December 12, 2022


Dutch Studying LNG Import Capacity Expansions

Dutch energy infrastructure company Gasunie is studying options for the temporary expansion of LNG import capacity in the Netherlands in order to reduce energy prices.

The company is doing so after consulting with the country’s economic affairs and climate ministry.

The Netherlands is already planning to expand the capacity of its existing 8.8 million ton year Gate LNG import terminal in the port of Rotterdam by an additional 3 million tons by 2026. The country is also looking to expand the capacity of its new 5.9 million ton/yr Eemshaven floating import terminal.

Gasunie said that new and existing LNG sites are being considered to expand LNG import capacity, with one or more new floating LNG terminals potentially needed for the next year. It says it is studying the port of Terneuzen in southwestern Netherlands as a possible site.

The Dutch economic affairs and climate ministry said last week it is looking at building at least two LNG terminals in the country by 2024.

Energy storage owner VTTI also said Monday it is exploring the development of a 3.6 million ton/year floating LNG import facility in the Netherlands to be operational at the beginning of 2024. VTTI is co-owned by Swiss trader Vitol, IFM Investors and the Abu Dhabi National Oil Co.

While Dutch forecasts of no gas shortages during the current winter season have been proven correct, natural gas prices continue to be high due to the “structural scarcity” of gas in northwestern Europe, Gasunie said.

Price Reduction Options

Gas prices can be reduced by energy savings, accelerating the energy transition and expanding LNG import capacity. Dutch households and companies are already reducing consumption and Gasunie is already developing a national hydrogen network, which unfortunately cannot replace gas demand for the next two to three years.

Therefore, adding LNG import capacity is “the most appropriate approach to stabilize prices on the gas market,” the company said.

Gasunie wants to deploy the capacity expansion as early as the 2023/24 winter season and preferably before the start of the storage injection season in April, until the winter of 2025/26. It said the expansion will be temporary due to the energy transition, with the intention of using “as many parts of the temporary installations as possible for hydrogen transport after a few years.”

Created with Highcharts 9.0.0(million tons)DUTCH LNG IMPORTSUnited StatesRussian FederationNorwayQatarAngolaTrinidad and TobagoSpainEgyptNigeriaOthers201720182019202020212022024681012Source: Kpler

Dutch Fund Gas Storage Purchases

The Dutch government said last week it is planning to spend €520.5 million (US$549 million) to fill the 4.6 billion cubic meters/yr Bergermeer storage facility in preparation for winter 2023/24.

The government has tasked state-owned energy company EBN to procure 15 TWh-20 TWh (1.35 Bcm-1.8 Bcm) of gas to store in Bergermeer next year. It has been ordered to leave 7 TWh (0.6 Bcm) of gas stored at the facility until the first quarter of 2024.

“This year has shown that we cannot take energy security for granted. Even next year, it will remain difficult to attract enough gas at acceptable prices,” energy and climate minister Rob Jetten said.

"That is why it is important to provide clarity to the market quickly, to have a plan and to carefully apply the lessons learned from this year, such as staggered and coordinated procurement with European countries," he added.

Dutch gas stocks are almost 84% full as of Dec. 10, while the Bergermeer facility is 85.8% full, according to Gas Infrastructure Europe.

For more coverage of the Ukraine crisis, visit Ukraine Crisis: Energy Impact >
Jaime Concha, Copenhagen

Novatek Discovers Gas Field for Arctic LNG 1

Novatek has discovered a gas field on Gydan Peninsula, expanding the resource base of the proposed Arctic LNG 1 project, the Russian LNG developer said in a statement on Monday.

Arctic LNG 1 is expected to be the next liquefaction project of Novatek in the Russian Arctic after the 19.8 million ton per year Arctic LNG 2, scheduled for late 2023, and 5 million ton/yr Obsky LNG where a final investment decision might be made in the first half of 2023.

Novatek maintains its ambitious plans to expand LNG production in the Arctic to up to 70 million tons/yr by 2030 from around 21 million tons expected at the flagship Yamal LNG plant this year,

However, those plans might be complicated by EU technology sanctions as well as withdrawal of key investor TotalEnergies, and western equipment suppliers, because of Russia’s war in Ukraine.

Girya Field

The new field, named after former Novatek deputy CEO Viktor Girya who died in 2017, harbors recoverable reserves of 52 billion cubic meters of natural gas (about 1.8 Tcf) and 2 million tons of liquids under the Russian classification, the company said.

The field was discovered after drilling the first exploration well at the Bukharinsky license area adjacent to the Trekhbugorny block on Gydan Peninsula.

“With this discovery, the company will expand its resource base in the Gydan Peninsula with the view to subsequently putting the field into efficient production under the development of its prospective projects,” Novatek said.

Fourth Plant

Licenses for both blocks — as well as for three other blocks and two gas fields — are held by Novatek’s Arctic LNG 1 subsidiary, which is supposed to be the operator of the project of the same name that should become Novatek’s fourth LNG plant in the Arctic.

The first plant, Yamal LNG, started operation in late 2017. The second plant, Arctic LNG 2, is now under construction and is scheduled to launch the first of three trains in late 2023. Novatek seeks to take a final investment decision on Obsky LNG in the first half of 2023, which it wants to fully rely on domestic technology and equipment.

Reserves Build-Up

Arctic LNG 1 is still in the exploration stage, as Novatek seeks to make sure it has enough resource base to make the project similar in size to Arctic LNG 2. Arctic LNG 1 would also similarly consist of three offshore trains installed on concrete gravity-based structures that Novatek plans to produce at its Novatek Murmansk yard.

Apart from Bukharinsky and Trekhbugorny, Arctic LNG 1 now has licenses for the Geofizichesky 1, Gydansky 1 and North Gydansky blocks, as well as for the Geofizicheskoye, Gydanskoye and Soletsko-Khanaveiskoye fields.

Novatek has been actively acquiring these blocks at state auctions and intensified their exploration over the past several years. In October, Novatek CEO Leonid Mikhelson said the company did not see any more attractive blocks on Gydan or Yamal peninsulas among those that haven’t been yet auctioned by the government.

Total Directors Leave Board

Separately, Novatek said Monday that two representatives of TotalEnergies — Arnaud Le Foll and Dominique Marion — have resigned from the Russian company’s board of directors.

Novatek has received notices of resignation from both Le Foll and Marion, it said.

The resignation follows Total’s statement on Dec. 9 that it would no longer recognize its shareholding in Novatek and would write down $3.7 billion on its 19.4% stake in the company.
Staff Reports

Australian Producers Slam Proposed Price Cap

Australia's Labor government has proposed a temporary cap on domestic wholesale gas and thermal coal prices in a package of measures designed to limit soaring energy costs in the country's East Coast states.

Australian gas producers have slammed the proposals, which the Australian Petroleum Production and Exploration Association (APPEA) described as a "radical intervention" that will "practically dismantle the Australian gas market."

However, the government argues that market intervention is necessary to limit increases in retail gas and electricity prices, which are expected to rise by 20% and 36% respectively in 2023-24.

LNG Buyers Spared

The cap has been set at A$12 per gigajoules (US$7.7 per million Btu) and will only apply to new domestic wholesale contracts, whether long-term or spot.

This means that spot LNG cargoes sold to international buyers would not be impacted.

The cap is slated to be introduced before Christmas for a 12-month period, with a review scheduled in mid-2023 to evaluate it.

The level of the cap was set by the Australian Competition and Consumer Commission (ACCC) after a study of offers that producers made to East Coast buyers in 2021 for supply in 2023, as well as analysis of production cost data.

Of the 289 domestic offers made in 2021, 96% were below A$12/gigajoules, and the average offer was A$9.2/gigajoules.

Code of Conduct

The price cap would not apply to undeveloped fields, such as Santos' Narrabri project in New South Wales, which will instead be covered by a new "reasonable pricing" provision.

It is intended to provide a basis for producers and buyers to negotiate domestic wholesale gas contracts at reasonable prices.

Reasonable prices are defined as "efficient long-run marginal costs of domestic supply, allowing for a commercial return on capital reflective of the industry’s risk profile."

The reasonable pricing provision will be part of the industry's voluntary code of conduct that will become mandatory after a consultation period that will run until February 2023.

Introduced last year, the code of conduct is an industry-led initiative aimed at leveling the playing field for negotiations between gas producers and consumers by creating greater transparency around pricing.

The code of conduct and the price cap will only apply to East Coast states, and will exclude Western Australia and the Northern Territory.

The price cap and the code of conduct will both be enforced by the ACCC, which could impose "significant civil penalties" on companies failing to comply.


The government also intends to fast-track reform of the Australian Domestic Gas Security Mechanism (ADGSM), allowing for it to be activated on a quarterly basis from Apr. 1, if deemed necessary.

The ADGSM allows the government to restrict LNG exports to ensure that enough gas is available for domestic use.

Current regulations allow the government to activate the mechanism only once a year.


Gas producers have strongly criticized the proposals saying more supply is the solution to rising prices, and that additional regulations will damage the investment environment in Australia.

Exxon Mobil told Energy Intelligence that the Gippsland Basin joint venture decided last week to reduce its investment cycle from 12 months to six for the first time in five decades because of the prospect of market intervention.

Exxon holds a 50% stake in the Gippsland Basin venture, while Woodside holds the other 50%.

Producers also say the market has been working properly.

Woodside said it received bids from 20 buyers that nominated a price they were comfortable to pay for around 50 petajoules of gas offered for 2024-25.

"That is what defines a reasonable price and means the market is functioning as it should," a Woodside spokesperson told Energy Intelligence.
Marc Roussot, Singapore

EU Still Divided Over Gas Price Cap Proposal

EU member states remained deeply divided about a proposal to cap wholesale gas prices as the bloc's energy ministers prepared to grapple with the vexed question again on Tuesday.

The Czech Republic — current holder of the EU's rotating presidency — insisted that the differences would have to be bridged in order to pass a broad package that would also include joint gas procurement and fast-tracking of renewable energy projects.

A senior EU diplomat said ambassadors would continue discussions into the night on Monday, focusing on outstanding areas of disagreement including the right level for the proposed price cap and its duration.

"It is a very complicated and thin margin," the diplomat said of the prospects of finding a solution that would be palatable to all sides.

Talks at the weekend focused on a Czech plan to impose a cap if the price of the front-month Dutch TTF gas futures contract exceeds €220 per megawatt hour ($67 per million Btu) for five days and also exceeds an international LNG reference price by at least €35 for five days.

That was considerably lower than the European Commission's previous proposal of a cap at €275/MWh, which 12 countries rejected as too high.

But Poland, Italy, Belgium and Slovenia among others are still pushing for a significantly lower price of €160/MWh ($49.5/MMBtu) — with a spread of €20/MWh — for all TTF futures contracts, not just the front month.

IEA Warning

While the EU diplomat said that the 27 member states needed to reach an agreement on all elements of a multi-part deal on Tuesday, another extraordinary meeting of EU energy ministers has been scheduled for Dec. 19.

Asked if the Czech Presidency might resort to qualified majority voting as a way to close the deal, the EU diplomat said the negotiating teams were "operating on the basis of maximum possible consensus."

Germany and the Netherlands remain deeply concerned about the market impact of a cap on wholesale gas prices and in particular about the EU's ability to secure sufficient gas supplies after a sharp fall in imports from Russia this year.

Commenting on the price cap proposal on Monday, European Commission President Ursula Von der Leyen said the aim is to respond effectively to "price spikes and manipulation" without cutting off supply.

Von der Leyen was speaking at a presentation by the International Energy Agency (IEA) at which the agency warned that the EU could face a gas shortage next year if Russia ends its remaining exports to Europe and Chinese demand rebounds.

Under that scenario, the EU could face a shortfall of 27 billion cubic meters in 2023, the IEA said. For comparison, EU gas consumption amounted to 412 Bcm in 2021.

The agency urged European governments to step up energy efficiency measures and increase investment in renewable energy.
Tom Pepper, Brussels and Eric Thorp, Brussels

Equinor Brings on Gasfield to Feed Hammerfest

Phase 1 of the offshore Askeladd gas development in Norway will provide 18 billion cubic meters of feed gas for the country’s nameplate 4.2 million ton per year Hammerfest LNG terminal, Norwegian major Equinor said in a statement on Dec. 12.

Production from the Askeladd field, which is part of the larger Snohvit field, is expected to extend plateau production from the Hammerfest LNG plant up to three years, said Thor Johan Haave, Equinor’s vice president, operations and maintenance, at Hammerfest LNG.

The additional volumes will certainly be welcomed in Europe as the continent is expected to rely even heavier on LNG supplies next year, due to missing Russian pipeline gas supplies.

“The development was delivered on schedule and NOK 650 million below the cost estimate of NOK 5.2 billion [US$520 million],” according to Equinor’s statement.

Norway’s sole LNG export facility, and the only such facility in all of Europe, produces the equivalent of 6.5 Bcm of gas per year, Equinor said, which equals about 5% of all Norwegian gas exports.

Although the Askeladd project was already completed back in 2020, its start up had to be postponed due to a fire accident at Hammerfest LNG in 2020, which forced Equinor to shut down the facility until June this year.

Hammerfest LNG has exported 2.56 million tons of LNG so far this year, according to data from Kpler. In 2019, its last fully operational year, the facility exported 4.84 million tons.

Equinor is also looking to bring additional fields online, and it expects Askeladd West to be its next development in the Snovhit field.

Hammerfest LNG "delivers significant volumes to customers in Europe, and the gas from the Barents Sea reinforces our position as a predictable and reliable gas supplier," added Haave.
Daniel Stemler, Madrid

Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India26.4126.8926.4126.8925.9425.7927.4425.3027.3426.4725.6025.2725.67
Sodegaura, Japan26.8928.4928.5028.6226.7922.6528.0325.4527.8829.0325.9424.8727.01
Zeebrugge, Belgium44.2042.0841.5342.2143.5443.9943.0841.5442.9141.5843.6842.4443.79
Huelva, Spain30.8228.9128.4129.0130.1829.9229.8028.3029.6528.4530.2429.0130.25
Isle of Grain, UK40.9238.8438.2938.9540.3140.7139.9638.3239.6638.3540.4139.2040.52
Everett, US7.205.395.785.496.846.650.016.366.104.967.44----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback11. Jul25. Jul8. Aug22. Aug5. Sep19. Sep3. Oct17. Oct31. Oct14. Nov28. Nov12. Dec10203040506070Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia30.0029.800.28-0.20
SW Europe31.4031.49-1.050.09
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)0.346.596.255.58
NBP, UK (futures)-0.8441.6242.4641.17
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF-0.9942.2943.2841.06
Zeebrugge (Belgium)------31.76
German NCG-0.3338.6839.0137.87
NBP (UK)-1.1041.8642.9641.24
US Markets
US Spot Prices
Sabine Pass, Louisiana1.736.735.004.13
Corpus Christi, Texas----0.00--
Cove Point, Maryland4.109.365.263.96
Elba Island, Georgia--6.73----
Nymex Henry Hub Futures
Near Month0.346.596.255.58
Second Mth0.336.426.085.48
Third Mth0.225.795.575.02
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaJan '22Feb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '22Oct '22Nov '22Dec '220255075100125Energy Intelligence