News item | 01-04-2022 | 17:25
The ruling of the arbitration on Norg has provided clarity about the compensation that the government must pay to NAM for filling Norg with pseudo-Groningen gas. The arbitration arose from the agreements made in the Norg Agreement. The central government and NAM agreed that from the 2019/2020 gas year, the gas storage would only be filled with pseudo-Groningen gas. This prevents the extraction of 11.9 Nm³ from the Groningen field and thus paved the way for closing the Groningen field years earlier.
State Secretary for Mining Hans Vijlbrief: “Filling Norg with pseudo-Groningen gas is necessary to reduce gas extraction in Groningen as quickly as possible. For the cabinet, even with the historically high gas prices, the safety of the people of Groningen is paramount. rapid closure of the Groningen field remains a high priority for the cabinet.”
NAM owns gas storage Norg and was previously able to use the gas storage commercially. Because Groningen gas can no longer be stored in Norg, NAM must now purchase pseudo-Groningen gas. As a result, NAM incurs additional costs. In addition to purchasing pseudo-Groningen gas, which is by far the largest part of the costs, NAM has to incur additional transport costs and additional costs for the loss of the flexible deployment of Norg. When concluding the agreement, NAM and the government agreed that a market price would be paid for this. The calculation drawn up by GasTerra has been submitted to the arbitrator.
At the end of each gas year, the total costs will be calculated. The compensation for the 2019/2020 gas year amounts to approximately €85 million (1.1 billion Nm³) and will be set off against part of the advance paid under the Interim Agreement. For gas year 2020/2021, the compensation is approximately €800 million (2.7 billion Nm³). For the current gas year, this concerns 5 billion Nm³. With the current historically high gas prices, this is expected to be expensive for the current gas year and that therefore also means that the compensation for the current gas year will be high. Due to the current volatile prices, it is difficult to estimate how high the compensation will be for the current gas year and the next two gas years. Based on the prices of March 22, this could be approximately € 6.5 billion cumulatively for these three gas years. For all years together, this is expected to be approximately €7.5 billion. The compensation is always determined at the end of the relevant gas year on the basis of the actual market prices.