Norway's Equinor has turned "every valve" to increase its gas production, CEO Anders Opedal said Feb. 9, as the state-controlled company looked to benefit from record high gas prices.
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Speaking to analysts after Equinor published its Q4 earnings, Opedal said Equinor had increased its gas supplies to Europe in the last quarter by 16.5% year on year.
"As European gas demand surged last autumn, we turned every valve to increase volumes and new measures were taken," Opedal said.
Among the measures taken by Equinor was to divert gas usually reinjected for oil recovery at the Gina Krog field instead for export to Europe.
"This winter, the energy realities in Europe have demonstrated the importance of stable and reliable deliveries of gas from Norway. Currently, we see low inventories, low spare capacity and too low energy investments over time," he said.
European gas prices remain at sustained highs, having hit all-time record levels in December on winter supply concerns.
The TTF day-ahead price hit a record high of Eur182.78/MWh on Dec. 21, an increase of 985% year on year, according to S&P Global Platts price assessments.
Prices have cooled since, though they remain high, with the TTF day-ahead contract assessed Feb. 8 at Eur75.80/MWh, still a year-on-year increase of 265%.
'Volume is value'
In its Q4 report, Equinor said its Norwegian gas production averaged 813,000 b/d of oil equivalent, up by 17% year on year.
Its realized European gas price in Q4 2021 was $28.76/MMBtu, up from just $5.04/MMBtu in the same quarter of 2020.
Equinor CFO Ulrica Fearn said the company had "actively" responded to the tight market and increased its gas production in Norway "to provide much-needed additional supply to industries and consumers in Europe."
"And the record gas prices, combined with our focus on optimizing gas volume, paid dividends -- quite literally," she said.
"We talk about value over volume as a strategy. And in these market conditions, volume is also value. We have delivered high efficiency and flexed production towards the most valuable opportunities," Fearn said.
Equinor has long followed a "value over volume" strategy, shutting in gas production when prices are low and then ramping up output during times of high prices.
Fearn added that Equinor was committed to securing gas supplies from Norway to Europe in the future.
"We expect to produce more than 40 Bcm annually towards 2026," she said. "With flexibility in production and our low cost of supply below $2/MMBtu, we are positioned to create significant value."