In this list
Natural Gas

FEATURE: Netherlands on standby to decide future of Grijpskerk gas storage site

Commodities | Electric Power | Electricity | Energy | Electric Power Risk | Energy Transition | Emissions | Carbon | Renewables | Natural Gas | Natural Gas (European) | Oil | Crude Oil | Refined Products

Market Movers Europe, June 6-10: OPEC+ announces aggressive production cut; carbon markets gather in Germany

Energy | LNG | Natural Gas | NGL

Platts LP Gaswire

Energy | Oil | Energy Transition

APPEC 2023

Energy | Natural Gas | Energy Transition | Hydrogen

Dubai's Kent awarded large UK electrolytic hydrogen FEED contract

Metals | Shipping | Energy | Energy Transition | Natural Gas | Oil | LNG | Coal | Steel | Steel Raw Materials | Renewables | Refined Products | Fuel Oil | Crude Oil | Emissions | Carbon

Commodity Tracker: 5 charts to watch this week

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

FEATURE: Netherlands on standby to decide future of Grijpskerk gas storage site


Could be used as 'back up' instead of Groningen

Storage service contract to expire at end-2021

Grijpskerk has some 11.4 Bcm of cushion gas

  • Author
  • Stuart Elliott
  • Editor
  • Alisdair Bowles
  • Commodity
  • Natural Gas

London — The Dutch government is waiting for the results of studies into possible options for the use of the Grijpskerk gas storage facility in the Netherlands before making a decision on its future.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The 2.6 Bcm capacity Grijpskerk facility is operated by NAM -- a joint venture between Shell and ExxonMobil -- which said in 2019 it would not renew its storage service contract after it expires at the end of 2021.

However, the Dutch government is looking at the possibility of the facility being used as a "back-up" source of supply in the event of an emergency, such as a sudden demand spike during periods of cold weather.

The ministry had previously been considering asking NAM to keep parts of its giant Groningen field -- which is set to close in mid-2022 -- open and available for "back-up" supply.

"There's not yet a final decision concerning Grijpskerk," a spokesman at the Dutch economic affairs ministry said Jan. 27.

"We're waiting for the results of some studies -- I expect these to be finalized in the next few weeks," the spokesman said.

A decision will then be made on using Grijpskerk in order to close the Groningen field, he said.

Asked to comment, a spokesman for NAM referred S&P Global Platts to the economic affairs ministry as the body that will take the decision.

The ministry has also been through significant changes in the past two weeks following the resignation of the entire Dutch government on Jan. 15 due to a child welfare fraud scandal.

While the government pledged to continue in a caretaker role until new elections are held in March, economic affairs minister Eric Wiebes, who was reportedly linked to the scandal, resigned immediately.

Wiebes had been instrumental in tightening the restrictions on gas production from Groningen and in bringing forward the date that the field would close entirely to mid-2022.

The new economic affairs minister is Bas van 't Wout, who took office on Jan. 20.

Other Grijpskerk roles

NAM has said previously that discussions would be held with the local authorities on possible ways to use the site -- including producing the cushion gas from the facility or using it for other "sustainable" energy generation.

The local municipality has already pointed out to the NAM that redeployment of the Grijpskerk site should occur "against the background of the energy transition."

But Grijpskerk may not be transformed either way if the Dutch government insists on the site being held in reserve in the event of a gas market emergency.

The government originally planned for parts of the Groningen field to be held in reserve and switched back on to supply the Dutch market in such an event, with as much as 1.5 Bcm/year of potential production capacity able to come back at short notice.

Dutch gas grid operator GTS has said this could be needed under extreme conditions such as very low temperatures or large scale-disruption to gas infrastructure.

However, NAM believes Groningen is not designed to work in that way and also sees the option of Groningen being used as a "back-up" muddying the waters when it comes to the field's closure.

Groningen is to be closed because of the risk of earthquakes triggered by production at the field, which have blighted the Groningen province in recent years.

If the Dutch government turns to Grijpskerk to play the role of "back-up" instead, it could limit NAM's options for using the site.

Grijpskerk currently holds some 11.4 Bcm of cushion gas -- gas that is permanently stored to maintain sufficient pressure in the facility -- which would be profitable for NAM to produce once it ends storage activity at the site.

A similar scenario played out with Centrica's Rough gas storage site in the UK, which ceased its storage activity in June 2017 but was then used as a conventional producing asset, pumping out the cushion gas for commercial use.

NAM ceased gas production from Grijpskerk in 1994 and converted the site into a storage facility in 1997.

According to data from Gas Infrastructure Europe, Grijpskerk is currently around 52% full with some 14.4 TWh (1.36 Bcm) of gas in stock.

If it were to cease operating as a storage site in 2021, it could see more withdrawals and limited injections this summer.

Grijpskerk -- designed to store high-calorific gas -- is one of a number of sites in the Netherlands that have around 13 Bcm of working storage capacity, with the largest site at Norg historically used as a flexibility instrument to manage low-calorific gas production from Groningen .

The country is also home to the TAQA-operated, 4.6 Bcm capacity Bergermeer storage site and the smaller, fast-cycle 0.3 Bcm capacity Zuidwending facility.