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Dutch court approves current production quota for Groningen gas field

Highlights

Follows objections to 2020/21 quota of 8.1 Bcm

Economy minister 'correctly' determined safety risk

Quota set to drop to 3.9 Bcm for 2021/22

The top administrative court in the Netherlands ruled July 21 that the current quota of 8.1 Bcm for production from the giant onshore Groningen field was fair, following objections from the Groninger Bodem Beweging (Groningen Soil Movement) and some Groningen residents.

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In its ruling, the Dutch Council of State (Raad van State) said the economy ministry had "correctly determined" the safety risks for local residents when setting the quota for Gas Year 20 (Oct. 1, 2020-Sept. 30, 2021).

A production cap has been in place for a number of years to limit the impact of earthquakes linked to gas production at Groningen, with the quota set to fall to just 3.9 Bcm for the next gas year starting on Oct. 1, 2021.

The Council of State also said the economy ministry had taken measures to reduce gas extraction at Groningen to zero "as quickly as possible."

"It is expected that from 2022 no more gas will be needed from the Groningen field without jeopardizing security of supply," it said.

The Council of State said the ministry had to balance both the interests of residents and of gas consumers in setting the quota.

"The minister correctly determined the extraction level for the year 2020-2021 in order to meet security of supply and has explained in sufficient detail what measures are being taken to improve the situation of the people of Groningen, including reducing gas production to zero as quickly as possible," it said.

The reduction is proceeding faster than predicted, it added.

The economic affairs ministry has said it would take a final decision on the quota for Gas Year 2021-22 in September. "That is then the very last 'normal' production decision for the Groningen field," it said.

Full closure

Dutch gas grid operator Gasunie Transport Services (GTS) said in late June that the full closure of Groningen could take place as early as 2023.

Under current plans, the majority of Groningen production will end in mid-2022, but parts of the field will be kept open as a "backup" gas source with full closure likely between mid-2025 and mid-2028.

However, GTS said the final closure of Groningen could be realized earlier. "As an independent national gas grid operator, GTS has indicated to the minister that it is possible to have the final closure of the Groningen field take place as early as 2023," it said.

It said this would be possible thanks to several factors. These include: the accelerated conversion of end-users in Belgium from low-calorific gas (L-gas) to high-calorific gas (H-gas); and the possible switch of the Grijpskerk gas storage facility from H-gas to L-gas.

One final factor is the development of the nitrogen installations in Zuidbroek. This, GTS said, is a necessary measure to bring gas extraction in Groningen to zero "as quickly as possible."

GTS said it expects the Zuidbroek facility to be ready in the spring of 2022.