Norwegian gas will go to highest bidder
Posted on Tuesday, January 29th, 2008

(Podcast) Britain can expect no favouritism from Norway as the European gas market tightens over the next decade. Norwegian supplies will be allocated on a strictly commercial basis, according to Deputy Minister of Petroleum and Energy Liv Monica Stubholt.

In an interview with and Global Public Media, Ms Stubholt stressed that Norway was raising its gas production and would be a “reliable and predictable supplier”.


Several studies suggest European gas market will be tight or under-supplied by the middle of the next decade. One forecast from E.ON, cited in a recent presentation by industry trade body Euro Gas, suggests supply could fall 10% short of predicted demand by 2015, with the deficit widening to 23% by 2020. Ms Stubholt said, “We are aware of an increase in demand and we will do our best to meet this”

Speaking on the sidelines of the World Future Energy Summit in Abu Dhabi last week, the Minister would not say when she expected Norwegian gas production to peak, merely noting that production would rise from about 88bcm/year today to about 120bcm “in a few years”.

One independent forecaster, Dr Michael Smith of Energyfiles, predicts Norway’s gas production will peak in 2020 at 162bcm, falling sharply to 111bcm by 2030. Norway’s oil production peaked in 2001.

With UK gas output in terminal decline, Norway is Western Europe’s only remaining gas exporter of any significance, leaving the continent’s future supply critically dependent on Russia and on LNG imports from North Africa and the Middle East. Plans to create a new “gas OPEC” are due to be discussed at a meeting of the Gas Exporting Countries Forum in Moscow in June.

Ms Stubholt stressed that “Norway does not run its gas supply based on foreign policy concerns or on favourites, but on commercial market conditions”. When asked if that meant Norwegian gas would go to the highest bidder, Ms Stubholt replied “That sounds about right”.

Listen to the interview with Liv Monica Stubholt at Global Public Media – public service broadcasting for a post-carbon world.

2 Comments on “Norwegian gas will go to highest bidder”

euan mearns Says:
February 1st, 2008 at 5:17 pm

Ms Stubholt seems well informed about the Norwegian gas market. 88 bcm today rising to about 120 bcm per annum in a few years (excluding a Troll expansion) seems about right – complies with the official view from the NPD.

You should be aware however that there are doubts about Norway actually managing to reach 120 bcm. The bottom line is that the associated gas from mature oil fields such as Gullfaks, Statfjord and Oseberg will shortly begin to decline and this will erode the current boost from Ormen Lange coming on line.

I find it surprising therefore that you do not mention such things but choose instead to quote Energy Files who seem to have a wildly optimistic scenario that is way beyond the Norwegian governments’ and any other scenario I have seen.

The current Norwegian gas pipeline export network has capacity of 120 bcm per annum, Norway consumes 4.5 bcm per annum and they have just built 5.7 bcm LNG capacity in N Norway. So that totals about 130 bcm production capacity – assuming the reservoirs can support that. Why then should the Norwegians spend good money to expand this by another 32 bcm – only to see the production collapse a few years later?

For those interested there are detailed articles on European gas security on The Oil Drum:

Rune Likvern Says:
February 5th, 2008 at 12:09 am

Having followed the development in Norwegian nat gas supplies through data from NPD (Norwegian Petroleum Directorate) for several years, there is nothing in NPD (or MOE) data on production, reserves and forecasts that supports Dr. Michael Smiths forecasts.

The Norwegian nat gas supplies will be heavily affected as the Sleipner area (mainly nat gas production, and presently second largest producer of nat gas from NCS) goes into (what is now expected to be) a steep decline in the near future, and later on Gullfaks South (also classified as a nat gas field).

More on European nat gas supplies;

Post a Comment

Get new articles by email:

Delivered by FeedBurner


RSS FT Commodities News
Copyright © 2016 David Strahan | Ecological Hosting | Cover Design by Darren Haggar Site by JPD Studio