Yesterday, Russian state owned energy provider Gazprom cut off gas supplies to major buyers in Germany, Netherlands and Denmark, such as GasTerra, Orsted, and Shell. This decision was fueled by these companies refusing to renew contracts with Gazprom with the conditions that they pay for Russian gas in rubles. The combined gas flow from these contracts amounts to more than 4 billion cubic meters of gas a year.
However, the German and Dutch governments reached an agreement to jointly drill for natural gas in the eco-sensitive zones some 19km north of the islands of Schiermonnikoog and Borkum. In fact, only last year did the German State of Lower Saxony refuse to issue permits for the drilling. However, due to the events of yesterday, the EU decision to ban Russian has imports by the end of the year, and the ongoing disruption of gas trade in the Black Sea, these governments reversed the previous decisions. This reversal will allow for an ecological inspection on June 4th, 2022 and the immediate construction of a pipeline and drilling platform which will be supplied electricity from German windfarms in the region.
The Dutch government announced that the first gas will be delivered by the beginning of 2024 from these platforms. They also said that environmental impacts have been considered and adjustments have been made:
“An extensive report has been made on, among other things, the environmental effects. This shows that all the required conditions are met. Nevertheless, Schiermonnikogers and nature organizations continue to have various concerns about this gas extraction. Therefore, several adjustments have been made. For example, the production platform is a lot lower, making it less noticeable from the island. The platform is also placed further away from an oyster project, the drilling fluid is not discharged and water released during gas production is cleaned with an extra filter.”
The Netherlands is the second-largest producer and exporter of natural gas in Europe, following Norway, and the Netherlands is home to Europe’s largest natural gas trading hub in terms of spot volumes. The Netherlands produced just over 1.5 trillion cubic feet (Tcf) of natural gas in 2015. Most of its natural gas fields are located offshore in the North Sea, although a number of them are located onshore, including Groningen, one of the ten largest natural gas fields in the world. According to OGJ, the Netherlands had approximately 26.9 Tcf of proved natural gas reserves as of January 1, 2016.
