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European gas market can manage cuts to Groningen output - industry official

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World Pipelines,

European gas networks will not be seriously affected by another round of production cuts at the Groningen field in the Netherlands, a leading pipeline company and gas industry official said in an interview with Reuters on Wednesday.

The Dutch government recently announced that output at Groningen would need to be cut further to avoid seismic risks.

As recently as 2013 Groningen’s output accounted for two-thirds of Dutch production and met approximately 10% of EU demand.

“The European gas system has leeway and can handle further declines in Dutch production. There is no supply problem,” said Stephan Kamphues, Board Spokesman of Vier Gas Transport, the sole owner of Open Grid Europe (OGE), Germany’s 12 000 km gas pipeline.

The worries around Groningen have influenced Europe’s gas prices, but with an abundance of gas, LNG arriving by ship and investments in north-south and east-west routes for piped gas, the developments do not offer a significant threat to supply security to Europe in the short-to-medium-term.

“The vision is once the Netherlands have left (as producer), the market will decide on the origin of gas,” Kamphues added.

Along with Germany, Groningen delivers a range of volumes to France, Belgium, the UK and Italy, countries that, according to Kamphues, were equipped to absorb alternatives.

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