Royal Dutch Shell plc .com Rotating Header Image

The future of natural gas production in Groningen

Screen Shot 2013-10-01 at 07.56.54Screen Shot 2013-12-27 at 10.25.22

Shell’s NAM joint venture with ExxonMobil submits a revised production plan for the Groningen gas field in the Netherlands, after a 2012 earthquake in the nearby village of Huizinge. In August 2012, an earthquake with a magnitude of 3.6 on the Richter scale occurred in the village of Huizinge in the province of Groningen in the Netherlands. The local population experienced the event as prolonged and intense. The earthquake was the start of a series of developments that will culminate in a decision by the Netherlands’ Minister of Economic Affairs in early 2014 regarding a new plan for the production of gas in Groningen.

Posted 27 December 2013

Shell’s NAM joint venture with ExxonMobil submits a revised production plan for the Groningen gas field in the Netherlands, after a 2012 earthquake in the nearby village of Huizinge.

In August 2012, an earthquake with a magnitude of 3.6 on the Richter scale occurred in the village of Huizinge in the province of Groningen in the Netherlands. The local population experienced the event as prolonged and intense.

The earthquake was the start of a series of developments that will culminate in a decision by the Netherlands’ Minister of Economic Affairs in early 2014 regarding a new plan for the production of gas in Groningen.

Nederlandse Aardolie Maatschappij (NAM, a 50/50 joint venture between Shell and ExxonMobil) has produced natural gas from the Groningen gas field since 1963. The field has about 300 wells across 20 production sites. NAM is the operator of the field; EBN holds a 40% share on behalf of the Dutch Government, while the remaining share is held equally by Shell and ExxonMobil.

The Netherlands’ meteorological office KNMI did not detect any earth tremors during the initial decades of production from the Groningen gas field. This changed at the beginning of the 1990s, when KNMI did detect (minor) tremors. In 1993, it concluded that there was a direct link with natural gas production.

Natural gas production may lead to tremors as the change in pressure through production leads to subsidence along the naturally occurring faults. The energy released as a result finds its way to the earth’s surface where it is observed as a tremor. In the case of the Groningen field, the hypocentre is relatively close to the surface at about three kilometres underground, where the gas is situated.

The level of concern in Huizinge and the number of damage reports prompted the Dutch Government to ask NAM in 2012 for their recommendations on to how mitigate the risk.

When NAM, KNMI and regulator SODM determined independently that the recent earthquakes raise questions about the hitherto assumed magnitude and frequency of the tremors over time, Minister Kamp (Economic Affairs) decided in January 2013 to commission 11 studies on the situation. He also requested NAM to submit a revised production plan for the Groningen gas field by December 1, 2013.

The objective of this revised production plan is to provide information about the desired production strategy and insight into the consequences for the surrounding area. Based on this plan, advice given by the regulator and the conclusions of the 11 studies, Minister Kamp will take a decision in January 2014 about the future natural gas production.

The issue has attracted significant media attention in recent months and this is likely to continue in the near future, possibly further increased by rumours and speculation about potential measures that will be taken. NAM is responding to media enquiries but, at the Minister’s request, they will not comment on the contents of its revised production plan at this stage. NAM has implemented numerous actions over the past twelve months to address the situation. These include:

  • In its studies, NAM focused primarily on gaining greater insight into the likelihood of the occurrence of higher intensity earthquakes, and identifying additional measures to prevent these and avoiding structural damage to buildings as a consequence of earthquakes.
  • Communications and the provision of information have been greatly intensified. For example, NAM and the Municipality of Loppersum have set up a permanent information desk in the town hall, NAM has held information evenings throughout the region, and an intensive dialogue is underway with various stakeholders.
  • A special website has been developed, a news sheet has been distributed door-to-door in the impacted area, and a public information campaign was launched in co-operation with the regional safety authority. A programme has been instigated to provide structural reinforcement for vulnerable houses, to help prevent unsafe situations. In collaboration with KNMI, the monitoring network will be expanded substantially to obtain insight in even greater detail.

The compensation allowance for damages (as a result of the tremors) has been substantially increased and broadened. NAM is in continuous engagement on this topic with local stakeholders and further improvements will follow. The organisation has received around 11,500 damage reports since August 2012.

Further information on this topic is available on www.namplatform.nl (in Dutch only).

RELATED: Groningen Exxon/Shell gas field earthquakes rumble on

Comments are closed.

%d bloggers like this: