Dutch Groningen on track for 19.6bcm target after record low gas production in February

Monthly natural gas production from the Netherlands’ giant Groningen field reached historic lows in February, putting output firmly on track to meet the lower end of the government’s new annual cap.

Field operator NAM produced just 1.6 billion cubic metres (bcm) in February, according to data released on Wednesday, the lowest level for the month since the field began producing in the 1960s.

That is down by a third compared with 2017 and by more than 40% compared with the February five-year production average.

The new data brings total production so far for gas year 2017 to 9.7bcm, leaving 9.9-11.4bcm left of the government’s 19.6-21.1bcm/year production quota.

The cap had been set at 21.6bcm/year, but in February economy minister Eric Wiebes advised NAM , a joint venture co-owned by Shell and ExxonMobil, to keep it within the lower range.

Production typically falls in March, which suggests annual output is likely to be at the lower-end of this range by the end of the year.
Lower lows, higher highs

Groningen produces low-calorific gas (L-gas) and supplies customers in the Netherlands, Germany, Belgium and France.

When L-gas supply is insufficient, quality conversion is used to transform high-calorific gas into L-gas.

Plans are underway to wean customers off L-gas, but as Groningen output falls faster than expected conversion rates have soared and additional capacity may have to be brought online.

German energy company EWE recently announced plans to open a new plant by the end of 2019 and the Dutch government is due to decide on expanding its facilities later in March. patrick.sykes@icis.com