LNG, high stocks curb Dutch Groningen gas output in April
Natural gas production from the Dutch Groningen field is unlikely to come anywhere near this year’s cap after it was close to record lows in April.
Production totalled 1.24 billion cubic metres (bcm) in April 2019, data published by field operator NAM on Tuesday showed.
This was the second lowest volume ever produced by a field after October 2018.
This brings the total gas production for the 2018 gas year so far to around 11bcm. The target set by the government for the current gas year is 19.4bcm, which means that more than 8bcm is left for the rest of the gas summer.
However, production from the field is unlikely to get anywhere close to the target. ICIS analysis shows that if production continues at the average monthly rate seen in the past three years, output from the field will be between 14-15bcm by the end of September.
This would be more than one quarter below the target for the year.
The Dutch government started publishing targets to curb Groningen production and halt it by 2030 after earthquakes affected the region in March 2018. NAM is not allowed to produce more than the yearly target unless there are exceptional circumstances such as cold spells in winter or a shortage of nitrogen for H-to-L-gas quality conversion.
High LNG sendout from the Dutch terminal and close-to-record high storage levels helped to curb Groningen production in April.
Arrivals at the Dutch Gate terminal kept daily sendout close to the nameplate capacity at 33mcm/day on average.
A total of 11 cargoes arrived at Gate in April 2019, nearly four times the number which docked in the same month last year, LNG Edge showed.
The busy arrival schedule started in October 2018 and filtered into the gas summer, which helped curb domestic production and allowed shippers rely less on stored gas during the winter.
In total 62 vessels delivered to Gate in the October 2018-April 2019 period.
Dutch storage sites were already more than 50% full by the end of April, with more than the double of gas in store compared to May 2018, data collated by ICIS showed.
This also limited injection-related demand throughout April.
This will likely keep a lid on injection demand during the summer and together with continued high LNG arrivals could further reduce Groningen output while still allowing shippers to replenish their stocks before the beginning of winter.
Source: ICIS, Heren (Additional reporting by Alice Casagni) https://www.icis.com/explore/resources/news/2019/05/14/10363767/lng-high-stocks-curb-dutch-groningen-gas-output-in-april