Efforts to cut gas supplies from Russia appear to be working
Norway state-owned gas operator Gassco reported that the country exported 29.2 Bcm of gas to western Europe in the first quarter of the year, overtaking Russian exports to Europe of 20.29 Bcm, based on data from Gazprom (ticker: OGZPY). Data from both companies shows the trend began in Q4 of last year when Europe bought 29.5 Bcm from Norway and 19.8 Bcm from Russia, reports Reuters.
This marks the first time Norwegian exports have convincingly overtaken supply from Russia since a brief period in 2012.
Increasing gas supplies from Norway are part of the European Union’s drive to cut its energy dependence on Russia as tensions over events in Ukraine continue to sour relations between Russia and Western Europe. The sharp drop in oil prices since last November also helped to encourage greater imports from Norway as the country offered more flexible pricing than its Russian counterpart.
Several large buyers held off on purchases from Russia hoping that lower oil prices would eventually translate into more affordable gas prices as well.
Troll Field back online
Norwegian capacity was boosted during the quarter by the end of an outage at the Troll field, which produces around 30% of the country’s gas, further
pushing prices down. According to Statoil (ticker: STO) the Troll field “represents the very cornerstone of Norway’s offshore gas production.”
Troll returned to full capacity of 120 Mcm/d in March of last year, but volumes were deliberately kept low over the summer in line with reduced demand.
The Troll field is also home to the Troll A Platform, the tallest structure ever moved by humans. At 472 meters, it is comparable in height to the Petronas Towers in Malaysia.
Russia remained largest supplier in 2014, but share of supply is slipping
Despite the increased gas supplies from Norway, Russia remained the largest supplier of gas to Western Europe in 2014, said the European Commission, the E.U.’s executive body. Imports of Russian gas to the E.U. fell by more than 10% in terms of volume, while its share of total imports dipped to 42% from 43%. Norway’s share of E.U. imports increased to 38% from 34% in 2014.
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