Since 1997, Denmark has been self-sufficient in energy production, guaranteed by its offshore oil and gas platforms in the North Sea. However the International Energy Agency (IEA) predicts that Danish gas production will fall by 1.3% per year, before picking up in 2015.
“We have mature fields in the North Sea, but there is an increase in the production forecast from around 2015 which is caused by new fields coming into production,” Jan Harley Andersen, energy resource analyst at the government department for energy, ENS, told Interfax.
Still, the country’s status as a net exporter is not expected to last. According to a recent ENS report, Denmark will become a net importer of gas by 2021.
Denmark already has a near net import status as it is the only supplier of natural gas to neighbouring Sweden. “In reality, from a supply situation, the Danish and Swedish markets are one market,” Kurt Bligaard Pedersen, executive vice president at the country’s main energy suppliers, state-controlled DONG Energy, told Interfax.
Last year, Denmark supplied 100%, or 1.6 billion cubic metres, of Sweden’s consumption. “Looking at this combined demand, then we actually have some days where Denmark was a net importer already,” said Pedersen.
Denmark also exports gas to Germany and the Netherlands, estimated at 1.1 and 0.8 bcm respectively in 2010, according to the IEA.
Although domestic supply of gas is predicted to slowly dwindle, investment in renewable energy sources and the relocation of some Danish heavy industries abroad are two factors which can potentially reduce demand for gas.
At present, about 20% of the energy consumed in Denmark comes from gas. Domestic consumption accounts for about 5 bcm per annum, of which 2 bcm is for power generation, according to IEA figures. Total domestic production stood at around 8 bcm in 2010, down around 2.5% on the previous year but down 18% on 2008. “In the past we had no incentives to have a diversified portfolio of energy production because our resources were in our own backyard,” said Pedersen. That is now changing.
Although oil and coal still play a dominant role in energy production, wind power generation has grown steadily since 1980 and now accounts for almost 30% of electricity supply, according to ENS.
DONG operates only a handful of offshore fields, but counts on continued North Sea production as one of four pillars in its future gas supplies.ENS estimates that in the next few years, DKK 40 billion ($7.3 billion) of investments will be pumped into North Sea projects.
Danish gas production was last year valued at DKK 10.6 billion ($1.9 billion), according ENS figures. State revenue from this production was valued at about $4.3 billion. The second pillar for DONG in guaranteeing supply is the much publicised joint venture with E.On in Rotterdam, where a new 8 bcm capacity LNG terminal opened late September. Half of DONG’s capacity at the Gate Terminal is already booked by a 2010 supply contract signed with Spanish Iberdrola for 1 bcm annually over the next decade. At least some of the remaining capacity is likely to find its way to Denmark.
The third prong of DONG’s diversification strategy is to import gas from Germany, via a pipeline which was recently upgraded to allow imports.
DONG, Gazprom and BP also have a joint venture gas storage facility in Germany, near Bremen. Upstream projects in Norway and west of the Shetlands are also underway.
In 2010, DONG Energy and Statoil, together with the operator Eni, decided to development the Marulk gas field. Marulk is expected to begin production in 2012. The field is estimated to contain 71 million barrels of oil equivalent.
Denmark considers its options as resources dwindle
Avedore Power Plant, Denmark. Wind power generation accounts for 30% of electricity supply. (DONG)
“We have mature fields in the North Sea, but there is an increase in the production forecast from around 2015 which is caused by new fields coming into production,” Jan Harley Andersen, energy resource analyst at the government department for energy, ENS, told Interfax.
Still, the country’s status as a net exporter is not expected to last. According to a recent ENS report, Denmark will become a net importer of gas by 2021.
Denmark already has a near net import status as it is the only supplier of natural gas to neighbouring Sweden. “In reality, from a supply situation, the Danish and Swedish markets are one market,” Kurt Bligaard Pedersen, executive vice president at the country’s main energy suppliers, state-controlled DONG Energy, told Interfax.
Last year, Denmark supplied 100%, or 1.6 billion cubic metres, of Sweden’s consumption. “Looking at this combined demand, then we actually have some days where Denmark was a net importer already,” said Pedersen.
Denmark also exports gas to Germany and the Netherlands, estimated at 1.1 and 0.8 bcm respectively in 2010, according to the IEA.
Although domestic supply of gas is predicted to slowly dwindle, investment in renewable energy sources and the relocation of some Danish heavy industries abroad are two factors which can potentially reduce demand for gas.
At present, about 20% of the energy consumed in Denmark comes from gas. Domestic consumption accounts for about 5 bcm per annum, of which 2 bcm is for power generation, according to IEA figures. Total domestic production stood at around 8 bcm in 2010, down around 2.5% on the previous year but down 18% on 2008. “In the past we had no incentives to have a diversified portfolio of energy production because our resources were in our own backyard,” said Pedersen. That is now changing.
Although oil and coal still play a dominant role in energy production, wind power generation has grown steadily since 1980 and now accounts for almost 30% of electricity supply, according to ENS.
DONG operates only a handful of offshore fields, but counts on continued North Sea production as one of four pillars in its future gas supplies.ENS estimates that in the next few years, DKK 40 billion ($7.3 billion) of investments will be pumped into North Sea projects.
Danish gas production was last year valued at DKK 10.6 billion ($1.9 billion), according ENS figures. State revenue from this production was valued at about $4.3 billion. The second pillar for DONG in guaranteeing supply is the much publicised joint venture with E.On in Rotterdam, where a new 8 bcm capacity LNG terminal opened late September. Half of DONG’s capacity at the Gate Terminal is already booked by a 2010 supply contract signed with Spanish Iberdrola for 1 bcm annually over the next decade. At least some of the remaining capacity is likely to find its way to Denmark.
The third prong of DONG’s diversification strategy is to import gas from Germany, via a pipeline which was recently upgraded to allow imports.
DONG, Gazprom and BP also have a joint venture gas storage facility in Germany, near Bremen. Upstream projects in Norway and west of the Shetlands are also underway.
In 2010, DONG Energy and Statoil, together with the operator Eni, decided to development the Marulk gas field. Marulk is expected to begin production in 2012. The field is estimated to contain 71 million barrels of oil equivalent.