Since the mid-1980s, domestic natural gas production and exploration activity in Denmark and in the other parts of the Danish Kingdom (Greenland and the Faroe Islands) has increased dramatically. In Greenland and the Faroe Islands, exploration activities have been carried out since 2010, and exploration is expected to continue in future years. This chapter, however, concentrates solely on the gas regulation of the Danish mainland and the continental shelf belonging to it. See the chapters on the Faroe Islands and Greenland for details on the other countries of the Danish Kingdom.
In August 2018, the total reserves of natural gas were calculated at 72 billion cubic metres (bcm). The production of natural gas is expected to continue until after 2035 except for the years 2020-2021 during which the rebuilding of the Tyra Field will take place.
Domestic natural gas production is currently located solely offshore in the North Sea and comprises a total of 19 fields, of which the top three fields represent 66.6 per cent of the total domestic production (figures for 2016). A total of 4.5 bcm was produced from the fields in 2016.
In 2015, three offshore exploration drillings were carried out with new hydrocarbon discoveries. In April 2016, the Minister of Energy, Utilities and Climate (the Minister) issued 16 new licences to 12 different companies as a result of the seventh licensing round, covering a total area of 4,064km2. All licences were for offshore areas. On 26 June 2018, the DEA announced the eighth licensing round in the North Sea (see ‘Update and trends’).
One new open-door onshore licence was granted in 2014, and in 2016, the DEA received one application under the open-door procedure. Further, in 2016, two onshore licences were relinquished. So far, 27 open-door licences have been granted, but no commercial oil or gas discoveries have been made in the open-door area.
Between 2008 and 2010, five licences were granted to explore the potential of natural gas onshore in Danish territory where the target is natural gas in shale layers (shale gas). In June 2012, the Ministry of Energy, Climate and Building (now the Ministry of Energy, Utilities and Climate) suspended the issuance of new licences for exploration and production of hydrocarbon in onshore areas, where the target is shale gas. In 2015, a 3.6km-deep exploration well (Vendsyssel-1) for shale gas was drilled in northern Jutland under a licence granted in 2010. The exploration well showed presence of shale gas; however, not in commercially exploitable amounts. The licensees, therefore, chose to relinquish the licence in June 2016. The government has since decided that no more licences will be granted under the open-door procedure for the exploration and exploitation of hydrocarbon in the onshore areas and the coastal waters of Denmark (see ‘Update and trends’). Thus, licensing rounds will only be carried out for the offshore areas in the North Sea.
A large part of all domestic gas production is carried out by a joint venture, Dansk Underground Consortium (DUC). DUC currently consists of Total E&P Danmark (31.2 per cent ownership interest), Shell Olie og Gasudvinding Danmark (36.8 per cent ownership interest), Chevron Denmark (12 per cent ownership interest) and the Danish North Sea Fund (20 per cent ownership interest). Recently, Chevron has sold its 12 per cent share to Total and Shell has sold its 36.8 per cent share to Norwegian Energy Company (Noreco). Both sales currently await the DEA’s approval, and are thus not finalised. DUC accounts for the majority of the Danish oil and gas produced and is the owner of the key points of the infrastructure for all activity in the Danish sector of the North Sea. DUC was established in 1962, when A P Moller (now called A P Moller-Maersk) was awarded the sole concession. In 2017, A P Moller-Maersk sold its oil and gas activities to Total S A, including its subsidiary Maersk Oil and the ownership interest in DUC.
There are two gas pipelines from the North Sea to the onshore processing facilities on the Danish peninsula of Jutland. These pipelines are currently owned and operated by Ørsted (formerly DONG). A natural gas pipeline currently owned by Ørsted and DUC from the North Sea to the Netherlands was completed in 2004. The Danish pipeline networks are connected to the German and Swedish natural gas pipeline networks. A project for construction of a pipeline connection between the Norwegian, Swedish and Danish pipeline networks, called the Skanled gas pipeline, has been put on hold for the time being.
In late 2014, DONG sold their gas storage facility, Stenlille Gaslager, to the state-owned company Energinet, making Energinet the only provider of natural gas storage facilities in Denmark. There are two underground storage facilities: one in Jutland (Lille Torup) and one on Zealand (Stenlille). Energinet is responsible for transmission of natural gas in Denmark.
Distribution of natural gas in Denmark is owned and carried out by three different operators: Gasforsyningen, HMN Naturgas I/S and Dansk Gas Distribution (DGD), the latter being a company owned by the state-owned Energinet (see question 14).
There is currently no production of LNG in Denmark (however, see question 23). There are 18 natural gas commodity sales suppliers in the country. Since 2004, all Danish natural gas customers have been unrestricted as regards their choice of natural gas supplier.
Denmark was energy self-sufficient from 1997 until 2013. In 2016, the degree of energy self-sufficiency in Denmark was 83 per cent, whereas it was 89 per cent in 2015. The government’s long-term ambition is that Denmark will be self-sufficient by energy produced from renewable energy sources in 2050.
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