Groningen gas field to produce for another 50 years

Supergiant Groningen natural gas field in the northern reaches of the Netherlands will continue to produce gas for at least another 50 years, according to Roelf Venhuizen, managing director of Nederlandse Aardolie Maatschappij BV (NAM).

Uchenna Izundu
OGJ International Editor

GRONINGEN, June 16 -- Supergiant Groningen natural gas field in the northern reaches of the Netherlands will continue to produce gas for at least another 50 years, according to Roelf Venhuizen, managing director of Nederlandse Aardolie Maatschappij BV (NAM).

NAM, a joint venture of Royal Dutch Shell PLC and ExxonMobil Corp., operates the field, which has so far produced 1,700 billion cu m of gas since first starting production in 1963. To date, Groningen’s reserves are 60% depleted and it holds 1,000-1,100 bcm of gas still to be recovered.

Groningen underpinned the development of a gas market in northwest Europe. Speaking at the 50th anniversary celebrations in Groningen, Venhuizen said the company has drawn up a business plan to 2068 that involved the field. “I’m convinced that gas storage will last beyond that,” he told an audience comprising Her Majesty Queen Beatrix of the Netherlands, politicians, and company representatives.

More than 300 wells have been drilled on the field, which spans 900 sq km. Its pressure from 350 bar is falling meaning that NAM has invested in compressors at most of the production clusters to keep it going. The company has spent €2 billion over 15 years to maintain long term production with the work program involving modernizing the plant and technology, ensuring the operation is fully unmanned, and improving environmental standards.

“The last site will be modernized with new compressors in September,” Venhuizen stated.

Groningen is not empty now because the Dutch government has implemented a policy of focusing on small fields; this has meant that Groningen has adopted the role of a swing supplier. Due to the small fields policy, gas volumes equivalent to half of Groningen field have been discovered in hundreds of others.

But since the field’s discovery in 1959, energy markets have become politicized and liberalized. The Netherlands must plan for the next stage in the gas cycle as it will no longer be a net exporter in 15 years, urged Maria van der Hoeven, Dutch minister of economic affairs. So far, Groningen has brought €160 billion in revenues for the country.

“We want to be a gas hub for northwest Europe with gas storage capacity, transport capacity, and trading opportunities. We need to look at new partnerships to realise this,” van der Hoeven said.

She added that the government is keen to develop LNG import terminals and pipelines to diversify its supplies in the future and it was keen to see an improvement in the gas markets. “We’re in the transition period from fossil fuels to non fossil fuels and we’re trying to develop policy on this. It requires working with companies and the support of the population, particularly for gas storage and carbon capture and storage.”

But the meltdown of the financial markets and volatility of commodity prices have made it more difficult for operators to proceed with investment decisions. Gasunie Chief Executive Officer Marcel Kramer said companies required clear policy frameworks, international dialogues with suppliers, and a sound safety track record to ensure that they could invest in pipelines and facilities to bring gas to the market.

“The Dutch government has laid down the ground rules for gas investment but it needs to do more international cooperation, especially at cross borders,” he said.

Contact Uchenna Izundu at uchennai@pennwell.com.

More in Production Operations