Gazprom Puts Stakes on Dutch Gas Storage Project

By Yekaterina Pokrovskaya, February 11, 2014

rate of up to 65.7 million cubic meters. UGS Bergermeer is mainly focused on controlling the reliability of natural gas supply through the Nord Stream pipeline, Gazprom said.

In 2012, Gazprom supplied 111.13 billion cubic meters of natural gas to markets in Western Europe, including largest importers – Germany, Italy and the United Kingdom. Forecasts suggest that over the next decade EU members’ gas imports could grow by more than 50 percent. By means of directly linking Russia’s largest gas reserves with Europe’s gas transportation system, Nord Stream will cover about 25 percent of the European Union’s additional demand for imported gas.

“One of the key points is that we are offering a global gas storage facility to the companies that want to store gas. Typically, pumping the gas during the summer months when the gas is cheaper, and extracting it in the winter when the prices are higher. That way, industrial users can benefit from the price difference that is reflected in a summer-winter spread,” explains Virtanen.

The Netherlands is a key player in maintaining the EU gas balance. The country operates natural gas stock exchange (Transfer Title Facility, TTF), which trades gas through spot contracts. In 2011, TTF concluded deals for 163.6 billion cubic meters of gas, while physical deliveries reached 38.3 billion cubic meters. TAQA Energy has already booked necessary capacity for TTF exchange contracts for the next 10 years.

Gazprom also confirmed that in parallel to providing greater safety and security of gas supply to consumers, larger storage capacity of UGS Bergermeer would provide extra flexibility during seasonal fluctuations of demand. The link, though, between the growing storage capacity and fluctuating prices will not be the determining factor.

The UGS Bergermeer is located just 20 kilometers from the BBL pipeline feeding natural gas from the Netherlands to UK. Last April, Gazprom and local gas giant Gasunie signed a protocol of intent to study options for expansion of the Nord Stream pipeline into the United Kingdom. If the project goes through, throughput capacity of the new trunkline could reach approximately 27.5 billion cubic meters, Gazprom CEO Alexei Miller said. Implementation of such project would provide Gazprom additional access to the UK market, which consumes about 100 billion cubic meters of gas annually.