LNG

Shell UK said it completed the restart of operations at the Pierce field in the UK Central North Sea after a significant upgrade project to allow natural gas to be produced after years of the field producing only oil.

The UK said that flaring during offshore production of oil and gas in the North Sea has been cut in half following four consecutive years of reductions aimed at cleaner production methods even as the nation has become a higher net importer of natural gas as LNG and pipeline deliveries from Norway.

Gassco, the Norwegian pipeline natural gas operator and whose transported volumes are the main competitor to LNG, reported a jump in deliveries to Europe with Germany being the main recipient, though the total fell short of the record deliveries made in 2017.

Gassco said it exported a total of 116.9 billion cubic metres, the equivalent to energy quantity of 1286 terawatt hours, through pipelines to Europe in 2022.

Germany represented the biggest increase by importing 11 percent more natural gas from Norway than in the previous year.

“The year 2022 has, in all clarity, demonstrated how important Norwegian natural gas is and will be as a reliable energy source to Europe.,” said Frode Leversund, Chief Executive of Gassco.

“We usually deliver less gas during the summer months than in winter, but last year’s exports were at near-winter levels all the year through,” explained Leversund.

Norway has by far been Europe’s biggest supplier of natural gas throughout a turbulent 2022 after the Russian invasion of Ukraine.

“At the same time, the demand for more renewable and cleaner energy, at the expense of coal, has rendered European countries more vulnerable,” said CEO Leversund.

“The war in Ukraine has led to an increase in the demand for stable and reliable deliveries of natural gas, and the production of Norwegian gas is vital for meeting Europe’s energy needs,” he added.

Record in 2017

While the Norwegian natural gas exports through pipelines to Europe totalled 116.9 Bcm, the total was less than the 2017 record year when 117.4 Bcm was exported.

Gassco said that the biggest rise in exports in 2022 was to Germany, which received nearly 54.8 Bcm of gas.

“The energy quantity equals more than four times the annual hydroelectric power production in Norway,” noted Gassco.

After Germany, the UK was the second-largest recipient of Norwegian gas with 27.9 Bcm, a drop of 11.7 percent from 2021.

Gassco pipeline deliveries to France at Dunkirk increased by 4.7 percent from the previous year to 17.8 Bcm.

Belgium’s pipeline gas receipts at Zeebrugge rose by 2.6 percent to 15.6 Bcm.

Gassco also started pipeline gas deliveries via Denmark to the Baltic Pipe in September 2022 that now links Poland directly into the gas delivery system between Norway and continental Europe.

“The gas transportation system will also contribute to strengthening the security of supply to both Poland and Denmark and other countries bordering the Baltic Sea,” said Gassco.

Gassco, the Norwegian pipeline natural gas operator and whose transported volumes are the main competitor to LNG, said it was given the all-clear by Norwegian police after what it described as “an unclear situation” at the Nyhamna gas plant in Western Norway processing supplies for Europe.

Equinor, the Norwegian major and the UK’s Centrica, owner of the British Gas utility, have signed a deal for the delivery of more Norwegian pipeline natural gas over the next three winters and the accord will slightly lessen the need for more LNG deliveries to UK terminals.

The PX Group, which operates the UK St. Fergus Gas Terminal and Teesside Gas Processing Plant, has been appointed by North Sea Midstream Partners (NSMP) to run its recently acquired small-scale Risavika LNG liquefaction plant in Norway.

PX Group, which specializes in providing services in the process, energy and chemical sectors, is currently responsible for processing around 30 percent of the UK’s gas supply and operates many of the UK’s key strategic sites on behalf of clients.

“The represents PX Group’s first significant operations contract outside of the UK,” said Chief Executive Geoff Holmes.

NSMP acquired the Risavika LNG plant, located in southwest Norway near Stavanger, in November 2021.

The Risavika facility has a capacity of 300,000 tonnes of LNG per annum and operates predominantly on electricity produced from renewable sources.

The plant was formerly owned by Gasum of Finland and uses feed gas from offshore Norway to supply the LNG maritime fuel and truck transportation markets.

The PX Group said it had set up a new operating entity in Norway, PX Norge AS.

NSMP closed the deal to buy the Risavika plant on November 16.

NSMP agreed with Gasum an extensive tolling agreement under which Gasum would continue to ensure deliveries of LNG and liquefied biogas (LBG) to its customers from the Risavika facility.

The separate bunkering solution, serving maritime customers, is not included in the scope of the NSMP-Gasum transaction and both parties agreed at the time not to disclose the transaction price.

PX Group CEO Holmes added that his company was delighted to be joining NSMP at Risavika.

“It is exciting for PX Group on a number of levels, not least because it represents PX Group’s expanding international footprint. It’s also our first major LNG site, which is in our capability sweet spot,” stated Holmes.

“LNG plays a critical role in the energy mix and is a component in the transition to lower-carbon sources of energy for sectors such as maritime,” said the CEO.

UK natural gas prices hit a record level as system operator National Grid issued warnings on supply deficits and more coal-fired power was required in the absence of LNG shipments mostly drawn to North Asia by higher spot prices.

The US exported 14 liquefied natural gas shipments for a second straight week amid Gulf of Mexico restrictions because of a hurricane warning, while Asian and European LNG values increased for the Northern Hemisphere winter cargo market.