• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 12 hours PETROLEUM for humanity 
  • 13 hours Why don't the other GOP candidates get mention?
  • 1 hour China's Blueprint For Global Power
  • 12 hours Disenfranchised people are angry people - map of global electoral systems
  • 57 mins ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 2 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 11 hours Brexit agreement
  • 12 hours Bloomberg: shale slowing. Third wave of shale coming.
  • 1 hour Erdogan Holds All The Cards ... 3.6 Million Of Them
  • 18 hours Spain Is On The Edge...Clashes Between Catalonia And "Madrid"
  • 11 mins Idiotic Environmental Predictions
  • 20 hours Philadelphia Energy Solutions seeks to permanently shut oil refinery - sources
Alt Text

It’s “Feast-to-Famine” For The Global Gas Industry

Oversupply and high stockpiles have…

Alt Text

Is The U.S. Gas Boom Already Over?

As natural gas prices continue…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Norway Looks For Bigger Role In European Gas Markets

Norway’s oil and gas major Equinor—which provides around 25 percent of the European Union’s (EU) natural gas demand—aims to play a more active role in selling its natural gas on the European market and take advantage of spot market prices where profitable.

That’s the message which Equinor’s top management conveyed to the market and analysts regarding natural gas sales on the conference call on the Q2 financials this week.  

Most Norwegian gas sold on the European market is delivered to Germany, the UK, Belgium, and France, where Norwegian gas accounts for between 20 and 40 percent of total gas consumption.

Despite plans for more exposure to the spot market, Equinor saw in Q2 and will continue to see in Q3 benefits from forward sales of its gas, the managers said on the call.  

“We have sold and are benefiting then from the long-term gas sales as of this quarter,” Svein Skeie, Equinor’s Senior Vice President for Performance Management and Analysis, said.

Equinor sold its natural gas at US$5.49 per million British thermal units (MMBtu) in Q2, compared to an average price of US$4.09 for the UK National Balancing Point (NBP) benchmark price. Equinor’s gas price realizations will still be above the NBP price in Q3, Skeie said. 

According to Lars Christian Bacher, Equinor’s Executive Vice President and chief financial officer, “the shift that we’re doing is that we want to expose more to the spot market, and we see that we benefit from having entered into contract more on a season ahead than a year ahead, and both for this quarter and we expect the same to happen for third quarter and then gradually that will fade out.” Related: Is India Close To Launching Its Own Gigafactory?

“But the shifts to more to the spot market does not limit us. On the contrary, we would like to take a more active role in placing sort of our gas volumes in the market,” Bacher added.

In Q2, Equinor produced more gas than oil and liquids, but noted in its results release that “The liquids share of the production mix was low in the quarter and will increase going forward.”

The higher gas production in Q2 was mostly due to the start-up of the   Aasta Hansteen gas field, which contributed with around 60,000 barrels of oil equivalent per day (boepd), Equinor said. Aasta Hansteen gas is transported through the Polarled pipeline to the Nyhamna terminal for further export to the UK, while condensate produced at the field is loaded into tankers and transported to the market.

Even if overall production in Q2 was relatively stable on the year, Equinor’s financials were impacted by “lower prices, high turnaround activity and some quarter specific items,” the company said.

Equinor’s production mix will include more oil once the giant Johan Sverdrup oil field starts up in November.

“We expect the liquid share of the production mix to come up again over the next couple of quarters and even more so when Johan Sverdrup comes onstream during November,” Bacher said on the analyst call. Related: Oil Flat, Seesaws On Demand Fears

Eldar Sætre, Equinor’s president and chief executive, said that the company had further cut investment costs for Johan Sverdrup’s Phase 1 development by an additional US$346 million (3 billion Norwegian crowns), bringing total cost reductions to US$4.6 billion (40 billion crowns) since the development plan was submitted.

“With a planned start up later this year, and faster ramp up to reach plateau production during summer next year, the project will produce and create substantial value for decades to come,” Sætre said in the company’s statement.  

Commenting on Equinor’s Q2 performance, Bernstein analysts said that the lackluster financials were mostly because of short-term factors and stressed that the update on Johan Sverdrup was the more important takeaway.

“That’s where the story just got better today,” Oswald Clint at Bernstein told the Financial Times.

“Capex is reduced by a further $0.35bn on the project which is incredible with only three months to go and the ramp up is now 9 months versus 12 months previously,” Clint noted.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play