Norway seeks to help EU cope with gas price pain after Russia cuts

Surging European gas prices, up 250 per cent or more in the past year, have sharply boosted Norway's export revenues. PHOTO: REUTERS

OSLO - Norway said on Thursday that sky-high gas prices are not in its interest and it would work with the EU to steady the market, although Europe's biggest supplier of piped gas is already at capacity trying to fill a gap left by Russia.

The European Union is grappling with the impact of soaring gas prices that have driven up inflation, pushed some utilities to the brink and threatened recession, prompting urgent proposals by its executive to protect consumers and businesses.

"It is not in Norway's interest that we have these extraordinary gas price spikes," Prime Minister Jonas Gahr Stoere told reporters after meeting gas companies to discuss ways to bring down the price at which Norway sells to Europe.

Surging European gas prices, up 250 per cent or more in the past year, have sharply boosted Norway's export revenues but created havoc for energy companies caught in the maelstrom.

Since Russia cut flows to Europe, Norway has become the region's top piped gas supplier, with Moscow blaming the reductions on technical issues caused by Western sanctions over its invasion of Ukraine. Europe says that is a pretext.

Norway is expected to produce some 122 billion cubic metres (bcm) of gas this year, according to official forecasts in May, up 8 per cent from 2021 as producers lifted output as much as possible.

Russian Deputy Prime Minister Alexander Novak said Russian gas exports to the EU would fall by 50 bcm this year, Interfax reported. It sent about 150 bcm to the EU in 2021.

EU energy ministers will try to approve new measures to reduce gas and power prices at an emergency summit on Sept 30 and have asked Norway, which is not an EU member, to help.

'Too big a risk'

The Norwegian premier's talks covered long-term supply contracts. Energy firms said they are ready to sign such deals but need to know the counterparties, after a raft of European energy providers have collapsed because rules have often stopped them passing all their extra costs to consumers.

"At today's price level, it's too big a risk to take for most private players," Oeyvind Eriksen, the chair of Norway's second-largest gas producer Aker BP, told reporters.

"So it's partly a question of pricing mechanisms and partly how states and companies can work together to solve this very serious situation," Eriksen said, adding that talks would continue and that there would be a solution.

"But it is too early to say what kind," he said.

Equinor, Norway's top gas producer, described Thursday's meeting as "useful" and said it is important to have contact with the government about Europe's energy crisis.

It added it sold about half of its gas via bilateral contracts and the other half on the spot market.

Norway and the EU have agreed to form a taskforce, both sides said on Wednesday, with the Norwegian delegation led by the country's EU ambassador, the prime minister's office said.

Oleg Aksyutin, deputy chief executive of Russian energy giant Gazprom, told a conference in Russia that Europe does not have an alternative to Russian gas.

Russia, meanwhile, has been expanding oil and gas exports to others, such as China. REUTERS

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