Norway to help EU rein in gas prices

Belgium, (Brussels Morning Newspaper) Norway announced on Thursday that it is willing to help the EU to rein in rising prices of natural gas, stressing that high prices are not in its interest.

Gas prices in the EU are soaring, driving up inflation, jeopardising energy companies and threatening recession, according to Reuters reporting on Thursday.

Speaking after a meeting with gas companies to discuss how to rein in gas prices, Prime Minister of Norway Jonas Gahr Støre stressed “it is not in Norway’s interest that we have these extraordinary gas price spikes.”

Norway became the EU’s main supplier of piped gas after Russia cut supplies and blamed technical problems caused by sanctions imposed by Western countries.

According to forecasts in May, Norway is to produce roughly 122 billion cubic metres of natural gas this year, presenting an increase of 8% on the annual level, as fossil fuel companies up their production to meet demand and plug holes left by lower supplies from Russia.

Støre pointed out that prices could be brought down through long-term supply contracts, noting that energy companies announced their willingness to close such agreements.

Energy sector in jeopardy

Øyvind Eriksen, CEO of Aker BP oil and gas company, pointed out “at today’s price level, it’s too big a risk to take for most private players.”

“So it’s partly a question of pricing mechanisms and partly how states and companies can work together to solve this very serious situation,” he noted and expressed belief that a solution will be found.

However, he stressed that it was “too early to say what kind.”

Equinor, Norway’s largest producer of natural gas, described the meeting as useful and stressed the importance of discussing the EU’s energy crisis with the government.

The company pointed out that it sold roughly 50% of its gas through bilateral contracts and the remainder on the spot market.

Compared to 2021, price of natural gas in the EU increased approximately tenfold, boosting producers’ revenues and jeopardising energy companies.

The EU is looking for a way to lower gas prices, with energy ministers to discuss plans at an emergency summit at the end of the month.