A New Natural Gas Pipeline In The Barents Sea Could Cut Europe's Reliance On LNG - OilPrice.com
A possible new pipeline from the Barents Sea to carry natural gas from Norway’s Arctic gas platforms to Europe could ease the continent’s dependence on LNG imports, Wood Mackenzie said in a new report this week. Norway has become the single biggest supplier of natural gas to Europe after Russia cut off most pipeline deliveries last year following the invasion of Ukraine. But the only route for the natural gas produced in the Barents Sea to markets is via Equinor’s LNG export facility at Hammerfest. There are no direct links from the Barents Sea to the main Norwegian gas pipeline network. Considering the importance of gas supply to Europe, the Norwegian Ministry of Petroleum and Energy asked in March gas infrastructure operator Gassco to study options for bringing more Barents Sea gas to markets. In the analysis, Gassco has considered various technical solutions to increase gas export capacity from the Barents Sea, including by an increase of the export capacity at Hammerfest LNG, exports of blue ammonia, and a new gas plant and pipeline down to the Norwegian Sea for further transport through the existing gas pipeline network. A pipeline from the Barents Sea appears to be the most profitable for society among the three options, Gassco said. Raising export capacity would be crucial to more gas exploration and development in the Barents Sea, the sea offshore Norway with the highest potential to hold undiscovered gas resources, Petroleum and Energy Minister Terje Aasland said in April, commenting on Gassco’s findings. According to WoodMac, the proposed $5 billion export route will have to happen with government support. “The carbon and socioeconomic argument for a pipeline – and further development of the basin – is strong, but it won’t happen without government support,” said Daniel Rogers, Senior Analyst at Wood Mackenzie. ADVERTISEMENT State funding of the pipeline, or the introduction of a Carbon Border Adjustment Mechanism by the EU to encourage cleaner industrial production in non-EU countries on gas imports to Europe, would increase cost competitiveness for the pipeline project, according to WoodMac’s report. By Charles Kennedy for Oilprice.com More Top Reads From Oilprice.com: Join the discussion| Back to homepage ADVERTISEMENT
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