budapest, 31 st may 2012
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Russian gas – European possibilities . Didier Lebout, Head of Strategy, Gazprom Marketing and Trading France. Budapest, 31 st May 2012. Gas in Europe: an eco-friendly solution for decades ahead. - PowerPoint PPT PresentationTRANSCRIPT
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Budapest, 31st May 2012
Russian gas – European possibilities
Didier Lebout, Head of Strategy,
Gazprom Marketing and Trading France
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Gas in Europe: an eco-friendly solution for decades ahead
Natural gas: the best solution for environmentally safe and economically efficient generation in the decades ahead.
Much lower costs to achieve European emission reduction goals towards 2050, according to a study commissioned by the European Gas Advocacy Forum:
Through RES: up to $ 1.5 trillion (out of which $820 billion to be paid from the budget of the European states)Through “gas scenario”: 500 billion dollars less by 2030, and 850 billion less by 2050 than the full RES scenario.
Other advantages:
Gas is available, its reserves are predictable Supply routes are growing. Gas power production is also flexible: it can provide a “base load”, cover peak loads, or act as a back-up for downfalls in RES power production.
Budapest, 31st May 2012
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European imports
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The gas market in the early 21st century should be discussed in an increasingly global scale. One key principle: It is the principle of long-term contracts with oil products index and the “take-or-pay” conditions that our parent company and the entire Gazprom Group in foreign markets base their activity upon.
Gas market development: becoming more global
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Spot-markets are volatile - no guarantee of supplyEarly days economic crisis: prices in the spot markets of continental Europe
(over-contracted volumes dumped in the spot market, forcing the price down there)After the European customers had a chance to adjust their contracts, the excessive volumes on spot disappeared and spot prices went up
Volatile spot markets– an adequate pricing reference? Spot markets in continental Europe: not yet mature, liquid and deep enough to provide a reliable price signal Gazprom Group: not against spot peg, but its share is limited by own economic limits of spot markets.
Oil-pegged pricing: predictable and protected against the abuse of any market player
Oil-peg versus spot
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Conclusion: a hybrid pricing model in Europe’s gas market1. Long-term contracts and oil-indexation: leading role, secured supplies2. Spot-market: balancing role, arbitrage for companies at the margin Closely interconnected, healthy balance between its two components
Long-term contracts: a fundamental role
For gas consumers For gas producersSecured gas supplies Predictable prices thanks to the oil indexation Flexibility and services
Possibility to plan investments : production and transportation of gas is only reasonable under long-term contracts with off-take obligations (no one would construct a costly pipeline without a firm belief that it will be filled with gas)
Long-term contracts: mutual obligations – mutual guarantees
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Policy: equal treatment is essential
In Europe, equal treatment and equal opportunities for all projects and all technologies are essential to enable genuine competition.
Long-term plans – the nuclear phase-out and renewable energy What will be able to replace the generating capacity being phased out? What solution would be best if we decide to reduce nuclear power generation?
A number of imperfections in the current regulatory framework: ‘merit order’ for access to electricity grid intended to stimulate renewable sources but… nips in the bud all incentives for investing in other areas of generation
Budapest, 31st May 2012
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GM&T Ltd : a quick presentation
6 Budapest, 31st May 2012
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Our landmarks:• Company created in mid-2006• First sale to the end user: end of 2006• 2007-2008: direct sales to very large end users-monosite• 2009-2010 : expanding to medium –size end customer market and multi-site large clients• 2009-2010: First smart meter installed• 2011: development of the sales to small and medium clients• The total of about 1 bcm delivered in 2010
French sales organization is integrated inside GM&T Energy team (Manchester) active in England, Ireland, Belgium, Netherlands, Germany.
In France, GM&T also has other activities • Gazprom representative functions in France and admin support functions;• To manage the EU REACH program for GAZPROM & SIBU (Registration of chemicals products
exported to EU)• To develop through BST synergies between all BU’s of GM&T and all others entities of the
Gazprom group.
Gazprom Marketing and Trading France The French example
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8 Budapest, 31st May 2012
August 2000: liberalization of the market for sites consuming more than 237 GWh/y (± 20% of the market is open – roughly 600 sites)
August 2003: liberalization of the market for sites consuming more than 83 GWh/y (± 37% of the market is open – roughly 1200 sites added to the liberalized market) July 2004 : liberalization for the professional clients (± 70% of the market is open – roughly 640 000 sites added to the liberalized market)
July 2007: liberalization of the domestic market (11 millions sites) = total liberalization of the market
Dynamic of Gas market liberalization in France - 1
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Dynamic of Gas market liberalization in France - 2
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French gas market structure overview and GM&T position in 2011
10 Budapest, 31st May 2012
(2,700 sites)
B2S( 71,000 sites)
B2i+
B1(707,000 sites)
(10,193,000 sites)
15 Bcm / year
13 Bcm / year
INDUSTRIES
PROFESSIONALS
RESIDENTIALS
(1,200 sites)
( 71,000 sites)
(707,000 sites)
18 Bcm / year
FRANCE
Market share: approx. 6%
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Thank you for your attention!
Budapest, 31st May 2012