GasTerra’s revenue falls again

PRESS RELEASE

Gas market continues to grow

GasTerra’s revenue falls again due to low gas prices and declining volumes

Groningen, 19 February 2021 – Gas trader GasTerra has seen its revenue fall again in 2020. The company’s sales were still as high as 8.8 billion euros in 2019 but last year they stalled at 5.5 billion euros. Traded volume fell by almost 10 billion cubic metres to 41.6 billion cubic metres. Production from the Groningen field for gas year 2019-2020 (1 October-30 September) dropped to a little over 8.6 billion cubic metres. Nevertheless, total gas demand increased again.

In its annual report published today, GasTerra explains that the lower revenues arise from diminished gas supplies from Groningen and the small fields, average high temperatures and low gas prices. The summer period in particular showed a steeper price drop than in previous years. Measured across the whole of 2020, the average gas price came out at 13 cents per cubic metre; 25% less than in 2019.

Although these figures might suggest otherwise, the volume of natural gas physically used in the Netherlands has not fallen. According to a preliminary analysis, consumers purchased a total of 39.5 billion cubic metres last year; that is 1.2 billion more than in 2019. The picture is even clearer over a five-year period. Between 2015 and 2020, annual physical volume increased by a total of 5.2 billion cubic metres, an increase mainly attributable to the ever-increasing use of gas-fired power plants. It is clear that GasTerra cannot benefit from this development in terms of sales or volume. A significant proportion of the company’s trading portfolio consists of domestic gas from Groningen and the Dutch small fields, but these volumes are greatly declining. The market is compensating for this decline with additional gas imports.

In September 2019, the Minister for Economic Affairs and Climate Policy set gas extraction from the Groningen field at 11.8 billion cubic metres for gas year 2019-2020. This decision is binding but the Minister can adjust the volume if the forecast turns out to be unrealistic during the gas year. This happened in March 2020 when the availability of more nitrogen capacity and expansion of the working gas volume in gas storage facility Norg meant that the level could be reduced to 10.7 billion cubic metres. Ultimately the production level for the gas year ended up being even lower at a little over 8.6 billion cubic metres due to warmer than average temperatures.

In 2019 GasTerra announced that the company would cease to exist in its present form. During 2020 a plan was set up to achieve this; the plan sets out a step-by-step process for completing the phase-out by 31 December 2024. This and next year everything will stay more or less the same. GasTerra will not conclude any more contracts for gas supplies after 2023.

The phase-out will involve unprecedented challenges, both for the organisation and the staff. GasTerra’s employees all know that their jobs will come to an end at any time between now and the final date. The redundancy scheme set up for them therefore provides support for finding new employment in addition to a severance package. In 2020, 23 employees took advantage of this and left the company. Some took early retirement, but most left GasTerra for a job with a new employer. This reduction is expected to continue in the coming years. The organisation is making every effort to manage this staff turnover in-house as far as possible. Where that is not possible, staff will be recruited externally so that we can continue to perform the tasks still required.

The coronavirus crisis has not had a noticeable impact on GasTerra’s business processes. Apart from the dispatchers, most of our staff can work effectively from home. Since the first lockdown the office has only been open for specific activities, which was also the case over the summer when national measures were temporarily relaxed. The organisation monitors the social and psychological consequences of lockdown as well as it can; it seeks customised solutions where necessary and possible.

GasTerra is primarily a trading company but, since its formation in 2005, the company has also done a lot of work on projects and programmes that help to promote the energy transition. The purchasing of green gas is one of the core activities in this area, but at the same time GasTerra also supports research and initiatives that can accelerate a responsible transition to a sustainable energy supply. Gas will continue to be an essential energy carrier in that transition process for decades to come, which is why GasTerra published a brochure during its financial year, Gas in the Dutch energy system (Dutch only), which examines this fact from all angles. In this connection, the potential for and opportunities with hydrogen have been spoken about and written about a lot recently. Rightly so, according to GasTerra, but at the same time we must not neglect the role of bio-methane / green gas. Compared to other renewable energy carriers, the volume of green gas produced is already considerable and will only keep growing in the years to come; innovative technologies will also have a part to play.

Following publication of the annual figures, GasTerra CEO Annie Krist expressed her satisfaction with the results achieved. “GasTerra will continue working as it has always done, to carry out its duties to the highest standard. Our mission was and is to add as much value as possible to the gas we buy. We have managed to do this again very successfully in 2020, despite difficult circumstances, and I would like to congratulate my colleagues for their achievements.”

GasTerra’s annual report is published on our website in Dutch and English (https://jaarverslag2020.gasterra.nl). It is also available as a PDF file.
 

Information for editors:

For any further information or explanations, journalists can contact Anton Buijs, spokesperson for GasTerra:
+31 6 533 899 43 or anton.buijs@gasterra.nl.