Afg industrie gaziere 2015 uk bd

The gas industry, an asset for France

The French Gas Association National and international representations

Public affairs

Events Publications

Technical activities

Training

Bureau of gas standardisation

Products certification

The AFG, which was founded in 1874, is the professional union that represents the French gas industry (natural gas, biogas and LPG).

It promotes the industry’s business, • by representing it with the authorities; • by participating in the drafting of legislative and regulatory documents; • by contributing to work both in Europe and internationally; • by carrying out studies through its seven commissions; • by distributing information via different media; • and by providing specialised services (standardisation, certification, training).

It includes a wide range of private and public organisations - diversified or specialised, French or foreign-owned, operating in the global, national or local markets, - as well as individual members.

7 standing members*

ENGIE ENGIE_logotype_CMYK 10/04/2015

29 associated members*

24, rue Salomon de Rothschild - 92288 Suresnes - FRANCE Tél. : +33 (0)1 57 32 87 00 / Fax : +33 (0)1 57 32 87 87 Web : www.carrenoir.com

RÉFÉRENCES COULEUR

Zone de protection 1 C100%

Zone de protection 2 Zone de protection 3

Marca Gas Natural Fenosa Versión principal en color

About 1000 individual members*

*at 30-04-2015

AFG The gas industry, an asset for France

Gas, a current asset for today and the future T

hrough France, Europe or worldwide, energy is increasingly becoming a major issue in today’s world. The new balances of power in nowadays world are a cornerstone for tomorrow.

Accessible, Affordable, Abundant: gas is an energy source with precious benefits in this new global configuration.

With this publication, we want to give you factual components, costed, and put an end to certain untruths that are being voiced here and there.

02 03

Did you know that, according to the International Energy Agency, natural gas, together with renewable energies, will experience the highest growth by 2035?

Did you know that, for 1 kWh of electricity produced, the accompanying CO2 emission is approximately 450 grams for gas, whereas it is more than 800 grams for coal - in other words over 80% of difference ?

Did you know that more than 600 biomethane production projects are currently being studied in France?

Whether in environmental, security of supply or economic development terms, gas has strong arguments to put forward.

With this publication, our ambition is to put forward and publicise these facts.

Jérôme Ferrier, Chairman, French Gas Association

Natural gas, an abundant and accessible energy source words almost 120 years of reserves at current annual natural gas production rates, which includes non-conventional gas reserves (shale gas, coal gas, compact tank gas, gas hydrates, etc.).

What is natural gas?

Natural gas is created from the breakdown of organic matter trapped in sedimentary rocks.

Gas production can create oil production as well.

The term «dry gas» is used, when it is produced alone or, «associated gas» when it is produced with oil. The gas can then be transmitted either by pipeline or in liquid form at -160°C (with a volume reduced by a factor of 600), by ships called «LNG carriers», depending on the distance and geographical conditions which separate the production and consumption locations.

Natural gas reserves are distributed throughout the world. More than 50% of gas reserves are located in Russia, in Iran and in the Middle East.

Non-conventional gas resources are located in other territories such as China, Argentina, Algeria or the United States.

According to the International Energy Agency (IEA), energy needs are likely to increase by 40 to 50% by 2040. During this same period, gas is likely to represent approximately 25% of the world’s energy mix, compared with 21.3% in 2012.

Abundant, widely distributed resources Reserves termed technically recoverable amount to some 400 terra cubic metres of gas, in other

Performance of the gas chain, source of accessibility Production in the sea Treatment

Liquefaction plant LNG tanks

Natural gas deposit

Liquefied natural gas

Unloading

Loading terminal Residential

Treatment

High P

ressure

Cross-section of an aquifer storing gas

Gas Pip

eline

Electricity generation

Local rules

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Heavy industry

Pip eli

Seasonal and peak storage

Regasification

as

Ground production

Reception terminal

LNG

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Loading

Rotating LNG tankers

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Small companies and businesses

Distribution (Source: Tigf)

The main gas-producing countries Billion cubic metres United States Russia Iran Qatar Canada

Norway

2013

Saudi Arabia

2012

AFG The gas industry, an asset for France

China

Netherlands Algeria Indonesia Turkmenistan Malaysia Uzbekistan Egypt 0

100

200

300

400

500

600

700

(Source: Cedigaz)

04 05

World gas resources (2013) 143

Eurasia and Eastern Europe OECD Europe OECD North America

2

48 46

4 13

25 20 11 15

7 11 Middle East

Africa 39 0

124

52

10 Asia / Pacific

Latin America 40 0

15

0

31

9

4

53 21 21

Coalbed methane Tight gas Shale gas Conventional gas (Source: IEA - International Energy Agency : World Energy Outlook - November 2014) Units: trillion cubic metres

43

Secure gas supplies in France and in Europe Considerable diversity of supplies The France supply portfolio is diversified. Norway is the largest supplier, with 40% of imports.

Russia (20%), the Netherlands (16%) and Algeria (12%) come after.

The «Others» category in particular includes Qatar, Trinidad & Tobago, Libya and North Sea gas.

In addition to its domestic production, which covers 34% of its gas demand, the European Union is continuing the diversification of its portfolio to reduce its energy dependence.

The principal gas supplier of the 28 countries of the European Union is Russia (44%), followed by Norway (33%).

Sources of natural gas supplies in France (2013) Russia • 20%

Supplying Europe in gas, other than domestic production (2013) Trinidad and Tobago • 1%

Norway • 40%

Russia • 44%

Qatar • 7% Nigeria • 2% Algeria • 11% Netherlands • 16% Algeria • 12%

Others • 11,8% Egypt • 0,2%

(Qatar, Trinidad and Tobago, Libya...)

(Source: SOeS, Bilan de l’énergie 2013)

Libya • 2% Norway • 33%

(Source: BP Statistical Review 2014)

Liquefied natural gas, a plus for security of supplies in France and in Europe Liquefied natural gas (LNG) is natural gas which is liquefied by chilling. This transformation means it can be transported by boat from the production sites to Europe’s LNG tanker terminals. This liquefied gas is then either converted back into gas in the LNG tanker terminals (to be injected in the gas pipes) or transmitted by trucks to supply isolated sites not connected to the grid.

Currently meeting 9% of the demand, LNG should account for more than 30% of European natural gas consumption by 2030, according to GIIGNL*.

France has a long coastline, which at present houses three LNG regasification terminals with a total capacity of 21 billion cubic metres: Fos Tonkin, Fos-Cavaou and Montoir-de-Bretagne. A planned terminal is currently under construction at Dunkirk and should be functioning in 2016.

*GIIGNL: International group of liquefied gas importers

Map of LNG terminals in Europe Klaipeda Teesside Terminal existant Swinoujscie

Isle of Grain

Huelva

Rotterdam

Terminal en construction

Zeebruges Milford Haven Dragon

Dunkerque Capacité annuelle de regazéification en milliard de m3 30 15 5

Montoir-de-Bretagne Porto Levante ‘ Gijon El Ferrol

Extension

Fos Tonkin

Panigaglia

Bilbao Fos Cavaou

Sines

Marmara Eregli

Toscana ofshore

Barcelone Aliaga Sagonte Huelva

AFG The gas industry, an asset for France

Milford Haven South Hook

Revithoussa

Carthagène (Source: GIIGNL 2013)

Storage, the instrument to secure supply Compressed, the gas can be stored in different types of storage: • aquifers are naturally waterlogged porous rocks; their geological configuration is similar to that of deposits; • saline cavities are cavities hollowed out in layers of salt; • depleted deposits are former hydrocarbon deposits whose exploitation has been halted; • the gas can be stored overhead in LNG tanks.

Underground gas storage play a key role in ensuring the security of energy supplies: • in the event of a cold rush, they can make an immediate contribution to satisfying needs; • during longer periods of cold weather, they meet the majority of additional requirements; • storage is the best way to ensure an immediate supply of gas when extreme weather conditions hit the whole of Europe, and less risks of geopolitical and operational contingencies; • should there be a supply crisis, France has stored around 140 TWh of gas, which is equivalent to the total annual volume of imports from Russia and Algeria.

Storage facilities also play an important technical and economic role: • they supply 30% to 40% of French winter consumption; • they are also used to store surplus supplies of imported gas in summer; in the future, they will be used to store locally produced biogas.

France has: > 16 storage sites, including: • 4 saline sites • 11 aquifers • 1 depleted > The useful volume underground is 12,7 Gm3

06 07

Natural gas, a response to climatic and environmental issues The intrinsic qualities of gas in the service of the environment Gas is the primary energy which provides the best thermodynamic efficiencies and therefore the best energy efficiency. Almost all countries in Europe therefore use gas for hot water production and for heating.

Gas is the traditional, most friendly energy for the environment; fewer CO2 emissions, no particle or sulphur dioxide, no waste produced.

For example, for electricity production, a combined cycle gas-fired plant produces between 40 and 50% less CO2 than a coal-fired plant, and no dust.

An complementary energy for the development of renewable energies Besides its great flexibility of use and its storage properties, gas is used to develop sustainable energy solutions side by side with renewable energies.

At a centralized level the intermittent production of certain renewable electrical energies can be backed-up by using combined cycles that are very flexible in production and less costly in investment.

In residential buildings, the use of natural gas associated with renewable energies (ecogenerator, solar/thermal) guarantees energy performances in line with thermal regulations.

Gas will become green Gas will incorporate a growing biomethane component, usable with current infrastructures.

By 2020, between 3 and 9 TWh could be injected into the grids. 600 injection projects are currently being studied by the systems operators.

Biomethane can also be recycled as fuel outside the systems. In the longer term, Power-toGas technology, converting surplus renewable electricity into gas could introduce greater flexibility into the power grid since gas, unlike electricity, can be stored.

GRTgaz estimates that, by 2050, 15 to 50 TWh of electrical energy could potentially be stored by converting it to hydrogen or synthetic methane, using Power-to-Gas technology.

Fuel gas, a transport option Gas solutions will play a major role in developing sustainable mobility for road, river and maritime transport.

Natural gas for vehicule (NGV) is a technically tried and tested, cost-effective option that provides huge benefits for the urban environment. For more than 25 years, large numbers of buses, waste collection vehicles and light municipal vehicles have been running on NGV. 40% of cities with over 200,000 inhabitants use NGVpowered vehicles. With a reduction of 25% in CO2 emissions compared with petrol, 50% NOx emissions compared with diesel, an almost total lack of particles and noise limitation, NGV is particularly suited to fight local pollution.

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The use of LNG in transport vehicles is equally promising. In maritime transport, a new and more stringent regulation covering sulphur dioxide discharges is encouraging shipowners to switch to using LNG. For its autonomy, hauliers and shippers are extremely interested in LNG. BioNGV and bioLNG sourced from biogas production can also be used as fuel.

From a regulatory perspective, the European directive covering alternative fuels stipulates the establishment of a network of refuelling stations in France and in Europe.

AFG The gas industry, an asset for France

Biomethane is treated biogas, that can be injected into the grid and mixed with natural gas or used as fuel.

Biomethane can be produced from a wide range of fermentable resources: agricultural waste, waste from the food and feed industry, urban waste, green waste, or materials such as sludges from urban purification stations. It can also be obtained by catchment in a Non-Hazardous Waste Storage Installation.

08 09

Efficient and innovative energy Gas is a primary energy source that does not need to be transformed before being distributed to consumers. It is possible to achieve high levels of energy performance in buildings and in industry.

Furthermore, gas is competitively priced and environmentally friendly.

New products for direct uses The industrial gas sector is permanently innovative. Gas systems combined with renewable energies (solar thermal, photovoltaic), or electricity (hybrid heat pumps) can satisfy heat needs as close as possible to consumption, which is the most effective energy solution for contributing to the development of renewable energies and an appreciable reduction in greenhouse gas emissions.

The modulating boiler, which is a condensation boiler, with a stable performance regardless of the load factor, achieves consumption reduction of at least 20% in both the new and existing versions and can be associated with renewable energies.

The hybrid boiler combines a condensation gas boiler and an electrical mini-heat pump (French abbreviation - PAC) rated at 3 kWh. This solution leads to a primary energy saving of up to 15% and reduces CO2 emissions.

Energy systems in the residential sector

Gain from using renewable energies + 50%

Primary energy efficiency

+ 40%

Renewable energy coupling (thermal solar, photovoltaic, etc.)

Fuel cell

+ 30%

150% +20% 130%

110%

Hybrid boiler Gas absorption heat pump

Ecogenerator

Gas engine heat pump

Condensation boiler 90% Electric heat pump

Regulatory ban in the existing system

Low temperature boiler

70%

Expected technical maturity (products available and recognized under the regulations, existing system)

Standard boiler 50% Direct electrical system 30% 1990

2000

2010

2020

2030

(Source: GrDF)

Decentralized combined electricity and heat production is a particularly effective solution which smooths electrical peaks, thanks to the synergy of gas and electricity systems.

Cogeneration is a mature and widely used technology. In industry, the use of cogenerations improves energy efficiency of the processes, which contributes to economic competitiveness.

In residential building and light service industries, ecogenerators can replace boilers. The energy gains and falls in CO2 emissions are approximately 20%. Energy produced locally allows to respond to consumer needs.

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ÂŤSmart gridsÂť for consumption reduction The rollout of the smart meter (Gazpar) was decided and will be organized between 2017 and 2024. 11 million of gas customers will be able to benefit from a meter which will supply them with consumption data updated, twice a day, for an invoice based on actual consumption and managed consumption.

(c) GDF SUEZ - Abacapress Reinhardt Stephen

AFG The gas industry, an asset for France

The future for combined heat and electricity production

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10 11

Gas market: diversity and competition An increase in gas consumption worldwide The global gas market is growing, and is most strongly marked in Asia (China, South Korea, Japan) and North America, with a total demand of around 3500 billion cubic metres. In 2014, Chinese gas demand increased by 4% (source Cedigaz).

The World Energy Outlook 2014, published by the International Energy Agency, states that gas will be the only fossil fuel for which demand will increase by 2040, whatever the demand scenario adopted.

During this period, growth will be particularly strong in China and in the Middle East.

Global gas demand, according to the IEA’s WEO 2014 scenarios Billion cubic metres 6 000

Current policies scenario New policies scenario

5 000 450 scenario

4 000

3 000

2 000 1990

2000

2010

2020

2030

2040

A new dynamic in the European market Gas consumption in Europe has settled at about 500 billion cubic metres each year. Gas covers more than 23% of primary energy needs. This demand is very sensitive to climatic variations. There is a strong potential for gas to achieve climatic and environmental objectives in Europe, in particular through electricity production and mobility use.

Natural gas consumption by sector, EU-28 in 2013 Transport • 0,4%

Other uses • 2,6%

Electricity production • 23% Residential and service sectors • 43%

Industry • 31% (Source: Eurogas)

France, an open market The French gas market represents 11.5 million customers. Total annual consumption amounts to almost 500 TWh and accounts for 15% of the national energy budget.

Gas is used for domestic hot water production, residential and industrial heat production, electricity production and transport.

Demand in France by sector (2013) Other (including transport) • 1% Energy sector (including electricity production) • 17%

Services sector • 18%

Industry • 31% (Source: CGDD -2015)

The gas market in France can be considered as open.

Almost 200 suppliers have a supply licence approved by the Minister for Energy. The CRE [Energy Regulation Commission], for its part, talks of 25 active suppliers covering the entire market (residential and industrial customers). Among these suppliers, 7 consider their core business as the residential sector and make so-called market offers which leave open the option at any time to revert to the regulated tariff.

At end 2014, 74% of all gas consumed in France was bought through market offers. The opening is more obvious on the non-residential market (industrial customers), where 90% of volumes are bought through market offers.

Offer distributions (as at 31 December 2014)

36%

20%

26%

34%

69%

46%

14%

30%

64% 44%

Alternative supplier market offers Historic supplier market offers Regulated tariff offers

17% Non-residential Non-residential transmission distribution sites sites (161 TWh) (180 TWh)

Residential sites (125 TWh)

All sites (466 TWh)

(Sources: GRT, GRD, Fournisseurs historiques - Analysis : CRE)

Tariffs Since 1st July 2007 and the opening of the market, consumers have had two options: ither to contract offers at the regulated tariff applied by the present historical supplier e before the markets were opened up. This tariff is calculated on the basis of a formula which reflects the costs of the gas chain. It is proposed by the historical supplier and fixed by the Government after receiving the CRE opinion. The regulated tariffs for the non-residential consumers use will be progressively cancelled.

• or to subscribe to a contract proposing a market offer with the supplier of their choice.

A support system for customers in a precarious energy supply situation was also set up through a social solidarity tariff.

•

AFG The gas industry, an asset for France

Residential sector • 33%

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The enormous gas industry contribution to economic development Jobs The natural gas sector accounts for approximatively 160 000 direct and indirect jobs1.

Jobs are concentrated mainly in the maintenance sector, with 68,500 direct jobs. Sub-contracting jobs should account for a further 10,300 jobs. The infrastructures (25,200 jobs) and equipment manufacturing (20,500 jobs) sectors are also important employment.

Jobs in the gas system by sector in France Others • 2%

Installations and maintenance • 53%

Upstream and marketing • 10%

Infrastructures • 19% Equipment manufacturing • 16% (Source: Engie, ex - GDF SUEZ, 2012)

Around the world based corporations Various French companies operate over the whole of the chain and outside mainland France.

Energy groups Total is one of the primary international oil and gas companies and world no. 2 in solar energy with SunPower.

Operating mainly in the natural gas prospecting/ production sector, the group trades in this business in over 40 countries. In 2014, Total was the number one on the Paris Stock Exchange, with capital stock of 101.4 billion euros and numbered 100,000 employees in over 130 countries.

Engie2 is a global player in the energy sector. On the natural gas market, Engie is a mid-streamer, which supplies, transports and distributes natural gas. The group also operates in the LNG segment

1 2

with a fleet of 14 LNG tankers and LNG terminals.

Engie is the primary gas supplier in France and the primary provider of storage capacity in Europe.

Engie has 152,900 employees worldwide and achieved revenues in 2014 of 74.7 billion euros.

The EDF Group operates over the whole natural gas chain, mainly in Europe. Gas is a key component of the energy mix for EDF. The Group’s presence in the natural gas sector is explained by the need to supply its power stations with gas and to supply its customers with a dual gas and electricity energy offer.

With a workforce of 160,000 worldwide and a turnover of 72.87 billion euros in 2014, EDF counts among the world leaders in the energy sector.

Jobs in the gas sector in France, Assessment of the direct and indirect jobs in the gas sector in France, GDF Suez report, 20th February 2012 GDF SUEZ has been renamed Engie since Friday 24th April 2015.

Gaztransport & Technigaz (GTT) is a French engineering company specialising in the design of cryogenic membrane confinement systems for transport by boats and storage of LNG on land

and in the sea. GTT is the leader in its sector with, between 2010 and 30th September 2014, more than 80% of global orders for LNG tankers. GTT is owned 40% by Engie and 10% by Temasek (investment fund based in Singapore).

Geostock is a group specialising in underground storage of liquid or liquefied gaseous hydrocarbons.

The company operates in the storage engineering, construction and operation consultancy sectors.

The Geostock Group includes a holding company, Geostock Holding, in which the shareholders are Entrepose Contracting - Vinci Group - (90%) and Total (10%). 550 employees work in the company.

Local economic development The extensive deployment of gas infrastructures across mainland France and the decentralised production resources put the gas industry at the heart of French territory. The gas service in mainland France, including its business areas, is a significant economic lever. As the distribution systems are owned by local authorities, operators such as GrDF and local distribution companies develop their industrial strategies in a close relationship with these partners, in order to take concerted actions as close as possible to local realities.

The French gas market, at the crossroads of Europe At the junction between European north and south, France’s positioning gives it the opportunity to help with traffic flows between these areas.

In addition, its coastlines (both Atlantic and Mediterranean) give it access to LNG flows from Africa and from the Middle East. Strengthening of the gas interconnections is a key imperative for the fluidity of the single European market. French infrastructures play a crucial role in the pursuit of this dynamic.

Investment projects aimed at improving the markets integration are various, as witnessed by the ten-year plans for the operators of the GRTgaz and TIGF transmission systems, who are putting up 2 billion euros for investment.

Distribution system operators GrDF in a few numbers: > 11,300 employees > 258 TWh of natural gas moved in 2014 (real climate) > 700 million euros for investment, including 400 million for safety > GrDF operates, maintains and has developed the largest system in Europe, with 196,940 km of piping.

Other system operators: > 22 local distribution companies > Antargaz

Infrastructures in the heart of mainland France > 80% of France’s population has a gas service, in other words some 9,600 districts > 8 entry and exit points > A 37,500 km transmission system > 33 compression stations > A 200 000 km distribution system

AFG The gas industry, an asset for France

Engineering Technip is a world leader in project management, engineering and construction for the energy industry and therefore natural gas.

The Group specializes in three business segments: subsea (underwater construction, design, manufacture and supply), offshore (platform and floating liquefaction unit) and onshore (gas liquefaction process). Technip has a headcount of 38,000 in 48 countries, with a10.7 billion euros turnover in 2014.

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Graphik Design: Peggy Sevcik - www.design-graphik.fr

AFG 8 rue de l’Hôtel de Ville 92200 Neuilly-sur-Seine FRANCE www.afgaz.fr