Oleofuels Business Today, Vision & Strategy An Oil Company Perspective Dr. Spyros Kiartzis Alternative Energy Sources & New Technologies Manager Oleofuels 2015 Conference
Contents • The future of transport • Hellenic Petroleum overview • Renewable energy strategy • Investing in new technologies in energy and transport 1 1
Transport Focus has been on Energy/GHG Reduction 2
Electric Vehicles likely attractive for some light duty applications but long haul will need low carbon fuels Πηγή: Ricardo research & US DoE 3
Next generation biofuels can be an alternative 2 nd gen biofuels Πηγή: ΙΕΑ, IRENA Πηγή: I ΕΑ - Bioenergy 4
Biorefinery – oil industry’s next step Increasing stringent environmental regulation Growing demand for cleaner fuels Increase in the production of derivatives from declining quality oil Growing pressure of several segments of the society aiming at the reduction of GHG Search for alternative raw materials such as biomass, NG and coal Profitability maintenance - Survival 5
Contents • The future of transport • Hellenic Petroleum overview • Renewable energy strategy • Investing in new technologies in energy and transport 6 6
Leading independent refiner in SEE with recently upgraded complex refining asset base; sales evenly split between exports and domestic, where leading market position supports high over-performance vs benchmarks Group operational footprint • High complexity and net cash margin SERBIA refineries BULGARIA FYROM • MONTENEGRO Balanced sales channel mix with exports at 50% of total sales GREECE • Regional footprint with international subsidiaries Power & Gas CYPRUS • > 70% of cashflows driven from international sales and regional benchmark margins • Leading domestic market position with c.60- Nelson/Solomon complexity and benchmark margins 65% of wholesale and c.30% of retail 4* 5* 1* • Marketing and Petchems vertically integrated 13,9 with Refining; diversification in G&P 11,3 9,7 8,8 6,9 • 5,0 Completed extensive restructuring plan significantly improving competitiveness Aspropyrgos Elefsina Thessaloniki position with c. € 50 -70m of further upside NCI Solomon (*) Average benchmark margins 2014-2015 ($/bbl) 7
Assets overview Core business around downstream assets with activities across the energy value chain DESCRIPTION METRICS Exploration & • Exploration assets in Greece, Montenegro Production • Complex (recently upgraded) refining system: • Capacity: 16MT – Aspropyrgos (FCC, 148kbpd) • Refining, Supply NCI: 9.6 – Elefsina (HDC, 100kbpd) • Market share: 65% & Trading – Thessaloniki (HS, 93kbpd) • Tankage: 7m M 3 • Pipeline fed refinery/terminal in FYROM • Basel technology PP production (integrated with Petrochemicals • refining) and trading Capacity (PP): 220 kt • > 60% exports in the Med basin • • Leading position in all market channels (Retail, c.1,700 petrol stations Domestic • Commercial, Aviation, Bunkering) through EKO 30% market share Marketing • and HF (BP branded network) Sales volumes: 3MT • Strong position in Cyprus, Montenegro, Serbia, International • c.290 petrol stations Bulgaria, FYROM Marketing • Sales volumes: 1MT • Advantage on supply chain/vertical integration • • ELPEDISON: Second largest IPP in Greece (JV Capacity: 810 MW with Edison/EdF) (CCGT) Power & Gas • DEPA/DESFA GROUP: 35% in Greece’s • Volumes (2014): incumbent NatGas supply company (DESFA in 3.0bcm sale process) 8
Contents • The future of transport • Hellenic Petroleum overview • Renewable energy strategy • Investing in new technologies in energy and transport 9 9
The Greek renewables sector: one of the fastest growing in Europe with increasing contribution in the energy mix RES contribution in electricity consumption RES Installed capacity on the grid (interconnected) 2004-2014 (TWh) 2004-2014 (MW) OIL RES Note: This is the energy consumption monitored on the HV grid. IMPORT 4.364 The increased penetration of PV in the last 3-4 years resulted in BIOMASS HYDRO 47 4.205 the decrease of HV consumption. Overall there is a stabilization of PV NATURAL GAS 46 the consumption in the last 3 years. LIGNITE SMALL HYDRO WIND 51,7 53,4 54,2 56,4 56,9 52,8 52,4 51,9 50,5 50,9 50,4 +1.057 3% 4% 5% 6% 5% 6% 6% 6% 6% 4% % Average 1% +27% 2% 2% 2% 6% 15% 3% 4% 5% 17% 3.148 11% Annual Increase 8% 7% 8% 8% 8% 45 10% 2.435 7% 10% 4% 2.419 6% 9% 10% 5% 13% 11% 11% 18% 16% 28% 15% 29% 23% 18% 1.424 23% 19% 20% 8% 2.052 24% 45 13% 439 220 1.433 220 1.179 213 44 205 998 43 153 36 38 197 63% 11 60% 58% 777 183 55% 55% 54% 53% 53% 52% 667 37 158 1.662 46% 45% 533 7 37 1.520 1.466 7 1.363 407 20 96 20 74 1.039 53 3 917 48 791 637 43 549 412 341 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SMALL HYDRO < 15MW Source: ADMIE – INDEPENDENT POWER TRANSMISSION OPERATOR 10
ELPE Renewables is Hellenic Petroleum Group’s renewables and new technology arm Renewables Strategic Goals: Competitive Advantage: o Renewable electricity installed o In-house know-how in procurement, project capacity: 100-200 MW management and operation of RES units o Balanced and diversified portfolio o ELPE Group’s real estate for RES project development o Credible and reliable partner for renewables projects To be achieved through: in Greece o Pipeline c.200 MW (PV, Wind, o Better access to funding of projects in a challenging Biomass, Hybrid) in various stages environment of development o Selective acquisitions o ELPE Group already active in electricity production and trading through ELPEDISON o Strategic partnerships 11
Investing in Renewable Energy Sources • Developing renewable electricity to diversify Group’s energy portfolio. Also offsetting part of CO 2 emissions due to refining and power generation. Wind farm and PV stations in operation Developing a 200 MW portfolio (in various maturity stages) • Expanding in biofuels 2 nd and 3 rd generation biofuels 12
Contents • The future of transport • Hellenic Petroleum overview • Renewable energy strategy • Investing in new technologies in energy and transport 13 13
Supporting new technologies in energy and transport • Supporting R&D projects with various academic institutions : “Sustain - Diesel”: hybrid diesel from used cooking oils “Sustainable use of marine microalgae for the production of biofuels and high-added value biochemicals ”: 3 rd gen biofuels • Pilot applications of alternative technologies in transport Electric vehicle charging points in selected petrol stations • Corporate Venture Capital - under discussion 14
Participating in R&D projects … Sustain-Diesel Hydrosol Plant project - FCH JU GREEN MEOH Green MEOH project - CAPITA Sustainable use of marine microalgae for the production Innovation Clusters of biofuels and high-added value bio-chemicals 15
… and European Union initiatives 16
Sustain Diesel: Used Cooking Oil Diesel-2G • Increased cetane • Higher HHV • More stable - no TAN + Η 2 • Sustainable Biofuel WCO 2G catalyst ? • Pilot testing to determine Potential to cover up to 2% of max UCO mixing ratios Greek diesel demand • Large-scale units require large investments
Sustain-Diesel: co-hydroprocessing of heavy atmospheric gas- oil/waste cooking oil – next steps Market data: • Vegetable oil annual consumption in Greece: 265.000tn (24Kg/person/year) • 52.400tn/yr Used Cooking Oil (~15.000tn recycled) • Vegetable oils: available, mature market & distribution network Potential co-processing problems: • Catalyst deactivation • Metal corrosion • Increased hydrogen consumption • Raw material degradation during storage 18
Our vision: Sustainable transport & Clean energy • Gaining know-how in future energy technologies • Developing new business • Converting R&D outputs in production Evolving to an innovative, reliable and competitive energy supplier in the future 19
Hellenic Petroleum: Energy for life 20
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