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New lower Norwegian natural gas transit tariffs likely by May - ministry

13 Feb 2013 18:15:38 | esgm

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Plans in Norway to lower transmission capacity tariffs for new natural gas volumes destined for continental Europe and Britain could be in place as early as 1 May, according to new information from the Norwegian Ministry of Petroleum and Energy.

Last month, the Norwegian government proposed to lower a component of the transport tariffs in the Gassled system as a means of encouraging greater exploration and production in opened areas of the Norwegian Sea and the Barents Sea south, (see ESGM 15 January 2012).

Gassled is a partnership of energy companies and formal owner of the infrastructure associated with the transport of gas from the Norwegian Continental Shelf.

The ministry concluded, in a translation of the consultation document it provided to ICIS, Gassled could still make a reasonable return on investment if tariffs are lowered. The conclusion came after the ministry analysed Gassled's revenues from transport agreements to date and found they exceeded a level that was taken into account when the Norwegian Tariff Regulation was adopted in 2003, the year Gassled was formed.

Reduced tariff element

Among the proposed changes, the ministry intends to alter the capital element of the tariff across some areas within Gassled's system. Norwegian transmission tariffs consist of an operating component and a capital or "K-element", the latter of which is stipulated by the ministry.

The ministry plans to scrap the K-element that forms part of the tariffs for entry capacity into Kollsnes and Karsto natural gas processing plants, and the Oseberg platform. It proposes a lowering of the K-element that constitutes the exit capacity tariff for volumes transported to mainland Europe and Britain. The plan will mean the K-element from exit tariffs will fall from Norwegian krone (NKr) 0.0557 per standard cubic metre (€0.00756 per cubic metre) to NKr0.0071 per standard cubic metre.

New changes

The next round for booking capacity is due on 2 April, but the ministry is likely to ask Norwegian grid operator Gassco to postpone the period until 1 May, when its estimates the new tariffs will be set and have come into force.

Capacity reservation rounds and the signing of new transport agreements are conducted twice a year, normally in April and September, the ministry said.

Gassled stakeholders have until 15 March to respond to the consultation. Statoil and Silex Gas Norway previously told ICIS they would address the proposals once they had considered them in more detail.

Other stakeholders include Petoro, Solveig Gas Norway, Njord Gas Infrastructure, Silex Gas Norway, Infragas Norge, Statoil Petroleum, Norsea Gas, ConocoPhillips Skandinavia, DONG E & P, GDF SUEZ E&P and RWE Dea Norge. Kirsty Ayakwah

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