EU Offers Norway Warm Words Not Pledges on Gas Investment

 

Norway and its energy company Statoil (STO) want help in developing potentially huge gas resources in the Barents Sea that could be sold either as liquefied natural gas (LNG) all over the world or shipped to Europe via pipelines.

 

"To ensure future expansion of our export pipeline system, we need clear signals it has a role in Europe's energy mix," Norway's Petroleum and Energy Minister Tord Lien said at talks in Brussels. "Uncertainty reduces the likelihood of these investments being made."

 

In a climate of cheap oil, energy firms have been shedding jobs and cutting spending, with the International Energy Agency predicting a second consecutive year of falling oil and gas investment.

 

Gas, as the least carbon intensive fossil fuel, is fundamental to displacing coal and curbing climate change, so a package of EU proposals to be published in Brussels on Wednesday should acknowledge that, Lien said.

 

The proposals concern shoring up security of supply, ensuring contracts agreed between national governments conform to EU law and a strategy for developing LNG.

 

European Climate and Energy Commissioner Miguel Arias Canete agreed gas was important and Norway a highly valued partner, especially compared with Russia, whose relations with Brussels have been soured by the conflict in Ukraine.

 

Asked about investment in the Barents Sea, Arias Canete said for big infrastructure there must be "a market case".

 

The European Commission has drawn up a list of 195 energy infrastructure projects known as Projects of Common Interest, which are judged strategic to more than one EU nation and entitled to some funding and accelerated planning permission.

 

The list includes electricity connections between Norway and the European Union, but no EU-Norway gas links.

 

Arias Canete said the assumption was EU demand would stay roughly stable at 380 to 450 billion cubic metres per year, of which Norway provides roughly one quarter.

 

However, consumption would shrink if the EU increases its energy efficiency.

 

Arias Canete has said he favours an energy savings target of around 30 percent compared with 20 percent for 2020 and a goal already agreed in outline of at least 27 percent for 2030.

 

Commission projections show a 30 percent increase in energy efficiency would cut gas demand by 24.5 percent.