An Alternative to Russia
October 29, 2006
In the past six years, Norway has practically doubled its annual gas exports to 90 billion cubic meters (3,178.3 billion cubic feet), making it the second biggest supplier to the European Union with a 16 percent market share.
Earlier this month the world's longest underwater gas pipeline was opened, linking Norway and Britain. The gas pumped through the Langeled pipeline will cover up to 20 percent of Britain's needs in coming years. The Scandinavian country already supplies 30 percent of France's needs and 25 percent of Germany's.
"Due to the fact that consumption of gas is increasing in Europe ... there is a clear increased interest for Norwegian supply of gas and therefore we're increasing our production and exports," Norwegian Oil and Energy Minister Odd Roger Enoksen told AFP.
EU change of heart
From 50 billion cubic meters in 2000, exports are expected to swell to 130 billion cubic meters in 2010.
The rise is warmly welcomed by European countries keen to ensure secure energy supplies and diversify their suppliers beyond Russia, which meets 25 percent of Europe's gas needs.
A "gas war" between Moscow and Kiev in the dead of winter a year ago illustrated Europe's vulnerability: Russia turned off the taps to Ukraine after a dispute over prices, leading to knock-on disruption of supplies across Europe.
"Norway has been an important actor in the gas sector for a long time and will remain so. But it is Brussels' perception of Norway that has changed," said an analyst at Enskilda Securities, Arnstein Wigestrand.
The EU previously objected to Norway's practice of signing long-term supply agreements, urging suppliers and clients on the continent to review the terms of their contracts to ensure smoother gas supplies to the market, he recalled.
"But now the EU has changed its stance. In Brussels, they must be rubbing their hands in glee for each cubic meter that the Norwegians are delivering," the analyst said.
No Russian-Norwegian competition, oil minister says
Russia recently signed a memorandum of understanding on gas cooperation with Algeria, the EU's third biggest supplier with an 11 percent market share, raising fears of a possible gas cartel. The possibility of an "OPEC for gas" appears very hypothetical, but Norway has already ruled out participating in such a group.
"For a large quantity of our production we have long-term contracts, and we are part of the European Economic Area agreement and we have liberalized and opened up our gas supply completely, so we have no intention of going in that direction," Enoksen said.
He insists that Norway and Russia are not in competition to supply gas to Europe.
"We are dependent on each other to be able to supply the European market as well as possible," he added. "Russia will be as well a secure and very big supplier of gas in the future ... Otherwise, if you don't do what's needed to have a secure supply of gas, the consuming countries can change from gas to other energy sources," he said.
With the Langeled pipeline just freshly in place, Norway is already looking to build a new gas pipeline to Europe to add to the 7,800 kilometers (4,850 miles) already laid down or under construction.
The new pipeline would feed gas to Belgium, the Netherlands or once again Britain.