The closure will be effective October 1, said people familiar with the matter, asking not to be identified because the plans are still private. A spokesman for the Dutch state secretary for mining said an official decision to close the field would be made during a cabinet meeting later this month.
Since production began in 1963, the field has been a major source of gas for much of Western Europe as well as the backbone of Dutch public finances. Which has damaged thousands of houses.
Dutch front-month gas futures, the benchmark for Europe, rose as much as 24% on Thursday following the report.
The government previously said it aimed to close the field by October 2024 at the latest, depending on the “geopolitical situation”. Gas prices have fallen significantly from last summer’s peaks after Russia’s invasion of Ukraine triggered an energy crisis in Europe.
Dutch Prime Minister Mark Rutte, who publicly apologized before parliament in 2019, survived a no-confidence vote earlier this month as the government battles allegations it was insensitive to complaints over decades. Earlier this year, the Dutch government pledged to spend a total of €22 billion over a 30-year period to compensate Groningen residents.
According to the Groningen Mining Damage Institute, at least 127,000 of the approximately 327,000 homes in the region reported some damage. More than 3,300 buildings in the area have been demolished since 2012 because earthquakes made them unsafe.
One person said the Dutch government could also eliminate gas wells next year by filling them with concrete. A maximum of 2.8 billion cubic meters of gas will be extracted from the Groningen field by October as it currently operates at pilot light, meaning it is now operating at a minimum level.
The decision to close is not entirely irreversible, the people said. He added that if there is another energy crisis or severe winter, it will take about two weeks to reopen the wells. Based on the weather forecast, the government has enough time to withdraw its decision.
(Bloomberg, June 15, 2023)