Holland, a global center for energy products

The world's three major oil refinery centers are Rotterdam, Singapore and Houston. These locations also serve as distribution centers for their relevant regions.

For North and West Europe, Rotterdam is also the "energy" center, where the prices are established. The geographic position of the Netherlands and the presence here of a large seaport caused various large oil refineries and oil storage depots to settle in Rotterdam in the 1960s.

Thanks to an efficient systems of links between the Netherlands and its surrounding countries, Rotterdam became the main distribution center of crude oil and oil products in Northwest Europe.

When a large, and various smaller deposits, of gas were also discovered in the north of the Netherlands is the 1960s, a pipeline network was constructed from the Netherlands for the distribution of natural gas across vast areas of Western Europe. By using the small, exhausted gas fields as buffers and storage depots for imported natural gas, the Netherlands operates, as it does for oil, as the distributor of gas for Europe through the existing pipeline network.

Thus, the Netherlands has become a European dealer in both oil and natural gas that stores supples and manages imports and exports.

In 1996, the Netherlands' crude oil imports totaled NLG 16 billion (99 million tonnes). Imports from Norway, the United Kingdom and Russia totaled 52 percent. Those from Saudi Arabia, Kuwait and Iran stood at second place supplying 33 percent of total imports. The third supplier was Nigeria with a share of 11 percent.

Canada and Venezuela also supplies "black gold" to the Netherlands, though, with a 3 percent share, to a far lesser extent than Nigeria. These oil flows to the Netherlands are destined for the port of Rotterdam, where the refineries process the oil into all kinds of semiderivatives and end products.

Approximately 1,200 kilometers of pipeline run underneath the port and industrial area of Rotterdam. Crude oil pipelines measuring more than a meter in diameter run from the sea terminals at the Maasvlakte industrial area and Europoort.

The crude oil is brought in by tankers weighing anything up to 300,000 tonnes. As well as going to the refineries in the Rotterdam port region, a small amount of this crude oil is sent directly through the pipelines to Germany and Belgium. In addition to crude oil, approximately 20 semiderivatives and end products, including naptha, kerosene, LPG and ethylene, flow through the pipes of the five Rotterdam refineries to customers in the Netherlands and abroad.

Oil products

About half the total output of the refineries 40 million tonnes of oil products is exported, primarily to the surrounding countries. In 1996, this output was valued at NLG 18 billion. The geographical distribution of the export of oil products shows that 52 percent goes to the German market, 25 percent to Belgium and 7.5 percent to the bunker trade for shipping.

Further, 5.5 percent goes to France, 3 percent to the United Kingdom and 2 percent to Switzerland and Scandinavia. Import of crude oil has remained relatively stable throughout the years.

Shifts occur only in regard to the regions of origin. Broadly speaking, there is a shift from the Middle East to the North Sea countries, specifically Norway. The import of crude oil is the largest single flow of goods that passes through the port of Rotterdam.

The import of oil is expected to increase until 2005, in order to meet Europe's growing demand for energy. A shift can be observed in the import and export of oil products such as from heavy to light products, for example gasoline and particularly diesel.

The worldwide stabilization of production and demand means Rotterdam is seeing a considerable transshipment of end products. Arrivals at the port rose by almost 50 percent. In addition to the export of oil as an energy product, natural gas is also an important Dutch energy product which is distributed through pipelines across Western Europe.

In 1997, total production was approximately 94 billion cubic meters, of which half was exported. In 1996, the export value of natural gas, whose price is linked to that of oil, increased to NLG 9 billion. In international terms, the Netherlands is the world's largest exporter of natural gas after Russia and Canada.

The Dutch gas distribution company, Gasunie, which is responsible for the trade and transportation of Dutch natural gas, also fulfills a key role in gas supplies to Europe. As well as purchasing natural gas in the Netherlands, the company buys natural gas from Norway and the United Kingdom, some of which it exports to Germany, Belgium, France, Italy and Switzerland.

For more than 30 years, billions of cubic meters of gas have been pumped through European pipelines to customers in those countries. Imports (currently only from Norway and the United Kingdom) are gradually being stepped up. From 2001 on, Russian gas will also flow to the Netherlands from the vast gas fields of Russia.

For the time being, the agreement provides for 80 billion cubic meters, to be delivered over 20 years. The Netherlands connections to the natural gas highway systems of all the surrounding countries have rendered it Europe's natural gas intersection.

Once natural gas has been extracted from a particular field, the empty location can sometimes serve as a storage depot for purchased gas. In the summer, these fields store excess stocks, and in the winter they offer a buffer supply from which Gasunie can extract gas if required.

The growth of the oil industry and natural gas extraction was accompanied by the Dutch subcontracting industry developing areas of specialism in the design and production of installations for the process industry and the distribution of energy products.

The five large refineries in the Rotterdam port area were designed and built by members of the same industry, as were installations for gas extraction and distribution. More than 25,000 people are currently employed by Dutch subcontracting firms to the oil and gas industry.

In 1997, the total turnover of subcontractors to the oil and gas industry was NLG 7 billion. About 70 percent of the annual turnover is acquired on foreign offshore markets and from subcontracting to the onshore industry.

There are four large steel construction companies in the Netherlands which are capable of designing and building entire exploration and production offshore platforms. There are also a few dozen companies which specialize in specific equipment for the rigging out of these platforms. the Dutch subcontracting industry can provide 70 percent of the required installations.

Dutch companies specialize primarily in island superstructure, automation and environmental protection systems. Areas of specialism include the supply of helicopter decks, cranes, winches, derricks, air-conditioning systems, power plants, compressors, steam turbines, pumps, hydraulic installations, accommodation units, underwater distribution stations and electrical installations.

Ten consultancy firms work internationally on all design- related aspects of the development of oil and gas fields, both onshore and offshore. The also design distribution systems and pipeline networks, perform computer simulations, soil analyses and research into the improvement of safety and protection of the environment.

Various research institutes have laboratory facilities which simulate offshore conditions using scale models. Another important part of this industry is the services sector in which the companies deploy drilling platforms, drilling vessels and crane vessels for installing offshore platforms.

A number of ocean-going tugs also supply and relocate drilling platforms and oil tankers. Diving companies operate in the various Dutch ports for such underwater activities as inspections.