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UPDATE 1-Gas output from Dutch Groningen field unlikely to rise-politician

Sun, 15th Feb 2015 12:46

(Adds details, background, quote)

AMSTERDAM, Feb 15 (Reuters) - Output from the Netherlands'giant Groningen gas field is "very unlikely" to rise in thesecond half of the year, the parliamentary leader of the rulingLiberal Party said on Sunday.

The government, which faces elections in March, has comeunder pressure to reduce output at the field because theextraction is causing earthquakes that have led to billions ofeuros in damages. The country is the EU's largest gas exporter.

Economy Minister Henk Kamp said last week that productionwould be capped at 16.5 billion cubic metres (bcm) in the firsthalf of 2015, but could be increased in the second half of theyear.

But Halbe Zijlstra, who is in the same party as PrimeMinister Mark Rutte, told the weekly current affairs programmeBuitenhof that production at the field, the largest in Europe,is "unlikely to rise" above a current level.

"I estimate the chance that we will go back up on July 1very small," he said. "But we need to research the consequencesof less gas extraction."

The production cap at Groningen caused gas prices to jump inmajor European trading hubs last week.

The official government cap for 2015 is 39.4 bcm, but Kamptold parliament that production could be lower if studiesindicate that level is unsafe and if the Netherlands can stillmeet domestic needs and international delivery contracts.

Opposition lawmakers have dismissed a temporary cap of 16.5bcm in the first half of 2015 as a short-term election ploy andexpected it to be ramped back up later in the year.

Extraction at Groningen has resulted in increasingly strongearth tremors, some measuring as much as 3.6 on the Richterscale, which have cracked buildings and led to protests.

Dutch gas exports in 2012 totalled nearly 57.3 billion cubicmetres (bcm), or around 12 percent of Europe's gas demand, datafrom the Gas Exporting Countries Forum showed. About 75 percentcomes from the Groningen field.

It is operated by government-owned Gasunie and output isjointly exploited by the government, Royal Dutch Shell and Exxon. ($1 = 0.8785 euros) (Reporting By Anthony Deutsch; editing by Susan Thomas)

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