Bergermeer Gas storage, a pig in a poke and a difficult to explain divestment?
TAQA bought all BP possessions, including the Bergermeer Gasstorage (BGS) in 2006 for € 533.000.000,- The Dutch national government holds through EBN, (100% government owned ‘Energie Beheer Nederland’), a 40% stake in TAQA beheer BV. 60% is now owned by Taqa after a recent buy out of other shareholders. TAQA actually plans gas storage in the field.
The Minister of Economic Affairs proclaimed the BGS project one of national interest. This gives her the power to overrule local governments. It is an unusual procedure in the Netherlands. We have actually never seen it before. TAQA has, ahead of regular permit procedures, signed contracts with Gazprom for the so called cushion gas (necessary to pressurize the field to the level of the surrounding main infrastructure) which TAQA is legally bound to take in.
The BGS field is seismically active . Therefore gas storage is protested against fierce fully by regional city councils and inhabitants. The region is among the most densely populated in the world. Not quite the same as a gas storage in the desert or under the North sea.
Local inhabitants worry about there safety and severely question the accountability and solvability of Taqa Beheer BV, the local Taqa subsidiairy. Especially in case of earthquakes and even, under the current market conditions, TAQA’s ability to fulfill the funding of the project is questionable.
The security of Dutch national energy supply, used by the Dutch government as an argument for gas storage is nonsense, the gas to be stored is high caloric gas and therefore unfit for household use. It is meant for industrial use in the UK.
Local city councils and pressure groups in the Alkmaar region have been asking the Dutch Minister of Economic Affairs several times, a forecast of possible revenue to understand if there might be an economic advantage for gas storage in the Netherlands, in other words what is the contribution to our GDP.
Drastic changes in the International Gasmarkets, with the US and Canada having become abundant in gas due to shale gas exploration, larger than expected conventional gas supplies in Europe, and a glut in LNG supply as a result. All this challenges the need and, not unimportant, the profitability of Taqa Gas storage in the Netherlands.
With the seismic disadvantages everybody in the industry now knows the field has, Taqa will not be able to sell the field to a third party.
We can only guess about the reasons why TAQA wants to get ahead with the project under current market conditions and apparent gas glut. Similar, less risky projects are called off by the big guys (Shell, Exxon, Gasunie) since they are unable to sell long term contracts for storage due to drastically changed market conditions. A pig in the poke and a difficult to explain divestment?