CIPS Branch Event April 18 th 2013 About Me Just a few words - PowerPoint PPT Presentation

CIPS Branch Event April 18 th 2013

About Me  Just a few words WINGAS UK Limited 2

Disclaimer This presentation (and any information which has been or may be supplied in writing  or orally in connection with it, or in connection with any further enquiries in respect of it) (the “Presentation”) may contain confidential information relating to WINGAS UK Limited (WINGAS) , its affiliated companies and/or its and their third party customers, suppliers, contractors, representatives, agents and partners. This Presentation may not be copied, reproduced or distributed without the prior consent of WINGAS. The information within this presentation has been prepared in good faith by  WINGAS. However no warranty or representation, express or implied, is made as to the accuracy, correctness, fitness for purpose, completeness or adequacy of any statement, estimate or opinions contained within this Presentation This Presentation is not intended to provide the basis for an investment decision  Market price, commentary and information contained are for general information only. Recipients must not rely on the information contained The Presentation remains the property of WINGAS  WINGAS UK Limited 3

The perfect storm: Demand WINGAS UK Limited Source National Grid 4

The Perfect storm: Storage Picture WINGAS UK Limited Source National Grid 5

The Perfect storm: UK Gas Flows  March 22 nd 2013  Prolonged low temps  Global gas  Interconnections  Norway  UK Storage 6 WINGAS UK LIMITED Source National Grid

CIPS: Objectives  Understand the traded energy market in the UK  How this market links to the EU  Market Participants: Suppliers, Transporters, Regulators and Consumers  Typical contract structures WINGAS UK Limited 7

CIPS The traded energy market: UK WINGAS GmbH, Kassel 8

Traded Energy Market: UK History 1986 Gas Act: Separation of supply and transportation  1989: Electricity Act - De-regulation and un-bundling foundations  1990: CEGB is dismantled: National Power, Nuclear Electric, National Grid  1995: Gas Act: Establishing framework for market participants Uniform Network Code  2001: New Electricity Trading Arrangements NETA – The commoditisation of electricity  2005: BETTA - UK wide trading framework for electricity  WINGAS UK Limited 9

CIPS: Cost Breakdown Natural gas Metering 1% Commodity 76% Transportation 9% Climate change levy 12% Margin 2% 10

CIPS : The cost of Electricity Obligations, Levies Green initiatives 18% Margin 4% Transportation Commodity 51% And Metering 27/% 11

Energy Market drivers Emerging economies TECHNICALS Nuclear Power turn downs Weather World Henry World Exchange rates Freight Hub LNG Market Gas Market Market UK World UK Global Power Coal Gas oil Market Market Market Market EU Underlying Gas economic French German EUETS Market trends Power Power Market Market 12

UK Supply bulid up : Last 365 days 13 WINGAS UK Limited Source National Grid

UK Gas System 14 WINGAS UK Limited

UK Power Generation 15 WINGAS UK Limited

The National Transmission System  NTS  85bar operational pressure  2500 miles long  140 exit points  At least 60 to Generation and Major Industry  National Grid Owner and Operator  Transportation Charge:  NTS Exit Capacity  NTS Commodity 16 WINGAS UK Limited

CIPS: Transportation and Delivery  Local Distribution Zone (LDZ)  3 pressure ranges HP, IP LP  12 Zones  North West, London, W Mids, E Anglia  Owned by the National Grid  South and Southeast- Scotia  Wales & South West – Wales and West  North & Yorks - Northern Gas Networks  Transportation charges:  LDZ Commodity Charge  LDZ Capacity Charge 17 WINGAS UK Limited Chart: National Grid

The Network Code  The National Grid describes the codes as “the hub around which the competitive gas industry revolves, comprising of a legal and contractual framework to supply gas and transport gas. It has a common set of rules for all industry players which ensure that competition can be facilitated on level terms” The code is over 450 pages and covers all aspects Health, Safety, Access, Consequences  The UNC commitment is made by consumers within a supply agreement  WINGAS UK Limited 18

Procurement Best Practice  Start point: What is the goal of my organisation?  Energy Policy: The foundations on which delivery will be made  Energy Strategy: What is your risk appetite?  Market Approach: Direct or Consultant?  On going review: Budget control WINGAS UK Limited 19

CIPS Event: Consultant market  UK: OFGEM: Regulation  UK: Mergers and Acquisitions  EUROPE: Growth potential as markets change  UK and Europe: Carbon / Sustainable agenda  UK & EUROPE: Engineering support services WINGAS UK Limited 20

Current Trends : Energy Procurement  Payment Terms greater focus on longer terms from most industrial sectors  No surprises: Take or Pay levels, Transportation charges  Carbon: CFD, EUETS CRC & FITS  Nimble approach from smaller supply companies  Transparency, accountability and accesability WINGAS UK Limited 21

Value Added Services  Often requested, rarely utilised  What does value added mean?  Training and seminars  Advice and support  Equipment  All of these require Investment WINGAS UK Limited 22

Procurement Strategy WINGAS UK Limited 23

Procurement Best Practice: Summary  Start point: Set your course accordingly  Energy Policy: Involve all stakeholders  Energy Strategy: maintain focus  Market Approach: Test, Question & Consider the direct and indirect  On going review: Don’t limit yourself to the present – 5 years WINGAS UK Limited 24

European Markets: Open?  Transparency of Information  UK has lead the way  EU still not fully, completely unbundled  Gas and Pipeline Unbundling is a success though  Access is simplified and standard for all participants  Recent UK shortfalls in storage combined with a price spike has resulted in draws for EU storage and delivery into the UK market  The expected scenario: Consolidation of Energy Companies  The current trend: Traditional transporters and re-sellers now looking to become suppliers, and in some cases succeeding. 25 WINGAS UK Limited

European hubs. NBP TTF GP ZBH PEG N NCG BG Physical point Virtual point

More energy – together Wintershall Holding GmbH W&G Beteiligungs-GmbH & Co. KG OAO Gazprom Kassel Kassel Moskow GASCADE Gastransport GmbH NEL Gastransport GmbH OPAL Gastransport GmbH WINGAS GmbH Kassel Kassel Kassel Kassel astora GmbH & Co. KG WINGAS Uk Ltd. WINGAS Holding GmbH Kassel Richmond Kassel WINGAS Storage Uk Ltd. WINGAS Benelux s.p.r.l. WINGAS UK Limited London Brussels 27

More energy – together Customers in more than 200 countries and in virtually all industries  Top 3 market position in 75% of our businesses  Know-how 70 major R&D sites and >1,900 research cooperations’  with customers, science and partners Strong R&D pipeline; No.1 in Patent Asset Index  Competency and skill based orientation  Success founded on innovation and a fresh approach  WINGAS UK Limited 28

More energy – together 16% of Global Gas Reserves  20% of Global Gas Production  28% of Europe supplied  Major Shareholder in Nord Stream  Fully integrated E&P, Transportation and Marketing  WINGAS UK Limited 29

THANK YOU SALES@WINGAS-UK.COM We are looking forward to your telephone call +44 (0) 20 8948 9685 WINGAS GmbH, Kassel 30