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Europe Bought Record Amounts of Norway's Offshore Gas in 2022

Gassco
Gassco's sprawling Nyhamna gas processing and export plant (Gassco)

Published Jan 24, 2023 6:45 PM by The Maritime Executive

The war in Ukraine has created a windfall for Norway's offshore oil and gas producers, with sharply higher prices and record-setting demand for Norwegian gas. According to state subsea pipeline operator Gassco, European customers' urgent need to replace Russian energy created an "all-time high demand for Norwegian natural gas" in 2022. 

Over the span of the past year, Gassco exported 117 billion cubic meters of gas through pipelines to Europe, making Norway the continent's biggest supplier - a role previously held by Russia. 

"We usually deliver less gas during the summer months than in winter, but last year’s exports were at a near-winter level all the year through," said Gassco CEO Frode Leversund in a statement. "The war in Ukraine has led to an increase in the demand for stable and reliable deliveries of natural gas, and the production of Norwegian gas is vital for meeting Europe’s energy needs."

Germany was the top buyer, taking 55 billion cubic meters of gas, followed by the UK, which bought 28 billion cubic meters. Both were up about 11 percent year-on-year, and Gassco's dashboard shows that pipeline flows to Germany still remain maxed out. "The rise in natural gas supplies from Norway throughout last year has contributed significantly to ease the pressure on Germany’s energy market," said Leversund. 

Norway and Germany have also agreed to explore the construction of a dedicated hydrogen gas pipeline from Norway's western coast to an area near Bremerhaven. The deal also includes a plan to build three gigawatts of hydrogen-compatible gas powerplant capacity in Germany by 2030. 

Norwegian gas also has new market share in Poland, thanks to the newly-opened Baltic Pipe, which ties the two nations' gas grids together via terrestrial and subsea pipelines. The link reduces Poland's need for Russian gas, and in the long run will allow it to burn less coal for electrical power.

The high level of export demand has kept producers busy on the Norwegian continental shelf, according to Gassco, and drilling activity levels were high during 2022. A fiscal relief package enacted by the Norwegian government in 2021 helped to boost operations as well. "This has enabled the European market to expect stable and secure deliveries of Norwegian gas for the foreseeable future," predicted Gassco.