Dutch industrial gas switch falls further behind

Four of the Netherlands' nine industrial low-calorie gas users that are to be switched to other supply sources will not be able to meet the 1 October 2022 deadline, with conversion to be completed by the following summer, Dutch transmission system operator GTS said.

The operator expects three of the consumers to complete their switch in the second quarter of 2023 and the last to complete its switch in the third quarter of 2023. GTS previously expected the four companies to be switched about six months after the deadline.

The delay has been mostly caused by the postponed entry into force of the bill mandating the change and because of a longer lead time in obtaining permits and developing possible mitigating measures, GTS said. The Dutch economy ministry had aimed for the bill to take force at the start of this year, but there were delays to the legislative process resulting in it only entering into force last week.

The law prohibits consumers that used more than 100mn m³ of low-calorie supply in at least two of the past three gas years from receiving low-calorie supply after September 2022. This will require the country's nine largest low-calorie gas consumers to switch to other supply sources. These could include high-calorie gas or renewable energy sources, but GTS expects all the affected firms to ask to be connected to the high-calorie grid. The operator expects them to submit their conversion requests "immediately after the bill enters into force".

Small delays in the process have had an outsized impact on the switching date for these gas consumers, because they cannot be converted in the winter, GTS said.

But the operator does not expect the delays to have an effect on future required production in an "average year" at the Groningen field if other measures remain on schedule, because these consumers are already almost completely supplied with converted low-calorie gas.

The switch is one of a range of measures aimed at reducing required offtake from Groningen. The field's output is to be minimised as much as possible to limit earthquake risks in the region, with offtake expected to completely halt by mid-2022, assuming temperatures in line with the long-term norm.

The other five consumers to be converted to other supply sources are expected to be ready to be switched to high-calorie gas from low-calorie gas by October 2022, GTS said. The switch for one consumer — which uses the gas as a raw material — requires little investment. Another consumer can be switched this year. And the other three will be completely switched over in 2022, GTS said.

By Jacob Mandel