Post on 26-Dec-2015
European Security of Supply vs. African Energy Requirements: Could energy partnerships change the international gas business?
Daniel MuthmannVice President LNG Supply & LiquefactionE.ON Ruhrgas AG
12th African Oil, Gas Trade & Minerals Trade and Finance Conference and Exhibition, Malabo, 3-7 November 2008
NOT AN OFFICIAL UNCTAD RECORD
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major Utilities’
Perspective3. Africa‘s Opportunities in a Global Gas Market vs. Domestic
Requirements4. How to bring it together? - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal outlook
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major Utilities’
Perspective3. Africa‘s Opportunities in a Global Gas Market vs. Domestic
Requirements4. How to bring it together? - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal outlook
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Leading Significant Minor
US-Midwest
E.ON key figures 2007
Customers approx. 30 million
Power sales 470,8 billion kWh
Gen. Capacity > 60,000 MW
Gas sales 105 bcm/a*
Gas storage cap. 12.2 bcm
Sales 68.7 billion €
Employees 87,815
Market capital. € 74 bn (Oct. 08)
Credit Rating A (S&P)
EBITDA (adj.) 12,4 billion €
E.ON is the World’s Largest Privately Owned Utility WithStrong Positions Along European Gas & Power Value Chains
E.ON market position
* Not consolidated
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E.ON Ruhrgas AG
Gas supply (incl. LNG)
Gas sales
Gas storage
Network operation
Technical development,advice and services
UpstreamParticipation
ingas
production including
Operatorships
DownstreamShareholdings in
local and regional gas companies and municipal utilities
in Germany and Italy
Transport Marketing of transmission capacities/operation of 11.500 km pipeline network
Project companiesfor gas transmissionand storage, total
working gas volume12,2 bcm
Mid-/DownstreamShareholdings in international energy companies & German gas merchant companies
E.ON Ruhrgas is the Gas Competence Centre within the E.ON group…responsible for sourcing gas internationally
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major
Utilities’ Perspective3. Africa‘s Opportunities in a Global Gas Market vs. Domestic
Requirements4. How to bring it together - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal outlook
S2308_30oe
mtoe
11% 16% 17%
A significant supply gap in Europe (EU30) is emerging due to demand growth & declining production
2007 2015 2020
24%
15%
30%
9%
22%
32%
14%
28%
8%
18%
10%
26%
18%
35%
11%472
580-625555-575
LNG share in supplies
other non-EU imports*
Algeria
Russia
Norway
domestic production
future projects
advanced projects
Remark:Malta and Cyprus are notsupplied with natural gasprovisional data for 2007
*) of which: Nigeria 4%, Egypt 1%, Qatar 1% (2007)Basis for imports: Contracted volumes and prospective contract prolongationsfor Norway extensive utilisation of import capacities is assumed
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Challenges and Opportunities of a Major European Utility: Accessing LNG supply sources and seeking growth
UK10 %
Denmark3 %
Netherlands17 %
Germany18 %
Norway25 %
Russia26 %
61 bcm**
* Predominantly Long-Term SPA** Source: E.ON Ruhrgas, consolidated sale of ER 2007
Many Current Supply Sources*
with limited future
potential…
+
Security of Supply via LNG
Growth outside Europe
Backward integration along value chain into LNG & Upstream
Renewables/CDM/JI
Possibly power & gas business in new regions
[…]
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major Utilities’
Perspective3. Africa‘s Opportunities in a Global Gas Market vs.
Domestic Requirements4. How to bring it together? - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal outlook
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6,88 7,9814,18 14,82
64,1373,47
S.& Cent.America
North America Africa Asia Pacific Europe&Eurasia Middle East
Africa has substantial proven gas reserves and if one adjusts for geographical and strategic considerations… Proved reserves at end 2006 (trillion cubic
meters)
Source: BP Statistical Review of World Energy 2007
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…Africa’s pole position in securing European physical supply market share becomes obvious Proved reserves at end 2006 (trillion cubic
meters)
Source: BP Statistical Review of World Energy 2007
6,88
14,1816,48
32,21
S.& Cent.America
North America Africa Asia Pacific Europe&Eurasiaw/o RussianFederation
Middle Eastw/o Iran, UAE,
Saudi
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However, there are domestic challenges and strategic ambitions equally important that need to be addressed… Provide enough “affordable” energy to
meet the national development targets
Strategic energy goals in the NEPAD Initiative
Regional power pools and grid connections
Use of African Energy sources for regional development
Gas pipelines
Securing future energy sources for future African populace
End gas flaring
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major Utilities’
Perspective3. Africa‘s Opportunities in a Global Gas Market vs. Domestic
Requirements4. How to bring it together? - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal outlook
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There is a natural fit of strategic ambitions between NOCs and European utilities in the field of energy…
…opening a vast number of opportunities
Utilities have: Premium market access and experienceCapabilities along power & gas value chains (incl. renewables)Financial Strength
Utilities seek:LNG access to „keep lights on and houses warm“Growth through backward integration into LNG & Upstream and new markets
NOCs have: Access to reservesExperience from existing projects
NOCs seek:Forward integration/market access capturing more valueDevelopment of domestic energy infrastructure and marketsKnow How & TechnologyFunding
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Elements for a potential Energy Partnership with E.ON (examples)…
„Energy Partnership“
Farm in/Explor.
LNG ProjectMarketing JV Downstream Access
Assets Swaps
LNG & E&P FinancingGuarantee instruments
Financing NOC share
Local EnergyGas Gathering & Pipelines
Consulting&Local JV (gas/power)
Renewables/ CDM
Training & Dev.Corporate University
Special purpose training
Employee Exchange
Local ContentLocal content and sponsorship
Scholarships for school children and university students
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E.ON‘ s competitive edge: A proven track record of mutually beneficial long-term partnerships going beyond gas
With Russian Suppliers since 1970, with Norwegian Suppliers since 1973 Joint storage/pipeline companies JI-Programme (CO2-Reduction) Technical/Managerial Education Education/Scholarships Art exhibitions Hon. Consulates
We understand what “partnership” means: “Give and Take”
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major Utilities’
Perspective3. Africa‘s Opportunities in a Global Gas Market vs. Domestic
Requirements4. How to bring it together? - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal outlook
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The time is now! A unique window of opportunity is opening up… 1. Energy Partnerships high on political agenda
internationally G8 Summit 2007 EU focus Energy needs, prices, and climate change Example: Nigerian-German Energy Partnership
2. Economic growth in Africa picks up momentum Domestic energy supply Significant investment requirement Training & development + transfer of know-how requirements
3. Structural reforms taking place allowing for the energy business to change NOCs with new ambitions and tasks Frameworks combining LNG export and domestic
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Will it be easy? No, there are key requirements for successful energy partnering…
1.Dedication
2.Ability to listen
3.Willingness to act
4.Strong Relationships
5.Political Support
6.Time
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Contents
1. E.ON Ruhrgas Company Introduction2. European Energy Challenges: General and Major Utilities’
Perspective3. Africa‘s Opportunities in a Global Gas Market vs. Domestic
Requirements4. How to bring it together - Partnership Opportunities5. Is this the right time? Will it be easy?6. Influence on international gas business – A personal
outlook
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In 2008 we are at the dawn of a new phase in the international gas business: The age of energy partnerships has begun
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For us, partnering with Equatorial Guinea and Sonagas is an honour. It paves our way for other energy partnerships in Africa
Vielen DankThank youMerci BeaucoupMuchas Gracias
12th African Oil, Gas Trade & Minerals Trade and Finance Conference Malabo, 3-7 November 2008
Back-up
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Example: Structural Investments with CDM
The Clean Development Mechanism (CDM) under the Kyoto Protocol allows industrialized countries with a greenhouse gas reduction commitment (so-called Annex 1 countries) to invest in emission-reducing projects in developing countries and to obtain CO2 credits accordingly
E.ON is Europe´s biggest power supplier and therefore one of Europe´s biggest CO2-emitters as well
E.ON chooses to reduce CO2-emissions of its own power plants and also make use of the opportunity to reduce CO2-
emissions in less developed countries.
We all have only one climate. It doesn‘t matter where emissions are reduced as long as it happens!
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Example (cont.): Reaping a double dividend through CDM E.ON
E.ON obtains CO2-credit by the avoided carbon emissions
CO2-credit can be used in
the European Emission Trading System to which E.ON is a party
Positive impact on the E.ON image
Host Country Pioneers clean local energy
production Meets growing local energy
demand needed for sustained economic development
Accesses E.ON´s distinctive know how in constructing / operating power plants and grids
Takes advantage of E.ON´s financial strength and top credit rating LNG supply +
CO2-creditReliable export income +
Clean local energyDouble
Dividend