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E.ON Ruhrgas seeks more North Sea gas exposure

German utility giant E.ON Ruhrgas will actively bid for acreage in Norway’s upcoming licensing round as part of its expansion into upstream gas production, its chief executive told Reuters on Wednesday.

E.ON Ruhrgas, the largest single buyer of Norwegian gas, has set a long-term target to produce 10 billion cubic meters (bcm) of natural gas per year to improve the security of its supplies. Last year the German company produced about 1.3 bcm. “Yes, we will be active (in Norway’s 20th licensing round),” Bernhard Reutersberg said on the sidelines of an oil and gas conference in western Norway. “We will prefer to stay in the North Sea area,” he told Reuters, but added that the company could bid to participate in fields further north in the Norwegian Sea depending on what is available.

E.ON Ruhrgas has five exploration licenses off Norway and has been cleared as an operator on the Norwegian shelf. More than 50% of its gas supplies come from Norway and Russia. It is also a buyer of gas from other North Sea states where production is declining, forcing it to search for supplies elsewhere. “This (10 bcm) is not only concentrated on Norway but also other areas such as other parts of the North Sea and North Africa,” Reutersberg said.

He said the contested Nordstream pipeline to bring more Russian gas to Germany would start up in 2011 despite political opposition in some Baltic Sea rim states and delays in getting environmental permits for the link across the shallow sea. “We have a clear time schedule, which is ambitious but still realistic,” Reutersberg said when asked if Nordstream would start on time. He said that E.ON Ruhrgas’s decision to postpone the construction of a liquefied natural gas (LNG) import terminal in Germany was related to a slower ramp-up of the LNG market.

Instead, E.ON Ruhrgas booked capacity at an LNG terminal in the Netherlands in a project where it is also a minority partner. “Basically we decided that the market is not yet so big -- and not expected to be in the upcoming years -- to really allow us to build an LNG terminal,” he said. (Reuters)