Natural gas production in the Netherlands plummeted to the lowest levelsince October 14 on Saturday and Sunday, triggering worries on supply optionsin Europe when a cold spell is due to arrive by next week, data from S&PGlobal Platts Analytics showed.
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* Output down to 85 million cu m/d at weekend
* February's Groningen production hit 2-year low
* Low output sparks supply concerns as cold spell due
Dutch gas production, including Groningen and other smaller fields, hit85 million cu m on Saturday and Sunday, from 113 million cu m Friday.
The fall of the Dutch gas production was due to low gas demand on theback of mild temperatures, traders said.
"Utilities have a lot of temperature-dependent contracts, leading to afall in production despite higher gas prices," a trader said.
Dutch domestic demand hit 86 million cu m and 87 million cu m on Saturdayand Sunday, respectively, down from 117 million cu m on Friday.
With Dutch gas production running low and weak storage volumes, marketparticipants said they were concerned about a reduction in supply options inEurope when a possible winter blast of cold hits next week. As a result, theDutch wholesale gas prices for day-ahead delivery soared on Monday, trading atEur24.975/MWh at 1600 GMT, up from Eur19.95/MWh on Friday's assessment.
LOW FEBRUARY PRODUCTION
In February, natural gas production at the giant Groningen gas field inthe Netherlands fell to a two-year low, following the closure of its Loppersumclusters in response to a request from the Dutch regulator, data from operatorNAM showed Monday.
Production of L-cal gas at Groningen was 1.6 Bcm in February, down 20%month on month and down by 34% year on year.
Production within individual areas of the field totaled 1.18 Bcm in Oost,340 million cu m in Zuidwest, 83 million cu m in Eemskanaal, and 3 million cum in Loppersum.
With the 21.6 Bcm quota set for Gas Year 2017-18 (running October 1 toSeptember 30) and 9.69 Bcm having been produced so far, this leaves NAM with amaximum of 11.91 Bcm to be produced, at an average rate of about 1.7Bcm/month.
Falling production in February was expected following the closure of allfive Loppersum areas at the giant onshore field on February 2 in response to arequest from economy minister Eric Wiebes on the heels of a 3.4-magnitudeearthquake on January 8.
Production from the remaining three areas of the field was also seenfalling in February, with NAM seeking a fairly flat output profile amidpressure from public and political debates on further output cuts. Even withthe arrival of the cold blast in Week 9 that triggered spikes in gasconsumption, the Dutch gas production averaged 135 million cu m/d.
Dutch Economic Affairs Minister Eric Wiebes is expected to make a finaldecision on further Groningen production cuts in this gas year by March.
--Karen Kwok, firstname.lastname@example.org
--Edited by James Leech, email@example.com