Dutch gas production hits highest level since Groningen earthquakes

London (Platts)--7 Feb 2018 649 pm EST/2349 GMT

* Netherlands produced 144.76 mil cu m of gas Tuesday

* H-cal to L-cal gas conversion at two-month high

* Demand at 12-month high, with the chance for this to continue Production of natural gas from the Netherlands on Tuesday jumped to the highest level since January 9, the day after the most recent Groningen area earthquakes, with increases in H-cal to L-cal gas conversion in an attempt to match rising demand, data from S&P Global Platts Analytics showed.

Dutch gas production, including from Groningen and other smaller fields, hit 144.76 million cu m on Tuesday, compared with 132 million cu m on Monday.

Variations in production levels from the Groningen field could have potential affects on earthquake activity in the region, according to a report by the gas regulator, the State Supervisor of Mines.

As a result, limiting production variations was one of the proposals the regulator has suggested the economy minister implements in a final decision on production restraints by March.

A 3.4-magnitude earthquake hit the northern Dutch province of Groningen on January 8, the biggest since 2012, followed by a report saying that the earthquake was related to gas extraction.

On the day of the earthquake, total Dutch gas production was 157 million cu m, up from just 122 million cu m on January 3.

L-cal gas produced from Groningen is used as a domestic fuel in the Netherlands for residential heating as well as in the industrial sector, with the Netherlands also exporting L-cal gas for domestic use to Germany, Belgium and France.

Domestic gas demand in the Netherlands rose to 176.94 million cu m on Tuesday, split between H-cal gas at 63.88 million cu m and L-cal gas at 113.06 million cu m, the highest this winter season.

Flows of L-cal gas from the Netherlands to Germany and Belgium also ramped up Tuesday, to 71.23 million cu m and 39.85 million cu m, respectively.

To meet higher demand, a total of 81.11 million cu m of H-cal gas was converted to L-cal gas on Tuesday, the highest since December 14, data from Gasunie showed.

In the Netherlands, there is as much as 29-34 Bcm/year (gas quality depending) of conversion capacity, split between 10-11 Bcm/year at mixing stations and 19-23 Bcm/year at blending stations, leaving little room for large reductions in Groningen production without boosting conversion capacity in the country.

The trend of rising demand is set to extend throughout the week on the back of a cold spell, with S&P Global Platts Analytics forecasting average demand of 164 million cu m/d Wednesday through Friday.

--Karen Kwok,

--Edited by James Leech,

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