You Haven’t Seen Massive Till You’ve Seen This Map
Further to the second-last item above — it’s hard to understand the opportunity opening in European natgas unless we get a sense of the scale here.
Regulators in the Netherlands have cut gas output from the Groningen field by 16.5%. And in the case of a massive producer like Groningen, that’s a lot of supply.
The map below from the World Energy Atlas tells the story better than a thousand words could. Simply put, Groningen is a giant. At 100 trillion cubic feet of initial gas reserves, it dwarfs all other finds in Western Europe — and is the tenth-largest field in the world.
So even a modest percentage reduction in output here means a lot of lost supply.
That’s why imports into places like Bacton, U.K. have fallen off a cliff since the Groningen cuts were unveiled. And why prices are rising in a number of locales around the continent.
This comes as production in the North Sea in general is falling. And few other European supply options are emerging (just this month, Chevron announced it is pulling out of shale gas projects in Poland — after the geology here proved significantly more challenging than expected).
Obviously this gives a lift to potentially-rising LNG shipments into Europe. But what about options for increased production closer to home?
The nearest-at-hand possibility is the North Sea. Where regulators in the U.K. have been mulling a tax overhaul in order to spur more exploration and development.
Hungary may have some potential. And there are a few sleepers, like the North African nation of Tunisia — which can feed gas to Europe via the Trans-Mediterranean pipeline system.
Whatever the case, events this week are an important reminder: natgas is still very much alive as an opportunity, in the right places globally.
Here’s to a falling giant,
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