The “University Series” aimed to explore the currently developing EU-Norway relationship, particularly in the context of energy, which is a crucial factor considering the ongoing war and gas shortages in Europe.
The authors, therefore, also aimed to highlight the significance of Norwegian gas in the European market. All of them concluded the fact that a strong and reliable energy relationship between the European Union and Norway is seen as a crucial milestone during these uncertain times.
The focus of the last paper will be on analyzing this energy cooperation and examining the recent partnership between Norway and Germany, as the country has become a key importer of Norwegian gas, benefiting from the extensive energy collaboration and the development of interconnectors. Hence, the partnership includes cooperation on short- and long-term gas supplies, offshore renewable energy, and achieving sustainable energy transition goals in the long run.
In conclusion, the Norway-Germany gas supply partnership is crucial for ensuring a secure and sustainable supply of natural gas to the EU, by establishing a direct link between the countries for mutual support.
(Zsanett Gréta Papp)
The Future of the Norwegian-German Relationship in the Context of Emerging Norwegian Gas Supply
Dorottya Molnár
Norway is a significant supplier of oil and gas to the world market, technically, all of the oil and gas produced on the Norwegian shelf is exported. About 95% of the gas is exported via pipelines to the EU and UK. Modern Norwegian society was largely shaped by company and governmental profits from the sales of oil and gas.
Currently, Norway is a small player as a gas producer on a global scale, it covers only 3 percent of the global demand, but as an exporter, Norway is a key actor. This country is the third largest exporter of natural gas in the world, behind Russia and Qatar. Now, the most significant export goods for the Norwegian economy are oil and gas (Norwegian Petroleum 2023).
The ongoing war between Ukraine and Russia, an imbalanced European energy market and significant geopolitical uncertainties considerably influenced the gas supply to Europe. Since Russia invaded Ukraine, gas imports from Russia to the EU have been outstandingly reduced and as a result, the EU highly diversifies its gas suppliers even though it is still dependent on imported fossil fuels. Therefore, Europe tried to search for new opportunities, for more reliable gas suppliers such as Norway (European Council 2023).
The EU-Norway Energy Cooperation
On 23 June 2022, the EU and Norway reached an agreement to work together to distribute more gas to 27 EU countries because nearly half of these countries experienced gas supply shortages from Russia.
To maintain a long-term energy partnership, European Commission Executive Vice-President, Frans Timmermans, Commissioner for Energy, Kadri Simson and Norwegian Minister of Petroleum and Energy, Terje Aasland agreed to cooperate to address the problem of high energy prices, to ensure additional short- and long-term gas supplies from Norway, and to build long-term cooperation on offshore renewable energy (European Commission 2022).
Also, acknowledging that Norway still has substantial reserves of oil and gas, it will be an important supplier to Europe beyond 2030. The EU supports Norway's ongoing exploration efforts and financial commitments to supply the European market with oil and gas. Furthermore, Norway and the EU are dedicated to the Paris Agreement to achieve net-zero emissions by 2050 and cooperate to guarantee a sustainable energy transition with reliable access to energy.
Previously they said that in 2022, there is a good chance that sales to Europe will expand, adding around 100 TWh of additional energy to the European market. Finally, Gassco (Norwegian gas grid operator) reported that a total of 1286 TWh of gas were exported through pipelines to Europe in 2022 (Gassco.no).
Large Increase in Germany
One of the key aspects of the energy cooperation between the EU and Norway is the development of interconnectors, which are transmission cables that link the electricity grids of the two countries. These interconnectors help to ensure the security of the electricity supply and allow for the efficient exchange of electricity between countries. For example, NordLink is Europe’s longest direct power link between the Norwegian and German electricity markets. It operates since 2021. Moreover, it creates the opportunity for these two countries to share and integrate renewable sources including wind, solar, and hydropower.
Currently, Germany shows the biggest increase in imports by importing 11% more natural gas from Norway than the previous year. “There has been extensive energy collaboration between Norway and Germany for many years, and we see that the rise in natural gas supplies from Norway throughout last year has contributed significantly to ease the pressure on Germany’s energy market,” says Frode Leversund, CEO of Gassco (Gassco.no).
By the beginning of 2023, Norway has become Germany’s largest single source of gas. According to the German Association of Energy and Water Industries (BDEW), from 24 February 2022, it took Germany roughly half a year to replace Russian gas in its domestic consumption. By December 2022, more than 40% of Germany's gas imports came from Norway. To diversify its gas supply, Germany has examined many options. In December 2022, the country's first floating liquefied natural gas terminal in Wilhelmshaven was opened.
In addition, the most recent agreement was made in early January 2023 between Germany and Norway to create a Strategic Partnership on Climate, Renewable Energy and Green Industries and possibly build a hydrogen pipeline between the two countries (Energy Monitor 2023). Germany is a remarkable market for Norwegian gas exports, which provides Norway with a stable market for its gas and contributes to the development of the Norwegian energy sector. This cooperation benefits both Germany and Norway and helps to promote a stable and sustainable energy market in Europe.
Conclusion
In conclusion, the EU-Norway gas supply partnership is a mutually beneficial relationship between the European Union and Norway, aimed at ensuring a secure and sustainable supply of natural gas to the EU. Norway is one of the EU’s main gas suppliers, and the partnership is based on a series of agreements and regulatory frameworks that provide a stable and predictable environment for gas trade. The partnership includes provisions for the development of new gas infrastructure, as well as measures to promote energy efficiency and renewable energy sources.
It also seeks to ensure that the gas trade is conducted transparently and competitively, with a focus on promoting the interests of consumers. Overall, the EU-Norway gas supply partnership is a key component of the EU's energy policy and is essential for ensuring the security and reliability of gas supplies to the EU.
This article was made in cooperation House of European Affairs and Diplomacy - Szeged.
Sources:
Infographic - Where does the EU’s gas come from? European Council. https://www.consilium.europa.eu/en/infographics/eu-gas-supply/ Accessed April 6, 2023.
Export of Oil and Gas. Norwegian Petroleum. https://www.norskpetroleum.no/en/production-and-exports/exports-of-oil-and-gas/#liquids Accessed April 6, 2023.
Europe needs Norwegian gas like never before. Gassco. https://www.gassco.no/en/media/news-archive/europe-needs-norwegian-gas-like-never-before2/ Accessed April 7, 2023.
EU, Norway agree to increase gas deliveries as Russian cuts deepen. 2022. Euractiv. https://www.euractiv.com/section/energy/news/eu-norway-agree-to-increase-gas-deliveries-as-russian-cuts-deepen/
Joint EU-Norway statement on strengthening energy cooperation. 2022. European Commission. https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_3975
NordLink, The North Sea (Norway-Germany). NKT. https://www.nkt.com/references/nordlink-the-north-sea-norway-germany Accessed April 7, 2023.
Petkova, Mirela. 2023. “Weekly data: Norway is now Germany’s top gas supplier.” Energy Monitor. https://www.energymonitor.ai/policy/norway-becomes-germanys-top-gas-supplier/
