Cabinet wants private companies to pay more towards gas storage

The Dutch government wants to make private companies responsible for storing gas for the winter to cut its liabilities as prices on the markets soar.

At the moment the cost of filling the four gas storage facilities in Norg, Grijpskerk, Bergermeer and Alkmaar is met by the government-funded operator Energie Beheer Nederland, but soaring gas prices mean they are facing a €1 billion loss.

Private companies have no commercial incentive to stock up on gas for the winter because prices are currently forecast to drop after the autumn.

Demand has been stoked by the need for European governments to meet EU-set targets to fill their gas reserves by the start of November. The Netherlands last week reduced its target figure from 74% to 64%. The current storage level is 57.5%.

Under EU rules the Dutch government is also not allowed to keep the stored gas it buys for itself, but must export it to other member states who need it, as well as the UK, which has limited gas storage facilities.

The Netherlands’ facilities date from the time when it exported gas from the Slochteren field in Groningen, but since it was forced to end production two years ago because of earthquakes in the northern province it has filled the chambers with imported gas.

LNG imports

The high cost of importing liquefied national gas from the United States, which is the main supplier, have added to the government’s costs.

It wants to pass on the cost to commercial companies such as Essent, Eneco and Vattenfall by making it mandatory for them to build up their own reserves. A similar obligation is in force in Austria.

“At the moment there is virtually no market in the Netherlands for storing gas in the seasonal storage facilities, even though seasonal storage is an essential element of supply guarantee in the portfolio of suppliers’ prospectuses,” the letter, sent from the ministry of economic affairs, said.

“The question is whether the bill should continue to be met by the Dutch taxpayer, or whether supply guarantee can be be ensured through a different mix of measures for a lower cost.”