More natural gas will be stored in the storage facilities in Bergermeer and Norg this winter than is necessary according to European agreements. In Bergermeer in North Holland, where gas is stored that is suitable for industry, the buffer is filled to 90 percent. Norg in Drenthe, where there is gas that is suitable for households, is already 80 percent full and that may go to 100 percent.
“As far as the stock of gas is concerned, we as the Netherlands are in very good shape,” said energy minister Rob Jetten (D66) on Friday after the Council of Ministers, in which the decision was taken. “At the same time, the concerns are great. Prices will remain high and that will affect households and businesses significantly.”
Gas price almost 250 euros
Since the Russian invasion of Ukraine, gas prices have risen to record highs. In response to the sanctions, President Putin has severely curtailed supplies to Europe. On Tuesday, the gas price even set a record when it was just above 250 euros per megawatt hour: more than ten times more than a year ago. On Friday, the gas price moved between 240 and 248 euros.
These high prices also affect the government, because filling the storage facilities is a costly affair due to the high price level. Bergermeer would already be filled to 68 percent, partly due to government intervention. It costs 210 million to fill the storage to 90 percent. Initially, 623 million euros had been set aside for the first filling operation, but about 200 million of that remained.
Until the outbreak of the energy crisis, filling gas storage facilities was financially interesting for companies: the price is normally lower when the storage room is filled in spring or summer. This stored gas then yields a higher price in the winter, when demand is much higher. At the moment, the price is so extremely high all year round that companies run the risk of the price being lower in the winter than it is now.
Gazprom and Bergermeer
There is another problem for Bergermeer. A large part of the North Holland salvage, more than 40 percent, is in the hands of Gazprom. The Russian state-owned company appears to have no plans to replenish supplies and it was questionable whether it would be possible to fill Gazprom’s space. According to the Ministry of Economic Affairs and Climate, this is now legally covered. Increasing the stock to 90 percent means an additional storage of 1 billion cubic meters. Bergermeer is now 58 percent filled and, according to earlier plans, that would be 68 percent before the winter.
Until last year, the Netherlands used more than 40 billion cubic meters annually, but due to savings, a mild winter and the cessation of business activities, consumption has been nearly 30 percent lower so far this year.
It was not clear on Friday whether Norg will be 100 percent filled, as is the case with the two smaller storage facilities, Alkmaar and Grijpskerk. Earlier, Jetten expressed that wish. “In the coming weeks we will see if we can fill Norg to 100 percent,” he said during a press interview about the gas problem last month.
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GasTerra, which buys and sells gas on behalf of the government, has the task of filling Norg. According to an agreement reached last year with the NAM, in the hands of Shell and ExxonMobil, the stock is now just over 80 percent full. To fill it even further, GasTerra first wanted financial guarantees from the government. A Gasterra spokesperson calculated this week to purchase gas for at least 2.5 to 3 billion euros in order to reach 100 percent. In Norg, this concerns foreign gas (high calorific) that has been made suitable for domestic use by adding nitrogen. This makes it resemble gas that until recently came from the Groningen soil. Many industrial companies use high-calorific gas such as that stored in Bergermeer.
Dissatisfaction with residents of Norg
This Friday it was already expected that the cabinet would give the green light for the further filling of Norg, which with a capacity of 7 billion cubic meters is the largest storage facility in the Netherlands. But there has been dissatisfaction among residents around the gas field for some time, partly because the settlement has been discontinued to compensate for the damage caused to homes. According to the cabinet, the government will first consult with the residents about the discontinued damage settlement and additional research will be conducted into the causes of the damage.
EU member states have agreed to the European Commission’s requirement that each country fill its storage areas to an average of at least 80 percent before next winter. Compared to other countries, the Netherlands has a considerable gas storage capacity. Nevertheless, the stocks, which are partly also built up for export, according to a recent energy report from ABN Amro accounts for at most a quarter of the demand during an average winter.