Overview

Norway is likely to face substantial challenges finding markets in Europe for its incremental gas production in the coming years as competition between new and existing suppliers gets tougher while uncertainties surround both domestic production declines and gas demand growth. Gas sales levels are likely to depend on how well gas producers face the tougher supply competitive environment, and whether an adequate transport infrastructure is developed.

Overview

A Troll in the Pipe: Finding Outlets for Norway's Gas Supply Surge

Norway is likely to face substantial challenges finding markets in Europe for its incremental gas production in the coming years. Competition between new and existing suppliers is getting tougher while uncertainties surround both domestic production declines and gas demand growth. In CERA's view future levels of Norwegian gas sales will depend largely on the three following issues:

* Finding markets is becoming more challenging. With the competitive environment getting tougher, strategic decisions will have to be made that involve the government, potential infrastructure investors, and producers.
* Developing the gas transport infrastructure adequately. Although the authorities will continue to play a key role in field and new transport infrastructure development, transport company Gassco's role as well as its relations with the gas producers that actually provide the capital for new pipeline investment adds a new dimension to the decision making.
* Different strategies for different producers. Norwegian gas producers range from majors to small independent companies. Their different approaches to selling their gas could result in the emergence of a different type of gas-to-gas competition for export markets from Norway.