Equinor ASA is boosting natural gas exports to ease Europe’s supply crunch, sacrificing some oil production in the process.
The Norwegian giant has halted the re-injection of gas that had been used to boost oil output at the Gina Krog field, and will export the fuel instead, Equinor Chief Executive Officer Anders Opedal said in a Bloomberg TV interview on Wednesday.
In addition, the company is ramping up gas production at other fields, including the giant Troll. “We have turned every valve to see if we can produce and export more gas,” Opedal told a press conference the same day. “For Equinor, it is important to be a stable and secure supplier of gas to Europe.”
The move at Gina Krog, which Opedal called an “extraordinary” and a temporary measure, will provide an extra 8 million cubic meters a day of gas. It will possibly mean “a little” reduction in oil volumes, but “in terms of value we utilize the reserves in the best possible way,” he said.
While this is a relatively small addition to Norway’s total gas supply, which currently exceeds 320 million cubic meters a day, every molecule of the fuel will count in Europe this winter. The continent’s gas inventories are at their lowest seasonal level in at least a decade. Flows from its biggest supplier, Russia, are capped and competition with Asia for liquefied natural gas cargoes is intense.
Opedal declined to comment if other oil fields may see similar changes in the near term, adding that the company is considering different options but not with “major consequences for oil production.”
Both gas and oil prices will stay high this winter, assuming average weather conditions, Opedal said. The start of Russia’s controversial Nord Stream 2 pipeline, which is considered a crucial way for Europe to top up its gas imports, is still “one of the uncertainties” for the market, he said. “So far, we haven’t seen much more gas coming from Russia.”
Oil demand is coming back to pre-pandemic levels, with consumption getting an extra boost as consumers switch to oil as an alternative to expensive gas, Opedal said.