The Dutch government announced it would reduce gas production at Groningen gas field by 15 percent to 20 percent per year due to local residents' concerns about earth tremors, Reuters reported.
Groningen is located in the northern part of the Netherlands and is one of the biggest's gas fields in the world, producing more than 2 trillion cubic meters of gas, according to the most recent numbers. Gas output from Groningen, where Nederlandse Aardolie Maatschappij BV (NAM) operates, reached 53.8 billion cubic meters in 2013.
The Dutch finance ministry said the Netherlands reports $16.3 billion of revenue per year from Groningen gas sales to utilities and industries within the country.
"If we extract less gas, that has a cost," Finance Minister Jeroen Dijsselbloem told Dutch broadcaster NOS.
Gas prices have increased as a result of the announcement.
"The decision is overall bullish for gas prices, but contracts did not move much today as the market already priced the news in earlier this week," said Oliver Sanderson, senior gas analyst at Thomson Reuters Point Carbon.