Dutch court suspends planned Norg gas storage expansion

07 September 2017 14:49 Source:ICIS
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The Dutch council of state has ruled against a capacity increase at the Norg storage facility “in the near future”, saying the minister must first provide greater justification for the necessary increase in pressure at the site.

The court said on Thursday that it was unable to assess the legality of the government’s decision to expand Norg until the minister has taken a new decision, which is not expected before 1 February 2018. The court enforced a 5 billion cubic metre (bcm) capacity limit on the site.

As such, the court has suspended the expansion, which effectively rules out the possibility of any increase in low-calorific natural gas supply flexibility from the key Norg facility until at least winter 2018.

The municipalities of Noordenveld and Leek had asked the Netherlands’ highest general administration court to suspend the government’s proposed expansion of Norg, due to concerns about the potential impact of an increase in the site’s pressure on seismic activity in the region.

A hearing was held on 31 August.

Fundamental uncertainty

Inconsistent and possibly erroneous data reported by NAM for the Norg site has made the fundamental impact of Norg’s expansion decision unclear.

According to NAM data reported via AGSI.gie.eu and accessed on 7 September, the technical capacity listed for Norg increased from 58.2TWh (6bcm) on 30 July to 69.8TWh (7.1bcm) on 31 July. But on 5 September, Norg’s listed technical capacity data fell back to 58.2TWh. These figures are in excess of the 5bcm capacity limit.

The current stock level listed for Norg on 5 September is 57.3TWh (5.9bcm), which is also greater than the 5bcm limit.

NAM has not replied to ICIS’ requests for information, but a spokesman for the ministry of economic affairs said on 5 September that there “seems to be an error” in the data.

AGSI operator GIE had also previously indicated that technical issues were affecting NAM storage data.

“There is indeed an IT issue with NAM and Grijpskerk / Norg data and our IT department is looking into this to be resolved as soon as possible,” GIE said on 17 August.

Neither GIE nor NAM replied to ICIS’ requests for information about Norg storage data on Thursday.

ICIS has approached national energy regulator ACM for comment on the issue, with a spokesman confirming ACM is looking into the matter.

Background

In August 2015, the minister agreed a regulatory change that would allow operator NAM to increase the average pressure of one of Norg’s wells from 225 bar to 347 bar, enabling the expansion of Norg’s technical capacity from 5 billion cubic metres (bcm) to 5.9bcm.

In March 2017, the council of state said the minister must provide better justification for allowing such an increase in pressure, but did not suspend the minister’s decision to authorise the expansion.

Noordenveld and Leek sought this suspension from the court in August, after NAM requested a pressure increase to enable greater storage injections, a Noordenveld spokesperson told ICIS this week.

The Norg L-gas storage facility and high-calorific gas conversion capacity now provides key L-gas supply flexibility to northwest Europe after heavy curbs on L-gas output from Groningen, which no longer serves as a swing field (click here for an ICIS briefing on Groningen production). jake.horslen@icis.com


By Jake Horslen