* Record gas export volumes expected for 2012
* Gas transportation system close to limit
* Major gas discoveries needed to justify new pipelines
By Nerijus Adomaitis
HAUGESUND, Norway, Dec 7 Norway, Europe's
second-largest gas supplier after Russia, is nearing the limits
of its exports as its pipelines are almost fully utilised and no
major new fields are coming online soon, the head of its gas
system operator Gassco said.
The Nordic country supplies about a fifth of the gas
consumed in Europe and Britain has been increasingly dependent
on Norwegian supply as its own reserves are falling by an
average of more than five percent a year.
Norway's gas exports will hit record volumes this year and
then move sideways, Brian Bjordal, Gassco's president and chief
executive, said in an interview.
"This year, exports to Europe will be above 100 billion
cubic metres (bcm)... It will be a record," he told Reuters. But
he added that the gas transportation system was operating close
to maximum capacity, limiting further export growth.
Norway's government projects its gas output for 2012 to rise
to 107 bcm this year from 94.2 bcm in 2011, and to inch up to
110 bcm in 2013 and to 112 bcm in 2014..
Norway's annual gas output is roughly equal to yearly demand
in Britain, Europe's biggest gas market.
While the Norwegian Petroleum Directorate has previously
predicted gas sales peaking at between 105 bcm and 130 bcm in
2020, Bjordal was more cautious about the upper limit because of
the total capacity of the existing pipelines that take gas to
the UK, Germany, France and Belgium.
"The system can handle a maximum of less than 120 bcm," the
Gassco chief said.
Norway largely relies on pipelines to export its gas, but it
also has a liquefied natural gas (LNG) terminal at Snoehvit, on
the country's north coast, which in November sent its first
cargo to Japan via the Arctic.
Gassco operates the biggest integrated offshore gas system
in the world, with more than 50 fields feeding gas through 8,000
km of pipelines on the seabed.
So far, no major expansion of Norwegian gas transportation
capacity towards Europe is planned, as there are not enough
major discoveries to justify building a new pipeline to the
Barents Sea in the Arctic, where most newly found resources are
oil, not gas, although more exploration is planned in the
GAS OUTPUT AT "FULL BLAST"
Bjordal said Norway's gas production was going at "full
blast", with no major additions coming online soon.
"At this point in time, the production system is more or
less at its maximum. There are no fields that can introduce more
Norwegian government officials said this week the country's
exports would also depend on whether future European demand
scenarios warranted the high investment needed for new capacity.
"For Norwegian gas producers, a clear signal from European
policy makers on the role of gas in energy mix is important,"
Ane Hansdatter Kismul, state secretary for oil and energy, said
to the Norwegian-German energy forum.
A sluggish economic outlook as well as energy prices that
favour coal-fired power generation over gas mean Europe's gas
demand outlook is not set to rise by much in coming years.
($1 = 5.6376 Norwegian crowns)
(Editing by Henning Gloystein and Anthony Barker)