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Norway 'skeptical' about European gas price cap, but retains open attitude: PM

Highlights

Oslo agrees to 'even closer' dialogue with the EU

EC set to propose detailed market intervention measures

Gas price cap among instruments under discussion

  • Author
  • Stuart Elliott
  • Editor
  • Valarie Jackson
  • Commodity
  • Natural Gas

Norway is "skeptical" about the impact that an EU gas price cap would have on tackling the energy crisis given the shortage of gas in Europe, its Prime Minister, Jonas Gahr Støre, said Sept. 12.

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Støre held talks Sept. 12 with European Commission President Ursula von der Leyen about the energy crisis in Europe, in which gas prices have hit record highs.

Platts assessed the Dutch TTF month-ahead price at a record-high Eur319.98/MWh Aug. 26, according to S&P Global Commodity Insights data. It was last assessed at Eur205.70/MWh Sept. 9.

It was the second time Støre and von der Leyen had spoken by telephone in less than a week.

The new talks came after EU energy ministers Sept. 9 agreed to give the EC a mandate to detail proposals on gas and power market intervention, including a gas price cap.

Støre said he agreed with von der Leyen to have "an even closer dialogue" with the EU in the future on the various proposals that were now on the table.

"We enter the talks with an open attitude, but are skeptical about a maximum price for gas," Støre said. "A maximum price will not do anything about the fundamental problem, namely that there is too little gas in Europe."

Støre and von der Leyen had already talked Sept. 7 about the EC's proposals for measures to deal with the energy situation in Europe.

There have also been calls for Norway to consider offering European buyers a discount on their gas payments to help alleviate the crisis.

Increased gas supply

Norway, however, has already increased its gas supplies to Europe this year through changes to field production permits and the diversion of gas normally used for re-injection for export.

Norwegian pipeline gas exports to Continental Europe and the UK have been at the top of the five-year range since February amid record prices, according to Platts Analytics data.

Pipeline gas exports totaled 76.1 Bcm from January through August, up more than 6 Bcm year on year, the data showed.

In May, Norway raised its estimate for gas production this year by 6% to 122 Bcm as high prices provide an incentive for increased gas output across the Norwegian Continental Shelf.

"From the outset, Norway has done what we can to alleviate the situation in Europe, and Norwegian companies have significantly increased their production of gas," Støre said Sept. 12.

"Norway is now delivering 8% more gas to Europe than we did when the war broke out," he said.

Støre said it was important to have a close dialogue with its partners and allies in Europe on the various solutions to the situation that had arisen as a result of Russia's war against Ukraine.

He said both Norway and the EU benefitted from a "more stable energy market."

Støre and von der Leyen also discussed the role of long-term contracts in ensuring more stability in the market, with Støre emphasizing that it was companies that entered into such long-term contracts.

In their previous conversation Sept. 7, Støre said it was important not to introduce measures that had "unintended consequences" and—in the worst-case scenario—could make matters worse in the longer term.

"Predictability and a long-term perspective will be an advantage for both gas producers and customers in Europe. This will ensure that Europe will continue to have enough energy in the future," he said.