Study shows that Dutch gas demand is barely covered by long-term contracts

13-11-2018

A very harsh winter may mean that not enough gas will be available or that prices will rise considerably.

These are the findings of an international study by IHS Markit that was commissioned by GasTerra. The international market research company considers it risky for the Netherlands to be entirely dependent on the open gas market as soon as the gas stops flowing from Groningen. IHS therefore recommends taking out long-term contracts so that some of the gas demand is covered. GasTerra believes that it is important to think about the future and recognises that this poses a challenge which it would like to make open to discussion. Non-regulation is an experimental approach.

A very harsh winter may mean that not enough gas will be available or that we will pay high prices.

- Anja Hulshof

Only minimal coverage of the gas demand

In her reaction to the report, Anja Hulshof, spokesperson for GasTerra, says that this is important for security of supply. Unless the Netherlands enters into more long-term contracts for gas imports, there is a risk, by 2023, that there will not be sufficient gas or that prices will rise if the winter is harsh. The study shows that less than 1% of Dutch gas demand is secured under long-term contracts in 2023. Neighbouring countries, on the other hand, have concluded long-term contracts to cover most or maybe even all of their gas demand.

From gas exporter to gas importer

'Because the Netherlands has always been an exporting country, we've never really given any thought to the policy to be pursued for importing gas and what sort of contracts would be appropriate for this. For that reason we asked IHS, as an independent market research company, to investigate how other gas-importing countries handle long-term contracts and what the Netherlands can learn from this. These results show that current Dutch gas import policy is fundamentally different.'

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