Gas from Norwegian Troll field helps UK meet gas demand

Norway’s largest gas field lies on the Norwegian Continental Shelf in the North Sea. The Troll gas field has the ability to produce enough gas to supply almost 40% of the UK’s annual gas demand. The UK is the largest importer of Norwegian gas, closely followed by Germany and France. While the UK gas market is adapting to the loss of Rough – the UK largest offshore gas storage facility – the Troll gas field is anticipated to make up for some of that loss.

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While the UK’s gas production in the North Sea is steadily declining, Norwegian production seems to be increasing. Gas production at the Troll gas field increased by 10% from 1st October 2016, and a further increase of 9% for the following gas year.

The UK continues to depend on strong imported gas supplies from Norway due to a number of reasons. The largest offshore gas storage facility has been closed, and will withdraw all cushion gas contained within over the next few years, during winter periods. Rough traditionally met 70% of the UK’s winter gas demand. Additionally, the UK Government has pledged to close all coal power stations by 2025, in an attempt to reduce carbon emissions. However, in place of coal power, the UK has relied on CCGT and OCGT power stations (gas fired power) to meet between 40-60% of daily power demand. Understandably, this has increased the UK’s need for gas via LNG tankers and through gas interconnecting pipelines.

On the other hand, Norway tends not to rely on gas for heating or for power generation. In fact, Norway are capable to producing 97% of electricity from renewable source such as hydro power. Heating demand is suppressed through water based heat pumps across the country. Norwegian gas consumption has been minimal for years, and natural gas is rarely used for heating or for power generation.

 

 

 

 

Sources: Reuters, the Guardian, Gassco, Bloomberg