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June 24, 2022

Norway to increase gas supply to EU as Russia deepens cuts

The agreement is expected to bring gas deliveries of approximately 100TWh to the European market this year.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict

The European Union (EU) has agreed to source more gas from Norway, which will strengthen their energy cooperation as Russia further reduced its gas flow to the bloc.

Nearly half the countries in the EU’s 27 nations are facing gas cuts from Russia, which was hit with EU sanctions in the wake of its invasion of Ukraine.

The EU and Norway have now agreed to launch a cooperation to ensure additional short-term and long-term gas supplies to the bloc to help offset the surging energy prices.

Under the long-term cooperation, the parties will also focus on offshore renewable energy, hydrogen, carbon capture and storage, and energy research and development.

Norway is said to be the biggest gas producer in western Europe.

Norwegian Minister of Petroleum and Energy Terje Aasland said: “The EU and Norway has a common interest in developing the petroleum sector, making Norway a large exporter of oil and gas also after 2030.”

The agreement is expected to bring gas deliveries of approximately 100 terrawatt hours (TWh) to the European market this year.

Last week, Russia’s energy giant Gazprom said it would further reduce the gas supply capacity through the Nord Stream 1 pipeline to 67 million cubic metres per day, citing technical problems at a compression station, reported

The latest gas supply cut by Russia to Europe is also pushing Germany to initiate Phase II of its three-stage emergency gas plan, reported Reuters.

The second phase indicates a high risk of long-term gas supply shortages.

Under the Phase II plan, the German government will provide a €15bn ($15.8bn) credit line to fill storage facilities and launch a gas auction model to encourage industrial consumers to save gas.

Since March 2022, Germany has been under Phase 1 of its emergency plan due to gas shortages.

Amid the EU’s efforts to seek gas alternatives and reduce its Russian supply, Algeria, Niger, and Nigeria are considering reviving the decades-old, 4,128m-long Trans-Saharan gas pipeline project.

The project will start in Nigeria and end in Algeria. The pipeline will then be connected to existing pipelines that run to Europe.

The gas pipeline is estimated to cost $13bn and will have the capacity to send up to 30 billion cubic metres a year of gas to Europe.

The Niger Oil Ministry stated that a task force has been set up by the three countries for the project.

These countries initially signed an agreement in 2009 for the project, which was first proposed over 40 years ago, but progress was delayed.

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