Nam calls for Groningen gas field closure in 2022

The Netherlands' Groningen low-calorie gas field could be closed completely in 2022, while keeping it on stand-by afterwards would require substantial production to be maintained, operator Nam has said.

There will be "no role for Groningen after 2022" as it is highly unlikely that it would be needed to guarantee security of supply then, Nam said in response to a consultation on the field's draft output plan for the 2020-21 gas year.

The Dutch economy ministry's plan foresees that Groningen output would halt from about mid-2022 when a new quality conversion facility in Zuidbroek is expected to become operational, significantly increasing the scope to convert high-calorie gas into low-calorie supply. The field is to remain on stand-by afterwards until at least about mid-2025 to serve as a back-up that could help meet northwest European low-calorie demand in situations of exceptionally strong consumption or disruptions to other sources of supply.

But Nam said this would likely be unnecessary and, at the same time, undesirable for the company and local residents. Groningen production is to be phased out in a bid to minimise seismic activity in the region.

But for the field to remain on stand-by, it would still need to produce 2.4bn-5.8bn m³/yr, Nam said. Running Groningen as a back-up source would be "similar to idling a car", therefore requiring the minimum production levels, the operator said.

This would be in conflict with the ministry's plans to halt offtake by 2022. The 2020-21 Groningen plan foresees that production would be about 9.3bn m³, assuming an average number of heating degree days over the gas year, while the ministry expects that output of just more than 3bn m³ could be sufficient in 2021-22.

Nam also said that, in any event, the field's production facilities are not designed as a back-up and therefore may not be reliable enough for such a role. The operator could not take any responsibility for potential interruptions to supply as a result of running Groningen in such a way, it said.

And Dutch gas firm Gasterra's calculations earlier this year indicated that, based on temperature profiles from the past 30 years, Groningen would not need to be called on at all after 2022 in any case, Nam said.

The operator said a decision to keep Groningen as a back-up source should be taken only if a "thorough quantitative analysis of all additional risks, side effects, costs and benefits" demonstrates a need to do so.

This should also involve a critical investigation into how EU standards with regard to determining capacity required to ensure security of supply are adopted and interpreted, Nam said. And it should be determined what other means are available to guarantee security of supply. These could involve contracting capacity at low-calorie sites outside of the Netherlands, providing incentives to keep these facilities operational or changing the layout of existing sites, it said.

By Stefan Krümpelmann