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 lastoilshock.com 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.