Norway’s gas production exceeds forecast by 12 percent in July

Norway produced 360 million cubic meters (12.7 billion cubic feet or Bcf) of natural gas per day (MMcmd) last month, 12.3 percent more than the official forecast, government data showed on Tuesday.

Gas production in 2024 has continued to rise year-on-year, with July’s figure also up from June’s 345.8 MMcmd (12.2 Bcfd), according to data released by the Norwegian Offshore Directorate.

The Nordic country, a major gas supplier to Europe, sold 11.2 billion cubic meters (395.5 billion cubic feet) of gas last month, up 800 million cubic meters (28.3 billion cubic feet) from the previous month.

Norway produced 1.8 million barrels of oil per day (MMbd) in July, more than the previous month and unchanged from July 2023. July oil production exceeded forecasts by 5.9 percent.

Total liquids production was 2.1 million barrels of oil per day, while gas and liquids production totaled 691,000 cubic meters (24.4 million cubic feet) of oil equivalent per day, exceeding forecasts by 6.2 percent and 9.3 percent, respectively.

EU market

The European Commission’s latest quarterly gas market report showed that Norway remained the European Union’s largest pipeline gas supplier in the first quarter of 2024, with 54 percent, or 22 billion cubic meters (776.9 billion cubic feet). Norway’s total share of the EU’s gas imports, including liquefied natural gas, was 34 percent in the first three months of the year, ahead of the United States (20 percent) and Russia (19 percent).

According to the Commission, Norway has overtaken Russia as the EU’s largest gas supplier since the second half of 2022, months after the Russian invasion of Ukraine.

However, the EU has only allowed its member states to stop importing gas produced in Russia into their territory from 2024. The decision is contained in a regulation adopted by the European Council on May 21. The Gas and Hydrogen Market Regulation aims to promote lower-carbon gas fuels, diversify countries of origin and make prices more affordable.

“The updated gas market framework gives Member States the possibility to stop or limit imports of pipeline gas and LNG from Russia and Belarus in line with the REPowerEU objectives,” the Commission said in a statement at the time. REPowerEU outlines the 27-member bloc’s plans to achieve energy independence from Russia, which were launched in response to the war.

According to the regulation, EU governments must first consult the Commission before imposing restrictions on Russian gas to ensure that such a measure will not affect supplies and will not lead to a breach of obligations towards third countries.

Europe’s post-conflict fossil fuel shortage has led to a boom in approvals for projects on the Norwegian continental shelf. “These projects, approved under Norway’s temporary tax regime, will help maintain high gas production on the continental shelf until 2030,” Rystad Energy said in an analysis published on January 25, 2023.

“While key production fields such as Troll, Oseberg and Aasta Hansteen will slowly enter the decline phase in the coming years, control projects such as Aker BP’s Yggdrasil Hub (commissioning in 2027), Shell’s Ormen Lange Phase 3 (commissioning in 2025) and Equinor’s Irpa (commissioning in 2026) will be of particular importance in maintaining a consistently high gas flow from Norway to Europe.”

According to the research and energy information company, Norwegian gas production is expected to reach 121 billion cubic meters (4.3 trillion cubic feet) in 2028. This would enable the country to meet more than 30 percent of the gas needs of the EU and the United Kingdom.

“NCS liquids production is expected to be sustained well into the future,” Rystad Energy added, thanks to projects both under the temporary tax relief and prior to that relief.

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