OSLO, Aug. 27 (Xinhua) -- Both Norwegian gas producers and Minister of Petroleum and Energy Kjell-Borge Freiberg expressed optimism towards their country's ability to cope with recent challenges faced by the industry, online newspaper E24 reported Tuesday.
Due to increased export of liquefied natural gas (LNG) from the United States to Europe, both Norway and Russia saw lost market shares for the first time in four years, the report said.
Although Russia and Norway have lost market shares in European countries, the volume has nevertheless increased due to increased demand.
At the same time, large quantities of gas in the European market drove the European gas prices in the second quarter to their lowest level in 10 years, affecting both Norwegian oil giant Equinor and the state's Treasury.
In its revised budget, Norwegian government estimated the gas price to be 2.2 Norwegian kroner (0.24 U.S. dollars) per standard cubic this year and 1.85 kroner next year, whereas this summer it has been 25 to 30 percent below the estimate.
According to Irene Rummelhoff, Equinor's senior vice president for marketing and trading, Norway's position is stable in the future.
"On the big picture, we think this is a relatively temporary situation because there is an oversupply of LNG that was actually intended for Asia. The demand over there is somewhat weaker than expected, and then Europe is the last resort," she told E24.
Norway already has the cheapest gas in Europe, so Norwegian gas is in safe position, Rummelhoff said.
"We have shown that Norway has both delivery capacity, reliability and competitiveness, we have predictable conditions and the companies on the Norwegian continental shelf are long-term oriented," Freiberg told the newspaper.
"In the future, we expect gas power to become even more important, especially in a climate perspective where natural gas can reduce CO2 emissions by more than 50 percent if replacing coal," Rummelhoff said, adding that low gas prices can also trigger an increased demand, especially in the transition from coal to gas power (1 U.S.dollar = 9 kroner).