become more weather dependent, with output from the field to be turned down when low-calorie demand is weak, Wiebes previously said.

Industrial switch

The government is advancing plans to switch industrial low-calorie consumers to other sources of supply, such as high-calorie gas or renewable energy. All large customers are to be converted by 2022 at the latest, Wiebes said.

The extent to which this will allow for cuts to Groningen production cannot be determined at this point, partly because it will depend on choices made by the consumers, he said.

GTS said that switching the eight largest users could result in a decrease in demand for Groningen gas of 2.4bn m³/yr. And provided that another 45 companies that are directly connected to the GTS grid could also be switched, this could result in an additional reduction of around 1.2bn m³/yr.

The government has been in talks with the largest consumers over the last few weeks and has urged them to provide a written response within three weeks, detailing their options for phasing out low-calorie consumption, Wiebes said.

Dutch energy and water association VEMW said this week that industrial low-calorie consumers are willing to switch to other energy sources, but this requires a clear framework.

The extent to which the switch would boost Dutch demand for high-calorie gas imports will partly depend on how many firms can use renewable energy sources.

Firms that "cannot become sustainable before 2022", will be switched to high-calorie gas, Wiebes has said.

Cutting household demand

The government expects that making households "gas free" and reducing low-calorie gas consumption by the horticultural sector will allow for further cuts to Groningen production.

It plans to remove 30,000-50,000 households a year from the gas network by the end of its cabinet period in 2021. This could cut demand for Groningen gas by around 20mn-55mn m³/yr, but this could increase later in the decade as an increasing number of households are switched to other supply sources.

Greater use of renewable energy, such as geothermal, residual heat and biomass, could allow for reductions in gas demand from the horticultural sector, Wiebes said.

Horticultural industry association Greenports said last week that its members aim to reduce gas consumption. But this may require policy changes that provide an incentive to switch to other energy sources, it had said.

The sector consumes around 3bn m³/yr, Greenports said. But the association did not specify how much of this is low-calorie supply.

Average utilisation of baseload nitrogen ballasting facilities pc

Dutch supply converted through nitrogen ballasting and enrichment GWh/d

Dutch demand from households and small businesses GWh/d