Strengthening Resource Management – New Gas Tariffs

The Ministry of Petroleum and Energy has today set new lower tariffs for future agreements on treatment and transport of gas for most of the Gassled transport system. The objective is to facilitate sound resource management on the Norwegian continental shelf.

“Lower tariffs in Gassled will promote more exploration, encourage development of more discoveries and support effective resource utilisation on existing fields. This is sound resource management in practice,” says Minister of Petroleum and Energy Ola Borten Moe.

 The decision to set new tariffs is a concrete follow-up of important resource management principles: That transport must be viewed as a means and not an objective, and that the profit from oil and gas resources must be extracted on the fields, not in the infrastructure. These are decisive principles for ensuring production of socio-economically profitable resources, while also providing a reasonable return for the owners.

 Tariffs for signed transport agreements will remain unchanged. Transport agreements have already been signed for large parts of Gassled’s capacity for many years to come, and will generate considerable revenues for the owners. The new tariffs will not have any impact on these revenues. The owners will, in addition, gain revenues from new transport agreements.

Based on an overall assessment, the lower tariffs will take effect from the 2016 gas year (1 October 2016). Setting the new tariffs now will allow the industry opportunity to make sound decisions.

“Lower gas transport costs will reinforce the competitiveness of Norwegian gas, while also ensuring a reasonable profit for Gassled’s owners,” says Ola Borten Moe.

A review of the decision and the Ministry’s assessments (unofficial translation) is available here.

Background:
The Ministry submitted a proposed amendment to ”Regulations of 20 December 2002 no. 1724 on stipulation of tariffs, etc. for certain facilities” (the Tariff Regulations) for consultation on 15 January 2013.

The decision has been amended as regards two items as compared with the proposal submitted for consultation. The new tariffs will apply for transport agreements signed after the regulations take effect for gas that is transported or treated from and including the 2016 gas year (1 October 2016). The Ministry has emphasised considerations such as the fact that the resource effects of lower tariffs will gain strength gradually, over time. The Ministry has decided to maintain the tariffs for two pipelines in the rich gas area, tariff areas G (Kvitebjørn gas pipeline) and H (Norne gas pipeline).

The new tariffs are stipulated by means of an amendment to the Tariff Regulations. The amendment to the Regulations will take effect on 1 July 2013.

The Gassled Joint Venture owns most of the Norwegian gas infrastructure. The participants in Gassled are:

Petoro AS	45.793%
Solveig Gas Norway AS	24.756%
Njord Gas Infrastructure AS	8.036%
Silex Gas Norway AS	6.102%
Infragas Norge AS	5.006%
Statoil Petroleum AS	5.000%
Norsea Gas AS	2.261%
ConocoPhillips Skandinavia AS	1.678%
DONG E&P Norge AS	0.983%
GDF SUEZ E&P Norge AS	0.304%
RWE Dea Norge AS	0.081%

Gassco is the operator of Gassled. More information about Gassco is available at www.gassco.no