Article | Last updated: 2016-02-29 | Ministry of Petroleum and Energy
Norway is the third largest gas exporter in the world. Nearly all Norwegian gas is sold on the European market.
A well-developed and efficient gas infrastructure and short transport distances make Norwegian gas competitive in the European market. Gas production has increased in recent years, and therefore accounts for a larger share of petroleum production than before. Norwegian gas is exported to all the major consumer countries in Western Europe and is important for Europe's energy supply.
All licensees on the Norwegian Continental Shelf are responsible for selling their own gas. Like oil, gas is one of Norway’s most important export commodities. Domestic consumption of gas in Norway is low, and nearly all the gas produced is exported. An extensive network of subsea pipelines links Norway’s offshore gas fields and onshore terminals directly to other recipient countries in Europe. In addition, liquefied natural gas (LNG) is shipped out from the Snøhvit field off Hammerfest on LNG carriers.
The export value of crude oil and natural gas in 2015 was about NOK 450 billion, or approximately 39 % of the total value of Norway’s exports. Norway exported more gas in 2015 than ever before, 114 billion standard cubic metres (Sm3) in all. Gas accounted for the largest proportion of total export value for petroleum.
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 % of total gas consumption
Major investments in transport solutions are characteristic of gas production.The total length of the Norwegian gas pipeline network is about 8 300 kilometres, which is roughly the distance from Oslo to Houston. Treaties have been drawn up that govern rights and obligations between Norway and countries with landing points for gas from the Norwegian shelf.
Gassco AS was established in 2001, and is wholly owned by the State. Gassco is a neutral and independent operator of the gas transport system and has both special and normal operatorship. The special operatorship is regulated through the Petroleum Act and regulations, and includes tasks such as developing new infrastructure, managing the gas transport system's capacity and coordinating and managing the gas streams through the pipeline network and to the markets. Normal operatorship means carrying out facility management in pursuance of the Petroleum Act and the health, safety and environment (HSE) legislation. This activity is also regulated in the operator agreement with Gassled. Gassco's role as the neutral and independent operator of the gas transport system is important in order to ensure that all users are treated equally.
Gassco studies transport solutions, and advises the authorities. Gassco shall contribute to a comprehensive further development of Norwegian gas infrastructure. In instances where major developments are considered, this entails that other Norwegian gas beyond fields that trigger a gas transport need, must also be included in the assessments. Further development of the gas infrastructure must take place in a manner that is beneficial for the existing gas infrastructure.
Gassled is a joint venture that owns the majority of the gas infrastructure on the Norwegian Continental Shelf; pipelines, platforms, onshore process facilities and receiving terminals abroad. The infrastructure is used by anyone with a need to transport Norwegian gas. Gassled's activities are regulated by the Petroleum Regulations and tariffs for the individual services are stipulated by the Ministry of Petroleum and Energy. The company has no employees, and is organised through various committees with specific tasks.
Regulated access to the transport system
The pipeline system is a natural monopoly, with significant infrastructure investments. This is why access to and tariffs for use of capacity are regulated by the authorities. In an effort to promote sound resource management, the tariffs are set such that returns from oil and gas production are derived from the fields, while at the same time providing reasonable return on investment for the infrastructure owners. The oil companies have access to capacity in the system based on the need for gas transport. To ensure good resource management, transport rights can be transferred between users when capacity needs change.
Joint ownership of the transport system ensures that the gas is transported as efficiently as possible and generates the greatest value creation, in part by avoiding conflicts of interest regarding which pipeline the gas will be transported through. Gassco also ensures efficient transport of gas in day-to-day operation of the facilities, as part of the special operator responsibility.
In much of Europe, gas is an important source of energy for heating homes and industrial buildings, and is used in gas-fired power plants to generate electricity. Norwegian gas covers more than 20 % of European gas consumption and makes an important contribution to energy security in Europe.
Norway is an important supplier of oil and gas to the global market, and almost all oil and gas produced on the Norwegian shelf is exported. Company and government revenues from sales of oil and gas have played a crucial role in creating modern Norwegian society.
For more information on Norwegian gas, visit norwegianpetroleum.no