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Gazprom, Taqa Sign Deal on Dutch Gas Storage Field

Gazprom, Russia’s gas export monopoly, will deliver cushion gas for injection into the depleted field in return for working capacity and a participating interest in operating the facility, the companies said in a joint statement today. Cushion gas is necessary to ensure that the reservoir has optimal pressure to start commercial storage operations. Bergermeer has a storage capacity equivalent to the annual gas consumption of about 1.6 million households in the Netherlands, making it one of western Europe’s largest.

The estimated working volume amounts to about 4.1 billion cubic meters and commercial operations are expected to start in 2013. Bergermeer is Taqa’s second gas storage project in the Netherlands. It already operates the 500 million cubic meter Peak Gas Installation in Alkmaar.

The Netherlands aims to become a distribution point for gas in northwest Europe and plans to import liquefied natural gas to guarantee energy supplies as its own reserves dwindle. It’s also strengthening ties with energy-producing nations such as Russia, Kazakhstan, Algeria and Saudi Arabia.

Cushion Gas

The amount of cushion gas could amount to about 4.3 billion cubic meters, Alexander Medvedev, Gazprom’s deputy chief executive officer, said at a press conference in Amsterdam.

“The volume of cushion gas will be close to the storage capacity,” Medvedev said. Bergermeer, about 27 miles north of Amsterdam, is an empty gas reservoir consisting of porous rock 2 kilometres (1.2 miles) below the surface. Gas is injected into the tiny openings, the rock pores, via wells about 2.5 kilometres deep. In the winter the gas is brought back up again and distributed by energy companies. The underground facility will store gas during the summer so that it can be used during the winter when demand picks up. The Netherlands has existing gas storage locations in Norg, Grijpskerk and Alkmaar. Taqa and Gazprom plan to invest 600 million euros ($854 million) in the project, Taqa Chief Executive Officer Peter Barker-Homek said in March. A final investment decision of the parties involved is expected in the coming months, according to Friday’s statement. “The announcement is a significant step forward for the project,” Paul van Gelder, managing director at Taqa Energy, said in the statement.

“The commitment of the existing partners and the expertise of Gazprom, in its role as strategic participating customer, will ensure the success of this facility in securing Europe’s energy supplies for decades to come.”

Other partners in the project are SHV Holdings NV subsidiary Dyas BV, Suncor Energy Inc.’s Petro-Canada and Dutch government-owned energy management company Energie Beheer Nederland. “The Bergermeer Gas Storage, given its technical parameters and geographical location, will secure the stability of our supplies not only for the sake of our current contracts, but also for the implementation of our new contracts, intended to provide gas through the Nord Stream pipeline which is now being put together,” Medvedev said in the statement.

Nord Stream, a planned 1,200-kilometre gas pipeline through the Baltic Sea connecting Russia with Germany, is due to start deliveries to Europe in 2011. The 7.4 billion-euro Gazprom-led project still needs environmental permits from coastal states.

Brent Oil System

Taqa earlier this month took over as operator of the North Sea Brent oil system, responsible for about 8 per cent of U.K. offshore crude production, from Royal Dutch Shell Plc.

It also bought a stake in North Sea natural-gas assets from the L11b Group and is the operator of a production platform that will start output before the end of the year.

Last month, it bought the energy business of Netherlands- based Royal DSM NV for an enterprise value of 285 million euros. —