Economic value creation
Economic value creation
By economic value creation we mean adding measurable financial value to society and our operations. We create this value through and during the execution of our natural gas infrastructure core tasks. Market parties contract capacity in our gas networks and use our services like gas storage, contract trading and certification. While managing our infrastructure, financial value is created for suppliers, financiers and our shareholder. In addition, the company is worth more because we invest responsibly and carry out maintenance, minimise costs and risks, improve our business processes and accumulate knowledge.
Figures for GTS/GUD/participating interests
GTS transported 377 TWh of natural gas in the first half of 2023, which is 3% less than the 389 TWh transported in the first half of 2022. This is also the lowest volume GTS has ever transported over the first six months of a year. The high level of West-to-East transport of high-calorific gas (H-gas), first observed in early 2022, has continued. Previously gas flows in Europe mainly ran from East to West, with the Netherlands importing gas from the UK and Belgium and exporting this to Germany. Entry (i.e. gas fed into the GTS network) from LNG tankers reached record highs, increasing by an additional 54%. This was partly thanks to the new EemsEnergyTerminal.
The volume of G-gas supplied to industry, power stations and regional DSOs in the Netherlands decreased by 32%, 4% and 11%, respectively, compared to the first half of 2022. With the impending closure of the Groningen field and, with this, the dwindling of export contracts, the supply of G-gas to Belgium and Germany has seen a drastic decline, down 17% and 30%, respectively.
In the first half of the year, 2.6 bcm of G-gas (-38%) and 2.0 bcm of H-gas (-31%) were delivered to storage facilities and caverns connected to the GTS network (both Dutch and German). These lower volumes are due to the gas reserves in the facilities being much smaller at the end of the winter of 2022 compared to the end of the winter of 2023. The H-gas leaving the GTS network for destinations abroad (‘exit’) increased considerably, by +94%, which is entirely attributable to Germany. H-gas exits to Belgium and the UK, on the other hand, fell sharply.
In the first half of 2023, GTS blended 152 TWh of high-calorific gas (H-gas) with nitrogen to produce low-calorific Groningen-quality gas (pseudo G-gas). This is 20% less than in the first half-year of 2022 (190 TWh) and is due to decreased demand for pseudo-G gas. The amount of nitrogen used for conversion decreased from 2.0 bcm to 1.6 bcm.
In the period from January to the end of May 2023, market parties traded a total of 19,123 TWh of gas on the TTF, an increase of more than 3% above the 18,487 TWh traded during the same period in 2022. Gasunie’s TTF natural gas exchange continued to be Europe’s largest hub by far. In May 2023, 163 market parties were active on the TTF, the same number as in May 2022.
GUD figures
Over the first six months of the year, GUD transported 139 TWh of natural gas, down 24% on the 184 TWh transported over the first half of 2022. The decrease in volume can be attributed to a 40 TWh drop in the supply from Norway and the total collapse of Russian gas imports (29 TWh). The remainder of the change comes from an 11 TWh increase in supply from the Netherlands and changes in the direction of the flow of natural gas across the entire THE market area.
GUD has been receiving a large volume of requests for new connections from parties wanting to ensure security of supply, including for the connection of (leased) Floating Storage Regasification Units (FSRUs) needed to offset the loss of Russian gas.
EemsEnergyTerminal
In April, Gasunie and Vopak concluded an agreement in principle, under which Vopak will acquire 50% of the shares in EemsEnergyTerminal. If the transaction is approved by the competition authorities, the agreement will be finalised by no later than October. The partners are investigating whether the annual capacity of 8 bcm can be expanded further. Vopak and Gasunie want to eventually use the site at the port of Eemshaven for the import of green hydrogen.
Gate terminal
Vopak and Gasunie are the co-founders/co-owners of Gate terminal in Rotterdam, which has been operating since 2011. The terminal currently has a capacity of 16 bcm of natural gas per year. BP and PetroChina have committed to booking an additional 4 bcm (in total) of natural gas capacity per year. A fourth tank is being developed to handle this additional capacity and should be operational by the end of 2026. The target is to take the final investment decision in September.
Looking into an extra terminal at Terneuzen
Since Russia’s invasion of Ukraine, Gasunie has been alert to opportunities to increase LNG imports to the Netherlands. In this context, together with Vopak, we studied the feasibility of installing a Floating Storage Regasification Unit (FSRU) for the regasification of LNG at the Port of Terneuzen on a temporary basis. As this turned out not to be feasible from a technical and commercial standpoint, the project was terminated.
LNG terminals in Germany
GUD has decided to go ahead with the construction of two connecting pipelines (3 and 55km) for an FSRU installed in Brunsbüttel on a temporary basis. GUD may include the costs of the investment in its network tariffs. Together with KfW and RWE, Gasunie is developing its own permanent LNG import terminal in Brunsbüttel, which will be made suitable for the import of hydrogen in the more distant future.
GTS tariff decision
Based on the tariff decision published by ACM at the end of May, the average transport tariff GTS may charge its customers in 2024 will decrease by around 20% compared to 2023. Given the minor share of the GTS transport costs in the total energy bill, this cut in GTS’ tariffs will only have a limited impact on the customer’s gas bill.
Tribunal ruling
At the beginning of July, in a long-running court case the Dutch Trade and Industry Appeals Tribunal ruled on the methodology decision for GTS for the current regulatory period (2022-2026). This is a very significant ruling for GTS, and for Gasunie as a whole. With this ruling, it has become clear that requirements with regard to transparency and explainability of a regulatory methodology apply to both GTS and the regulator ACM.
As a result of the ruling, it is expected that GTS will be in a better position to cover its costs in the coming years. The ruling also has a positive impact for the longer term, given that the Tribunal has attached a number of new conditions to the regulation of GTS that will improve its position, as well as that of other, future network operators under Gasunie, such as those for heat and hydrogen.
