Germany supports cross-border gas deal with Netherlands

The German cabinet backed a deal on Wednesday with the Netherlands that would support the extraction of gas from a reservoir located in the North Sea. Berlin is looking to increase its domestic gas production. After the Ukraine conflict and Germany's decision not to import Russian gas, the government is now focusing on alternative solutions, such as increasing domestic exploration and extraction.

Since decades, the German natural gas industry has seen a decline. In 2022, the annual consumption of natural gas in Germany was only around 5.5%.

The Dutch energy company One-Dyas is leading the project and estimates that it will be able extract between 4.5 billion cubic meters and 13 billion over several years from the "N05-A field."

This would be roughly 6-16% of the 80 billion cubic meters that Germany will consume in 2024. In order to extract the gas, Germany needs several levels of approval. It is not known how long this will take. The Dutch authorities already have the necessary legislation.

The agreement, which was approved on Wednesday by the German government, outlines how gas reserves across the border will be divided and assessed as well as taxation and royalties as well as cooperation between the authorities of the two countries.

According to the Ministry, Lower Saxony in western Germany, where the fields lie, will decide on its own whether or not to approve certain applications for gas production.

Environmental groups have filed legal challenges against the project, claiming that it could threaten the UNESCO Wadden Sea World Heritage Site. Sascha Müller-Kraenner of the DUH environmental group said that the German government was handing Borkum, the Wadden Sea, over to fossil fuel industryisation. This would have devastating effects for biodiversity in North Sea. (Reporting and editing by Barbara Lewis; Holger Hansen, Riham Alkousaa)

(source: Reuters)