Equinor and its partners have received additional natural gas export licenses from the Norwegian Ministry of Petroleum and Energy from two Norwegian oil and gas fields to provide natural gas to a tight European market.
Three solutions suggested to solve Natural Gas Shortage Crisis.
1- Equinor which is Starting from October 1, the natural gas production of Oseberg and Troll oilfields will increase by about 3 billion cubic feet compared with the current production.
In June, Equinor has taken measures to evaluate the strengthening of production and exports to the European market. Equinor said that the natural gas production of Osseberg Oilfield will increase from 1750 billion cubic feet to 2100 billion cubic feet, and that of Troll Oilfield will increase from 1.271 trillion cubic feet to 1.36 trillion cubic feet.
Helge Haugane, Equinor senior vice president of natural gas and electricity, said: “This autumn and winter, we will produce more natural gas from these two important oilfields. This is very timely for the abnormal supply shortage facing the European gas market. We will also try to take measures to increase natural gas exports.
It is worth noting that after 25 years of exploitation, the Troll Oilfield has only exploited 50% of its resources. In order to achieve greater development of the Troll Oilfield and strengthen the ability to deliver natural gas to Europe in the coming decades, Equinor recently completed the third phase of the Troll Oilfield project.
With the completion of the third phase of the project, Equinor is currently increasing the production of the Troll oilfield, and it is expected to achieve stable production from October 1.
Equinor is proud to be a long-term and reliable energy supplier, and we are happy to be able to export as much natural gas as possible to the European market. Helge Haugane added to Natural Gas Shortage Crisis.
The amount of natural gas recoverable resources of the Troll Oilfield Phase III project is expected to reach 12.254 trillion cubic feet. The total recoverable natural gas resources of the Troll Oilfield are expected to be 25.25 trillion cubic feet. The Troll Oilfield Phase III project extends the service life of the first phase of the Troll Oilfield and related natural gas processing plants beyond 2050, and extends the stable production period of the oilfield by 5 to 7 years.
2- Russian President Putin publicly expressed Russia’s willingness to play a role in stabilizing the natural gas market and planned to increase pipeline gas supply to Europe to solve Natural Gas Shortage Crisis
Putin said that Russia can increase its supply of natural gas to Europe, but the increase of natural gas is not in the spot market, but in the futures market in St. Petersburg.” We are considering increasing the supply of natural gas, but we need to be cautious, discuss with Russian gas and make reasonable arrangements. He revealed, “Nat gas sales to Europe may set a record, and the flow of natural gas transiting through Ukraine may also exceed the contract quantity between Russian gas and Kiev.”
TAS reported that Russian gas may increase pipeline gas supply in the near future to help Europe avoid an all-blown energy crisis. In addition, Sechin, president of Russocarbon, also expressed his request to export natural gas and said that oil was seeking authorization to export 1 billion cubic meters of natural gas through pipelines.
Some gas traders said that one of the drivers of the price increase was that Russia limited its gas supply to Europe to the level of long-term contracts and reduced Russian gas storage facilities on the European continent to very low levels. In response, Putin said that Russian gas has so far exceeded the contractual obligation of transiting Ukraine to supply gas to Europe this year (Natural Gas Shortage Crisis)
Russian gas said that increasing supply to Russian gas producers and European consumers has a sedative effect. We were all relieved and agreed to this approach. Elena Burmistrova, head of the Russian gas export department, said, “The turmoil in the European gas market threatens the stability of the regional economy and proves that the long-term contract we promote is a safer choice.”
It is worth mentioning that Russia hopes to take this opportunity to further promote the opening of the NORD STREAM 2 gas pipeline. Russian President’s Press Secretary Dmitry Peskov said that Russia has the potential to increase its natural gas supply to Europe because “we have new gas pipelines that are more high-tech and ecological”.
Interx and Telecommunications Agency pointed out that Russia has repeatedly stressed that it has fulfilled long-term contracts, which implies that more shipments can be provided once NORD STREAM 2, which leads to Germany, is approved. The controversial NORD STREAM 2 natural gas pipeline was officially completed on October 6. The Russian side is pushing EU and German regulators to quickly approve the certification of NORD STREAM 2 natural gas pipeline, which has an annual gas transmission capacity of about 550 billion cubic meters can solve Natural Gas Shortage Crisis.
3- LNG from other Sources specially near one such as East Mediterranean Zone including Egypt LNG Hub … which can help as a fast solution for Natural Gas Shortage Crisis.
As winter approaches, the supply gap may widen and increase Natural Gas Shortage Crisis
After Putin expressed his intention to stabilize gas prices, the soaring European gas market eased, which also curbed inflationary pressure on manufacturing and industry in the region to some extent. However, the industry is still worried that the winter with huge gas consumption has not yet arrived, and it may be difficult for Europe to avoid a larger shortage of natural gas supply.
European gas prices have been rising for several months, and further soared to a new peak in October due to the increasing possibility of winter supply shortage. On October 5, the trading price of natural gas contracts delivered by the Netherlands in November hit an all-time high of 118 euros per megawatt-hour, up nearly 400% since the beginning of the year.
On October 6, the price of the natural gas contract delivered by the United Kingdom in November once rushed above £4/sem (1 0.1 million British thermal units) at the opening, less than 0.5 pounds/sem at the beginning of the year, but after Russia expressed an increase in supply, it finally closed at 2.71 pounds/chromm on the same day, with the daily price. The grid fell by 9%. On the same day, the trading price of natural gas contracts delivered by the Netherlands in November fell by more than 10%.
An Xunsi, a consulting firm, said that this was the most turbulent and unpredictable period in the natural gas industry in recent years. Compared with some European countries, the United Kingdom is more vulnerable to high-priced natural gas because of its limited storage capacity and mainly relies on nearly timely domestic production, pipeline and sea freight import systems.
Most British households use natural gas for heating. Given that the country’s coal-fired power generation capacity is almost offline, renewable energy such as wind power has become the main source of energy supply, but in days with low air volume, natural gas is still the most reliable source of energy supply, with natural gas power generation can account for more than 50%.
The Financial Times pointed out that in the context of an accelerated rebound in energy demand, record natural gas prices are one of the signs of global competition for fuel supply, and coal prices for power generation and heating have exceeded their historical peaks in 2008.
The market is confident in Russia’s ability to increase supply and solve Natural Gas Shortage Crisis
The market is generally optimistic about Russia ability to increase supply. Fatih Birol, Administrator of the International Energy Agency (IEA), said that Russia has a lot of room to increase its gas supply to Europe and called on the country to become a reliable energy supplier.
However, Goldman Sachs believes that Russian gas reserves in northwest Europe have decreased by nearly 70% compared with a year ago. Given the company’s extremely low inventory level in Western Europe and Russia’s imminent winter demand, there is a risk that it will not be able to meet its contractual obligations in winter.
In response, IEA analysis believes that Russian gas has both the ability and the strength to increase the volume of natural gas exports during Europe’s peak winter demand by about 15%.
In response to some European public opinion blaming Russia for the rise in energy prices, Fatih Birol said that Russian gas exports are not the only cause of tight supply, and the post-epidemic economic rebound, weather conditions and long-term maintenance of various projects have also had an impact.