BLUE FUEL Gazprom Export Global Newsletter April 2012 | Vol. 5 | Issue 1
To Our Readers:
Mission Not Impossible Page 4
Sakhalin Energy: Setting New Goals Page 6
Subsidies for Renewable Power Sources in EU Cost Almost Fifty Billion Euro Page 14
www.gazpromexport.com | newsletter@gazpromexport.com +7 (499) 503-61-61 | comm@gazpromexport.com © Gazprom Export
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BLUE FUEL Gazprom Export Global Newsletter
April 2012 | Vol. 5 | Issue 1
In this issue April 2012 | Vol. 5 | Issue 1 To Our Readers: Mission Not Impossible ................................ Pg. 4 Looking Into 2012 with Moderate Optimism............................Pg. 5 Sakhalin Energy: Setting New Goals..........................................Pg. 6 Building Global Shipping Capability for Trading and Future Export Projects of Gazprom...........................................Pg. 8 Wintershall is at Home in Russia............................................... Pg. 9 Achimov Gas from a 4-Kilometer Depth................................. Pg. 11 G4T: Gas for transport in the Czech Republic......................... Pg. 12 Subsidies for Renewable Power Sources in EU Cost Almost Fifty Billion Euro..........................................................Pg. 14 Innovative Partnerships to be Found....................................... Pg. 16 Algerian Energy Policy: From Hydrocarbons to a Diversified Mix of Energy.........................................................Pg. 18 Natural Gas Growing Role in Global Energy Mix.....................Pg. 20 Christmas Ball for Children at Hofburg................................... Pg. 21 A Touch of Fantasy................................................................... Pg. 21 Instant Photo Truth .................................................................Pg. 22 Blue Fuel Receives Best Corporate Media 2012 Award ..........Pg. 22
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TO OUR READERS:
Mission Not Impossible Ask yourself: is there currently a viable alternative to the pipeline gas reliably delivered to Europe under Gazprom Export’s contracts? The answer is obvious. Results from the past year clearly show that the spot market is not yet sophisticated enough to cope with a high surge in demand – and that Gazprom Export continues to be a reliable and secure supplier to Europe. Renewable sources of energy? A good cause. But they are still technologically immature and therefore are expensive, and they only survive thanks to huge subsidies from European taxpayers. Gas at spot trading platforms? A good thing. But since this gas is physically insufficient in Europe, the main flow goes to more favorable premium markets in Asia. This was proven in early 2012 when spot markets failed to effectively address the surge in demand due to unseasonably cold weather across Europe. Instead, it was the security of oil-linked contracts that ensured Europe's energy needs were met. Therefore, it is fair to argue that spot markets merely play the role of a "supporting actor," as they would say in the theatre. While spot performs the role of a balancing market, unlike long-term contracts, it does not ensure energy supply security. The positive balance in 2011 was predetermined by this. Despite the slow post-crisis economic recovery in Europe and the CIS, Gazprom Export has significantly increased supply – with about 150 bcm of gas exported to Europe last year. The main growth was in Western European countries – 13.5 percent more compared to the year 2010. Moreover, we have regularly found ourselves helping our neighbors in need. Who compensated the energy deficit for Turkey when there were interruptions in Iranian gas supplies? Gazprom Export. Who came to the assistance of Italy when it stopped getting its North African gas due to the civil war in Libya? Gazprom Export. The results achieved confirm that our development strategy is correct. We are increasing LNG production. This new product increases the flexibility of supply and availability of premium markets. We are diversifying our customer base and opening up new markets in Asia. The pipeline project in South Korea passing through North Korea no longer seems like a pipe dream. Moreover, we are not forgetting Europe, to where we plan to bring the second line of Nord Stream and build the South Stream gas pipeline. We have an important, fascinating and complicated mission ahead. But the undoubted success of 2011 gives us confidence that succeeding in this mission is possible!
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Looking Into 2012 with Moderate Optimism “Blue Fuel” interviewed Dmitry Averkin, the newly appointed Head of Department of Gas Export to North and Southwest Europe.
is the system of long-term contracts. No major player doubts it, as it is exactly these contracts that provide the security of supplies for consumers and the security of demand for us the suppliers. Blue Fuel: How does your department view the results of 2011? How do you see the new 2012?
Blue Fuel: The department you are leading provides for gas deliveries to a number of key countries, including Germany, Italy and France. How do you perceive the current state of the gas markets in this part of continental Europe? Dmitry Averkin (DA): The words “rapidly changing” could characterize it in the best brief way. The gas market is in no way constant although its fundamentals are the same. What sets today apart from the past is that new trends keep appearing. When I came to the gas business almost 18 years ago, it was stable and predictable for years ahead, and they used to call it the “oldies’ market” behind our backs. This had certain advantages, however, especially for our industry, which was always calling for predictability, to securely plan the deliveries and, accordingly, put long-term investment into production, infrastructure etc. Today, the market is everything except the “oldie”. Many things have started moving, the market has gained new momentum, and the spirit and behavior of the players has become more dynamic. And yet, I do not feel there is a shared, uniform and unambiguous understanding of the current situation among the gas market players in Europe. Although today’s trends are backed by certain objective developments, some purely political decisions taken on the EU level are politically motivated. To what extent the reasons behind these steps are objective and marketmotivated, is a separate issue. Blue Fuel: Do we have a clear understanding of where the market is moving to? DA: Absolutely, Gazprom Export has its vision on the future development of the European gas market. We keep pace with it, keep looking for the ways to adapt to new realities, seeking to protect our interests and more, provide for the right balance between the interests of buyers and consumers. The key issue is that within the new dynamics, the backbone of the gas business in continental Europe remains the same – it
DA: Last year was complicated enough. We conducted difficult negotiations on the review of certain contract clauses with a number of partner companies. We find it satisfying that in late 2011 and early 2012 we managed to reach agreements with many of them. This process is yet ongoing, and reflects the willingness of both parties to adapt to market changes, while preserving the balance of interests. Along with that, the last year was successful enough for us in regards to deliveries. All in all, Gazprom Export in 2011 supplied 150 bcm, compared to 138 bcm in the previous year. These results were achieved despite lackluster economic growth in the EU countries which are our biggest clients. Considering the problems in the Euro zone and corresponding fears, it is clear that the growth of offtake is a sign of confidence in Gazprom Export as the supplier, and in our contracts as the reliable basis of the trade. In 2012, we expect that the gas offtake under Gazprom Export’s contracts will not be lower than in 2011, at least. We are conservatively optimistic in that. At the same time, we continue negotiations on pricing where we have not yet found any compromise solutions with the partners. We are optimistic on the outcome and hope that such solutions will be found this year. Blue Fuel: How are the pricing negotiations moving on? With some companies, arbitration procedures were initiated… DA: Appealing to arbitration does not mean that the parties do not wish to find a compromise along with it. One does not exclude another. We could take such processes as parallel. These fully correspond to usual regular procedures foreseen in the contracts. Sometime, we initiate this proceeding, sometimes it is done by our clients, the same happens with other suppliers and their clients, in other industries. At the negotiations on pricing we naturally defend our interests, based on certain principles. Every change to the contract should reflect the real moves on the real gas market, and not just theoretical, or wishful thinking. The compromise is always reached when both parties move towards each other, both Continues on page 6
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Looking Into 2012 with Moderate Optimism Continued from page 5
need to make certain concessions so that the balance of interests is not distorted. Blue Fuel: Does the fact of such delicate negotiations affect relations with European partners? DA: In most of the cases it does not. Long term partners, especially the major ones, remain good partners and friends. However tough the negotiation may be – at the end we will stand up and shake hands, so to say. And I would stress that the idea is simple – you can have different views on the various details, but still, both parties share common regard on the principles of gas business. Our relationships are backed by the long-term contract basis, and we share the view that such contracts are the only model that can provide for security of supplies for years ahead.
Blue Fuel: On a final note, you have been recently appointed Head of Department of gas export to North and Southwest Europe. What are your first impressions? DA: This move happened while the European gas markets were experiencing the dynamic changes we mentioned above. Although I’ve been in the industry for 18 years and most problems I have to deal with are not new to me, this appointment is no doubt a new challenge and a call for new charges; it suggests more responsibilities. But there is another issue I consider important: our work and its success depend not on my personal input but on teamwork and joint efforts. I am delighted that the department's team continues to be well performing and as highly effective as before.
Sakhalin Energy: Setting New Goals Andrei Galaev, Chief Executive Officer of Sakhalin Energy Investment Company Ltd.
Russia’s first LNG plant celebrated its third anniversary in February. Looking back on that important phase in Sakhalin Energy’s history, the company reflects with satisfaction on the progress it has made, moving from construction to sustainable production and “testing in service” both the construction quality and the validity of the design and engineering solutions. Now Sakhalin Energy has set new goals for itself. The past year was a test for Sakhalin Energy to make sure the company was on the right track. Based on safe, reliable and smooth operations, the company succeeded in achieving excellent production performance. Our LNG plant reached and even exceeded
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its design capacity, producing over 10.6 million tons of LNG in 2011. Our buyers received 162 cargoes of LNG, or 12 cargoes above plan (as a reminder, one standard cargo is 145 tcm of LNG, which is equivalent to 87 mcm of natural gas). During the past
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three years, Sakhalin Energy has delivered more than 400 cargoes of this new-for-Russia energy source to its buyers. The company is steadily and surely moving towards its mission of becoming a premier energy source for the Asia-Pacific region recognized for its safety, operational excellence and reliability. Sakhalin Energy is committed to conducting its business in an ethically, socially and environmentally responsible manner. This approach has earned us trust and a strong reputation with our buyers. Furthermore, in 2011 Sakhalin Energy proved itself as not only a visible player in the LNG market, but also a significant element of ensuring energy security in Asia-Pacific. This was demonstrated by our quick response in supplying additional LNG to Japan following the disastrous earthquake in March 2011. Last year, Sakhalin Energy shipped 34 above-plan LNG cargoes to Japan, part of which were diverted from other buyers, while nine were purely upside cargoes. Our high production levels were a result of our operational excellence initiatives and successful LNG debottlenecking efforts. Debottlenecking is an international practice aimed at process optimization and equipment adjustment after the start of an LNG facility, and it usually results in a 5-10% increase in the LNG production. We see reliability as one of our top priorities. In 2011, Sakhalin Energy conducted its first integrated shutdown for the maintenance and repair of gas lines. It was the most challenging planned shutdown operation since the start of the Phase 2 Project. It was completed successfully thanks to the careful planning and safe operation of hundreds of company and contractor staff. Reliable supplies rest on a stable and robust production basis. In 2011, Sakhalin Energy continued its drilling operations at the Lunskoye field and the Piltun area of the Piltun-Astokhskoye field. We also completed a two-year rejuvenation program on the Molikpaq platform in the Astokh area, which will enable upgrades and work-overs on the existing wells, as well as the drilling of new ones. Large-scale well drilling, water injection and water cut reduction programs will be continued in 2012. Our key priority is safety, and world-class safety performance has become our trademark. We pride ourselves in our extremely low injury rate, which is due to our persistent focus on
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enhancing the corporate safety culture, including road safety. In terms of process and industrial safety, Sakhalin Energy enjoys a year-to-year superiority as the best “oil produced/oil spilled” performer: having produced 44 million barrels, we spilled only 0.38 bbl in 2011. Calling this performance outstanding would be no exaggeration. An important driver of the company’s successes is our operational excellence program launched in the end of 2010. We have identified five key areas for the purpose of operational excellence delivery: total reliability, world class field development and well and reservoir management, best contractor management, lean execution and excellence in human resources. In each area we make use of key tools to achieve our purpose and enhance the operational excellence of the company. For example, our lean execution policy provides for the use of such well-recognized methods as Justin-Time, the Kaizen approach, seven wastes analysis, etc. The purpose of any business is to derive an economic benefit. Early in the Sakhalin-2 development, there was a heated debate in Russia as to whether or not our project could be considered beneficial for the Russian Federation. But today, there is good news: in 2011 alone, prior to the Sakhalin-2 project reaching its full cost recovery, the Russian Federation received from the project more than a billion dollars of total payments. In the first half of 2012 we expect the project to reach full cost recovery. This means that production sharing will start earlier than expected and Russia will start to receive bigger revenues. Finally, in 2012 Sakhalin Energy has made growth a priority. We will make every effort to maximize the value of the Sakhalin-2 license area and infrastructure, while minimizing exposure to risks. Significant volumes of hydrocarbons within our two fields are not yet covered by existing plans. Currently the South Piltun opportunity in the Piltun-Astokhskoye field is being considered for further development of Sakhalin-2. The decision on this will be based on the assessment of all technical, environmental and economic aspects of the potential development. Apart from the South Piltun project, we are also looking at other growth opportunities. Whichever option we select it will be aimed at stimulating the efficiency of the Sakhalin-2 Project and maximizing its value.
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Building Global Shipping Capability for Trading and Future Export Projects of Gazprom Nikolai Grigoriev, GM&T Director of Global Shipping & Logistics
The foundation for GM&T’s Shipping & Logistics (S&L) business unit was first laid in 2008 when we began offering professional and cost-effective shipping and cargo solutions, first in LNG and then across many types of commodities. The S&L business is effectively built around five teams: Chartering, Commercial Operations, Technical and Marine Assurance, Shipping Operations and, most recently, the Gas For Transport business development team. Our team is now more than 20 people strong, combining experience, energy and ambition and working on the ‘24/7/365’ basis out of London and Singapore. In 2011 our core operation revolved around a fleet of five modern time-chartered LNG vessels: “Clean Power” and “Clean Energy” from Dynagas (Greece), “Neva River” from K Line (Japan), “LNG Pioneer” from MOL (Japan) and “Stena Blue Sky” from Stena Bulk (Sweden) and one LPG vessel “Gas Evoluzione” from StealthGas (Greece). Together they sailed more than 300,000 nautical miles and made more than 100 port calls – all accomplished with zero injuries or environmental incidents. The S&L team managed more than 2 million tonnes of liquid cargoes (LNG, LPG and petroleum products), including the GM&T’s 100th cargo of LNG. The credibility of Gazprom in tanker shipping is extremely important, which is why we are active members in the leading maritime industry organisations - Oil Companies International Maritime Forum (OCIMF), the Chemicals Distribution Institute (CDI) and the Society of International Gas Tanker and Terminal Operators (SIGTTO). Furthermore, to ensure the robustness of our processes and procedures and to be accepted by our counterparties, we have introduced a quality management system in S&L which is certified under the ISO 9001:2008 standard by Lloyd’s Register Quality Assurance. 8
We also achieved a number of “firsts” for the group last year - signed our first long-term charters for LNG vessels that will be built in South Korea in 2013-14, chartered very large gas carriers (VLGC) for the transportation of LPG and carried and managed the first cargoes traded by GM&T in LPG, gasoline, naphtha and gas condensate. We also saw the first participation of Russian officers on our chartered LNG ships. In 2010 we launched a partnership programme with the Admiral Makarov State Maritime Academy in St Petersburg, which resulted in 16 Academy cadets receiving sea-going practice on our chartered LNG vessels to-date. Ten of these cadets returned to our LNG ships after graduation as junior navigation and engineering officers. As part of our “Russian content” initiative we sponsored the creation of the Tanker Operations laboratory at the Navigation Faculty of the Academy (with support from Transas, a Russian digital navigation equipment company). The laboratory’s facilities and courses with Capt. Baskakov, the GM&T Professor of Tanker Operations, have been extremely popular with cadets. Moreover, we have facilitated the creation of long-term partnership programmes with the Academy and the world’s leading classification societies such as the American Bureau of Shipping and Lloyd’s Register and Russian Maritime Register of Shipping. These, and many other initiatives under development, are geared towards developing a cadre of first class Russian tanker shipping experts who will command the tanker fleets in Shtokman, Prirazlomnoye and other Russian LNG and oil export projects in the future. Everything we do is about adding value. On the systems front we are now using IMOS6, one of the world’s leading shipping operation system, which has considerably enhanced our quality, reliability, value preservation and cost management by offering real time fuel curves, voyage reports and vessel tracking. Combined with our global hub agency system GACShip and GM&T’s own SAP system, this program has really taken us to the next level. The active
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cargo management and assurance activities of our Commercial Operations team contributed to substantial savings and efficiencies for the trading portfolio in 2011. The S&L team works in a real spirit of openness and collaboration. Sharing our knowledge benefits with our colleagues in Gazprom Export. We monitor all the freight markets GM&T is currently involved in – from LNG to petroleum products and LPG and distribute the market information through our “GM&T Freight Weekly.” Having already supported several Gazprom Export initiatives, such as shipping helium by trucks from Orenburg to customers in Western Europe and taking the first steps in the development of Russian rail logistics, we invite colleagues to throw us any logistical challenge – whether it’s a new commodity or a new mode of transport! The delivery of the transportation solutions, cargo management and assurance is at the heart of our offering and we hope to see our competencies and capabilities acknowledged and used increasingly by the Gazprom group. The uniqueness and flexibility of our platform offers limitless volumes in terms of logistics – particularly maritime, but we can also add land-based capabilities if necessary. It is no exaggeration to say that we thrive on partnerships and collaboration. For example, we have a very strong relationship with our LNG trading desk. Since S&L and LNG trading were launched almost concurrently in 2008 we’ve evolved and grown together and jointly built up a global LNG trading and shipping portfolio. This provides us with unique flexibility – and a distinct advantage over
our competitors who may not have vessels available. Entering LNG shipping deals “ahead of the pack” in 2009-10 allowed us to secure competitive shipping, which now supports our trading operations. Without the support from our traders back then – who indicated the need for vessels – we couldn’t have achieved this. We also work hard to forge external alliances. We have built a strong relationship with our partners at the Sakhalin Energy Investment Company (SEIC). For the last three years we have received LNG from SEIC under long-term contracts and have sub-chartered our LNG vessels to the company, supporting their requirement for additional ships capable of working in the harsh winter/ice environment. We have worked with Gazprom Export and Gazprom from our first day and will continue to actively share our expertise with the aim of making our S&L function the “platform of choice” for the group’s multi-commodity trading and export projects . We also expect to see our capabilities used in developing small scale liquefaction and LNG export projects from North-West Russia for the highly prospective LNG bunkering and natural gas vehicle markets in Europe and beyond. The outlook for S&L is extremely positive. We expect to continue growing and hope to see greater demand for our activities – especially in support of new commodities and projects. All these are complex tasks, but we are confident that we have the team, the systems and the capabilities to take them on.
Wintershall is at Home in Russia
By Mario Mehren, Member, Wintershall Board of Executive Directors Mario Mehren is responsible for the new Russia division of Germany’s largest producer of crude oil and natural gas, Wintershall. In the interview below, he talks to Blue Fuel about the importance and success of the company’s activities in Russia. In 2006, he became Vice President of finance and information at German company Wintershall Holding GmbH, responsible for the “Finance & Russia” Board department. In October 2011, he was made a member of the Board of Executive Directors, where he is responsible for all the company’s Russian activities. Prior to all this, Mehren worked for Wintershall’s parent company BASF for many years. He has a graduate degree in business from Saarland University. Blue Fuel: Wintershall is active in many countries round the world, but so far none of these have been represented by their own board division. Why has an extra board division now been created for the company’s Russian activities?
Mario Mehren (MM): Our Russian activities go back many years and have been growing continuously, which is why we took the decision to bring all our Russian activities together and combine them with the Nord and South Stream pipeline shareholdings in their own board division. Continues on page 10
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Wintershall is at Home in Russia Continued from page 9
We have been working closely together with our Russian partners Gazprom and Lukoil for more than 20 years. During this long period our activities have evolved into comprehensive cooperation along the entire value added chain: from upstream exploration and natural gas production in West Siberia to transport and sales in Germany and other European countries. Today our Russian projects make a substantial contribution to Wintershall’s financial success. Last year in particular represented a true milestone in our German-Russian cooperation: we brought the Nord Stream pipeline on stream together and signed the agreement to participate in the South Stream pipeline, as well as the agreement on the planned asset swap with Gazprom. Blue Fuel: Where is this division based and how did you come to join it? MM: The Russia division, with its excellent team, is based in Moscow; this makes sense to ensure geographical proximity to its activities and partners. As far as my role is concerned, I have been closely involved in many of our current projects for many years, partly owing to my previous work in the "Finance & Russia" division and my regular business trips to Russia, and partly because I am a member of the supervisory board of Wintershall’s Russian joint ventures. I was also involved in the recent expansion of its cooperation with Gazprom. Blue Fuel: Which Russian joint ventures are Wintershall involved in and what is the basis of these partnerships? MM: We have several joint ventures with Gazprom and other Russian companies. Our oldest one is Wolgodeminoil: there, we have been exploring and producing crude oil near Volgograd with Lukoil for 20 years. In 2003 we founded the joint venture Achimgaz so that together with Gazprom we could produce natural gas in the Achimov formation of the Urengoy reserve in West Siberia. Then, we also began cooperating with Gazprom in 2007 in the West Siberian natural gas deposit Yuzhno Russkoye. Additionally, 10
just recently we agreed to develop another two blocks together with Gazprom. In all three projects we work hand in hand with our Russian partners. The often extreme climate and the complexity of the rock formations there require both the experience and know-how of the Russian staff and the geological and technological expertise of the Wintershall staff – a perfect and successful partnership which is characterized by teamwork, trust and respect on both sides. Blue Fuel: Following the commissioning of the first line of Nord Stream, Wintershall has now started another major project together with Gazprom: a shareholding in South Stream. What does this new pipeline project mean for Wintershall and its partnership with Gazprom? MM: We very much look forward to this major new project with Gazprom. It is further evidence of our long-standing and successful cooperation based on trust. Our participation in Nord Stream has highlighted the fact that we have unique experience in the implementation of complex pipeline projects. Wintershall has a 15 percent shareholding in South Stream to develop the 900 kilometer-long offshore section. We will provide technical support for the project as well as financial support. This is another way in which Wintershall can make a key contribution to securing the energy supply in southern Europe. Blue Fuel: How is the project progressing, and what is the project’s current schedule? MM: We are very optimistic. At the end of December, we reached a key milestone when Turkey agreed to the pipeline’s construction through the Black Sea. The South Stream team is currently working hard to evaluate all the technical and economic aspects of the project and compile the project documents. The final investment decision is expected at the end of 2012 on the basis of these assessments. The planned annual capacity of South Stream is expected to reach 63 billion cubic meters. The project partners aim to bring the first of the four lines online by the end of 2015 and in this way strengthen supply security in Southeastern Europe.
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Achimov Gas from a 4-Kilometer Depth It is difficult to say what time of year is best to visit gas production sites in Western Siberia due to its formidable climate. However a group of German journalists braved the challenging weather to visit the facilities of Achimgaz – a joint venture between Gazprom Dobycha Urengoy and Wintershall – in late February. The extreme cold period in Europe and most parts of Russia was already a thing of the past, but memories of it, and the dramatically increased gas demands it caused, were fresh.
which is becoming more expensive. Located at a depth of about 4,000 meters, the Achimov layers are the hardest to reach in the Urengoy field. In order to tap them, about 90 days are spent drilling through a very complicated trajectory.
On the tour, reporters discussed with Achimgaz representatives how to meet demands under these conditions it was not an easy task since gas production is both complicated and expensive. While it is vital to Europe, it requires a lot of effort and money to transmit natural gas through thousands of kilometers of pipelines to households across the continent.
“Money is needed in order to develop new fields. Its spending can be planned only in the long term,” said Sergey Vlasov, general director of Achimgaz. Vlasov’s deputy from Wintershall, Ingo Neubert, added that “the cost of a well is growing much faster than its depth. To drill twice deeper does not mean to spend twice as much. Works are becoming much more expensive.”
As reporters toured the Achimgaz facilities, they learned that drilling is becoming increasingly difficult and costly due to changes in geological conditions. While there was once a time when gas was located “only” 1,200 meters deep in the ground, today the situation has changed and to find natural gas, extractors have to go deeper and deeper into the ground,
As a Handelsblatt report noted, “The fact that Gazprom and Wintershall drill so deep proves how hard the Russian natural gas giant has to strain itself in order to satisfy its energy-hungry consumers.”
While the work is difficult, Neubert acknowledged that it is important. “It is here – at the gas pads currently under development – that the foundations for future stable supply to European consumers are laid,” he said.
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G4T: Gas for transport in the Czech Republic Hugo Kysilka, Marketing & PR Director, VEMEX s.r.o.
About five years ago Vemex started exploring the potential for natural gas as a main fuel for mass transportation in the Czech Republic. At that time feasibility depended on the position of municipalities: petrol and diesel that had been preferred for supplying municipal transport systems for year. As a result, Vemex had to work hard to establish itself and the use of natural gas in local markets. By providing a stable supply of gas to consumers in 2009, Vemex built a solid foundation on which to enter the Czech market. That year saw the local gas fuel market grow dramatically, resulting in expanded fuel station networks and an increase in the expanding number of gasfueled motor vehicles. Gas, both ecologically friendly and economically attractive, kept winning the hearts and minds of the Czech drivers: 23 stations were built, gas-fueled vehicle number reached 1800, and, now, years on, annual consumption totals 8 mcm. This growth continues in 2010, with 32 stations, 2500 cars, and 10 mcm gas consumed on average. The decision made by Czech Fireguard service to allowed CNG cars into the public parking facilities contributed greatly to this growth. Before that, due to fire safety restrictions, no car fueled by natural gas was allowed to the park in public. At the European Business Congress meeting that took place in Prague in June 2011, gas
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as a motor vehicle fuel made one of the top headlines. Both the encouraging speech by Gazprom Head Mr. Alexey Miller, and the start of the “Blue Corridor” motor rally between Prague, Dresden, Wolfsburg, Berlin, and up to Greifswald—the message was clear for us that gas was gaining momentum. This gave Vemex courage and incentive to map out another new business goal, for a strategic development of gas use in transport, including both CNG and LNG. The agreement on strategic cooperation, signed with Lukoil almost the next day after the congress, was therefore a natural and expected move. The Czech subsidiary of the Russian oil producer Lukoil, who operates fuel stations in our country, and the Gascontrol of Havířov who possesses extensive expertise in gas use, became our natural partners. The signed Memorandum covered cooperation in developing CNG pumping facilities based on Lukoil’s stations. We made the first step by defining preferred locations in August 2011, starting from the highly industrialized Ostrava region, which suffers badly from pollution. Our target towns – Olomouc, Ostrava and Opava, which are located in the Moravian Silesia and host many heavy industries – rank as some of the most polluted regions of the country. The region is home to over 8 million people, including the nearby Polish localities. All of these factors
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combined – bad ecology, high fuel prices and dense population – determined our choice for this remote region as a starting place. We then faced an entirely new task – gaining permission to build a concrete gas fueling station at Ostrava-Muglinov, Bohumínská street. Despite the many challenges, we completed the project in six months. Our station is equipped with Swiss Greenfield compressor unit with up to 85-90 Nm3/h capacity and volume of 1 680 liters. The gas we sell at this station is bought under the long-term contract with Gazprom Export, and we settle our accounts with Lukoil on the same monthly basis. Presently, the station is serving about 10 cars a day. We will execute the same due diligence in determining future filling station locations in Opava and Olomouc in Q2 2012. We already plan to create another two stations in H2 2012 near Prague on the highways to Berlin and Munich. The 2011 results were encouraging. That year, the Czech Republic possessed 34 natural gas stations (compared to over 6500 petrol fueling stations), and the number of vehicles was approximately 3250, including three in Vemex’s company fleet. Overall gas sales in the sector reached 12.1 mcm. A small but significant contribution to that number is made by the Vemex inhouse fuelling facility that we installed at our office, for company fleet and guest cars. Our outlook is diverse. Apart from cooperation with Lukoil already mentioned, we are developing a variety of projects united by the idea to promote the natural gas in transport, raising gas consumption. Namely:
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Vemex’ participation in the first large-scale fuel station on the Prague-Brno highway. It will be served by the two compressor units of 250 cm productivity, and supplied with gas on the base of 15-years long-term contract. The station is to be commissioned in Q2 2012.
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We will also be involved in the construction of corporative fueling unit for the Wienerberger brick factory, including the following transfer of all company fleet from diesel fuel to CNG.
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We are joining efforts with the fueling station already operating in the Jinonice part of Prague that also brings marketing support and promoting Vemex as a CNG supplier. The idea got another momentum after the first eco-taxis, the three VW Touran Ecofuel on CNG, appeared in Prague in January.
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Vemex will participate in the tender to construct three CNG stations, announced by the Karlovy Vary region for the needs of public transport to improve environment in the towns of Mariánské lázně, Sokolov, and Cheb.
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The Czech Post (Česká pošta) is the first state enterprise that has showed interest in switching all its corporate fleet, 400 to 500 cars, to CNG. To serve its needs, we have entered discussions with all fuel station operators.
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And finally, LNG as a motor fuel. Compared to relatively known CNG, this fuel type is yet making its first steps, but its technological advantages for certain segments – like heavy trucks – can make it more economic even compared to CNG. We conduct talks with Ferox-Chart, an established supplier of cryo-equipment, carry out in-depth feasibility studies and are searching for partners.
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Subsidies for Renewable Power Sources in EU Cost Almost Fifty Billion Euro By Ilya Zalmanov, Gazprom Export analytical team
The issues of the environment, energy efficiency and lower carbon emissions have been on the European agenda for a long time, and have led to a growing interest in renewable energy sources. The EU’s ambitious plans to cut carbon emissions to 80% by 2050 were declared in the fundamental manifestos of the European Commission. Some results have been reached already: in the past decade, renewables’ consumption in Europe increased more than six-fold. Such a significant growth is mostly the result of the low basis figures. Both in absolute numbers and compared to the volumes of other energy sources consumed, these results are rather moderate. However, given current technologies, renewable energy is substantially more expensive for power generation than fossil fuels. Therefore, power generation from renewables would not be viable without government support through subsidies. Open sources, unfortunately, do not provide any extensive information on the scale and structure of such subsidies. This article is an attempt to estimate what “green” generation costs European taxpayers, and in what way and to what extent it distorts the fuel mix in a number of EU countries – including Germany, Italy, France, the UK, the Netherlands, Czech Republic, Austria, Slovakia and Bulgaria. Europe’s Energy Portal publishes the tariffs under which the state grid companies of EU countries purchase power generated from renewable sources both from corporate and industrial producers (http:// www.energy.eu/#Feedin). Unfortunately, open sources do not provide reliable information on the real shares of generation by every type of renewable (solar, wind power, biomass etc.) for every country. However, we determined the shares for every single type of generation, and the weighted average amount of 14
subsidies per unit, for every country (see Line 6 in the Table below) using data published by the European Network of Transmission System Operators for Electricity (ENTSO-E), European Wind Energy Association (EWEA), and the European Photovoltaic Industry Association (EPIA) on the installed capacity of every renewable generation type for 2010-2011. It’s worth noting that the weighted average amount of subsidies significantly exceeds electricity prices for end-users (here, we studied the group with the highest prices, namely, households consuming 3.5 MWh/year. Source: http:// www.energy.eu). Assuming that all power generated through renewables is consumed within the country, we take the amount of consumption for every country in 2010 and multiply by the subsidies per unit as derived above. This will result in the aggregated amount of subsidies assigned for supporting renewable power generation in 2010, which reaches almost €50 billion in the examined countries. Just imagine how many cubic meters of natural gas could be bought with €50 billion. The power produced through renewable energy sources provides for only 7% of the gross power generation in these countries. At the same time, government investments in renewable generation, in the form of subsidies, amount to an average of 34% of the gross value of all power production. Therefore, the system established in the EU for subsidizing renewable power generation results in an additional burden for taxpayers. We estimate that if such subsidies were abandoned, it would relieve the tax component and consequently reduce the whole tariff for the end-user by approximately 15-20%, depending on the country.
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Under the current circumstances, the competitiveness of natural gas, including gas imported from Russia, is artificially depressed, and the fuel balance is distorted in favor of renewable energy sources, which are simply not viable without subsidies.
France
UK
the Netherlands
Czech Republic
Austria
Slovak Republic
Bulgaria
621
298
573
381
115
86
71
27
46
2 219
82
25
15
22
10
3
6
1
1
164
13%
8%
3%
6%
9%
3%
9%
2%
2%
7%
71
83
46
69
77
77
66
89
44
44
25
26
26
9
7
5
2
2
289
341
455
305
197
333
133
166
90
(7)=(2)*(6)
24
8
7
7
2
1
1
0,1
0,1
(8)=(7)/(5)
54% 34% 26% 25% 22% 13% 18% 4%
calculations
(3)=(2)/(1)
(5)=(1)*(4)
TOTAL
Italy
Total power generation in 2010, TWh Consumption of electricity produced of renewable sources* in 2010, TWh** Share of renewable sources in the total energy production Average electricity prices for large industrial users (annual consumption of 24GWh) in 2010, EURO/MWh Gross value of power produced, bn EURO Subsidies assigned to support renewable generation, per unit, EURO/MWh*** Gross subsidies assigned to support the renewable generation, bn EURO Relation of the value of subsidies assigned for renewables to the value of electricity paid by consumers
The crucial point is in finding the right balance between various energy sources. At the same time, this would allow us to develop new technologies that would help bring the costs of renewable energy down, making its wide-spread implementation more friendly for European taxpayers.
Germany
The protection of the environment is undoubtedly an issue of the highest importance. However, measures taken to reach environmental goals do not always bring adequate results. Huge financial inflow into renewable power generation has not yet brought tangible results to cut emissions. It would make much more sense to invest in gas-fired power plants
and the use of natural gas as the most environmentallyfriendly fossil fuel, in order to gradually replace higher polluting coal power and heat generation. The ultimate ecological impact of natural gas would be comparable to the renewable option but would cost significantly less to European consumers.
146
49
3% 34%
* Renewable energy sources: solar, wind, biomass. Source: BP Statistical Review of World Energy June 2011. ** We assume that all energy produced from renewable sources is consumed inside the country. Source: Europe`s Energy Portal (http://www.energy.eu/). *** Weighted average indicator for 2010, energy sources: solar, wind, biomass; not including hydrogeneration European Central Bank $/EURO exchange rate in 2010 - 1,3257
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Innovative Partnerships to be Found
Bruno Lescoeur, Senior Executive Vice President at EDF and CEO of Edison Bruno Lescoeur, Senior Executive Vice President at EDF and CEO of Edison, provides answers to questions from Blue Fuel regarding EDF’s gas development strategy and its partnership with Gazprom to join the offshore section of the South Stream projectcargoes traded by GM&T in LPG, gasoline, naphtha and gas condensate. Blue Fuel: Your role at EDF is to manage gas development and all of Southern Europe’s activities. EDF is known worldwide as the leading power company in Europe, and particularly, for its expertise in nuclear power, could you please tell us what role gas activity plays at EDF? Bruno Lescoeur (BL): EDF is Europe’s largest power producer and among one of the leading energy companies in the world with more than 37 million clients. Our oldest market is France with 97 GW of generation capacity of which 65% is nuclear. Over the last several decades, we have developed a worldwide standing. For example, in the UK and the U.S. we own 8.7 and 4 GW of nuclear capacity, respectively; and in China, we are developing a nuclear plant in Taishan through a JV with China Guandong Nuclear Power Corp. EDF prides itself on its balanced power mix, which allows the company to have one of the lowest carbon emissions levels among large power producers. EDF has a strong expertise in hydroelectricity, with 439 plants in France (20 GW), as well as in oil and coal with 25.4 GW globally. More recently, EDF decided to build a coal plant in Poland with a high efficiency rate that will also burn biomass. With EDF Energies Nouvelles, the Group is investing in renewables, which now represents 3.3% of our installed capacity. Lastly, EDF’s installed generation capacity for gas amounts to 11 GW. Our gas activity, in particular, covers all of Europe, where EDF is present on all the key European markets via its subsidiaries: Edison in Italy, EDF Energy in the UK, and
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EDF Luminus in Belgium. The EDF Group is also active in Central and Eastern Europe with subsidiaries notably in Poland, Hungary and Slovakia. Our business goal for our gas sector is to offer gas and electricity to consumers in a package. In 2010, EDF already sold around 12 bcm of gas to its customers. Also on the agenda is our goal to diversify and further modernize our thermal electricity production capacity, in order to lower carbon emissions even further. EDF is developing Combined Cycle Gas Turbine (CCGT) projects across Europe, while simultaneously decommissioning older, less efficient production units. In France, EDF commissioned 430 MW of CCGT capacity at the end of 2011 and has a targeted 930 MW is for 2012. Projects are under way in the UK and Belgium and we have set an ambitious goal of 200 GW of total generation capacity by 2020, which includes new CCGTs all over the world. In 2010, EDF used around 8 bcm of gas in its own power plants. In order to ensure the future security of supply to our consumers, EDF has been developing for several years infrastructure projects (pipeline, regasification and storage), as well as long term gas supply agreements. Blue Fuel: What has changed in 2011 for EDF’s gas activity? BL: 2011 was a turning point for EDF’s gas activities with the realization of three major projects, marking the entry of the company in large gas projects.
April 2012 | Vol. 5 | Issue 1
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Firstly, we made a final investment decision (FID) to build our LNG terminal at Dunkirk in the North of France. The terminal, with an annual capacity of 13 bcm, is a large investment (over 1 billion euros) that will boost the French regasification capacity by one-half. It will connect to both the French and Belgian markets.
and see how its leaders provide full support and backing.
Secondly, EDF reached a preliminary agreement with our Italian partners regarding Edison’s ownership. Edison is one of Europe’s oldest energy companies, with experience ranging from hydrocarbon E&P, power generation and gas and electricity sales. It has 7 GW of CCGTs, out of a total of 8.7 GW of installed capacity, supplied by gas that Edison buys from various companies, including Gazprom. Edison will become the development platform of EDF for gas and more general energy projects in the Mediterranean region.
Blue Fuel: How far does the cooperation between EDF and Gazprom go?
Finally, in September 2011, EDF concluded a deal with Gazprom to join the offshore section of the South Stream project. Negotiations began at the beginning of 2009 and in November 2009, an MoU was signed in order to allow for EDF’s participation in the project. Another major milestone was reached on 16 September 2011 with the signature of the shareholders agreement in Sochi, providing EDF with a 15% participation in South Stream. Alongside Gazprom (50%), the Italian ENI (20%) and the German Wintershall (15%), the presence of a large French energy company such as EDF reinforces the project’s European dimension. South Stream is also an important part of EDF’s gas strategy and strengthens EDF’s position as an important player in the European gas market. Blue Fuel: In your view, what are the main strengths of the South Stream project? BL: The South Stream project is a real industrial challenge. It represents more than 3 mt of steel, which will be made into four pipelines spanning more than 900 km at a depth of more than 2000 m below sea-level. It is a complicated project that only serious large industrial groups can achieve. Each of the four partners in the project is highly experienced in the realization of large projects. The first of them is Gazprom, well-versed in major European gas projects. ENI, along with Gazprom, has contributed to the Blue Stream pipeline, while Wintershall has participated in Nord Stream. Both projects having a significant subsea dimension. EDF has decades of experience developing and building large industrial projects. The success of the project will rely on the control of cost and time management, thereby requiring close cooperation between the companies on all levels. I have already witnessed a deep commitment by our teams on a daily basis
Another important asset of the project is its European dimension; South Stream will strongly contribute to the reinforcement of the security of supply in Europe and also stimulate and sustain the economic development in Central and Southern Europe.
BL: Of course the cooperation of the largest producer of gas in the world and the largest European power producer goes beyond the construction of the offshore section of the South Stream pipeline. EDF and Gazprom have the ability to build a long term relationship as both companies are very similar in terms of size, operational time scales, and involvement in massive, long-term projects. With the growing consumption of gas for power generation needs, our companies have a mutual interest in supply agreements or investments in production, in both electricity and gas. The 2009 MoU foresees the signing of new long term gas supply contracts between Gazprom and EDF. These contracts will give EDF the access to gas resources from Russia and allow the company to reinforce its security of supply by dealing with a partner such as Gazprom that has repeatedly proven itself as a reliable leading supplier of gas to Europe. It is, however, a difficult marketplace today, where a gas glut has turned the economic principles upside-down and has shaken the historical oil-indexation, making long-term gas supply agreements difficult to sign. However, such contracts should remain an important tool to fairly share the risk between buyers and producers, even if on a short-term basis there may be some diverging views about the value of gas. This means innovative partnerships have to develop new long term agreements, and I am convinced the constructive dialogue we have with Gazprom will help us find those innovative solutions that are mutually beneficial and profitable for our companies. Blue Fuel: What about partnerships of EDF with other Russian companies? BL: Russia is obviously a key partner for EDF and the cooperation regarding nuclear has been developed all along the last 30 years. Recently, EDF signed an agreement with Rosatom in June 2010 to cooperate in R&D and in nuclear fuel fields to exchange know-how and improve mutual understanding – for example, through visits of industrial sites in both countries. EDF and INTER RAO are also working together in the field of energy efficiency and created a 50/50 JV between EDF Fenice (100% owned by EDF) and INTER RAO in November 2009. ERDF, a 100% EDF subsidiary which manages the French electricity distribution will soon start managing MRSK Holding’s distribution networks in the Tomsk region.
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Algerian Energy Policy: From Hydrocarbons to a Diversified Mix of Energy Ali Hached, Senior Advisor of the Minister of Energy and Mines (Algeria)
Ali Hached has more than 37 years of experience in the gas and oil Industry, of which 30 years have been dedicated to the Algerian oil company Sonatrach. The first years of professional experience, between 1973 and 1978, were devoted to research and teaching activities in Thermodynamics and Industrial Processes in the Algerian Institute of Petroleum Energy policies have been changing all over the world for the last forty years in accordance with national or regional differentiated approaches. However, it has become obvious that we are, at the beginning of this 21st Century, facing a new challenge, even if one does not detect any important shift within energy markets. The climate change and, in particular, the successive natural disasters of these last years, have focused the public opinion around environmental concerns and have boosted the debate around the globalisation of energy policies. Are we moving towards a global energy policy that would integrate the fossil resources depletion in the long run and the need to gradually adjust the structure of the energy mix? In either case, we should cope with the urgent task of meeting the basic needs of more than two billion people deprived of the access to modern energy. Furthermore, in the same way, the development of bio-fuels should not create tensions on food products supply and prices which will automatically penalize Southern countries, the first victims of the climate changes despite their low contribution to greenhouse gas emissions.Today, each region is working towards a range of specific solutions with appropriate transition periods, where fossil energy resources will coexist with renewable resources, the development of which being based on new and best environment-friendly technologies. The challenge now appears in all its dimension and complexity given the low performances 18
achieved in the implementation of the Kyoto Protocol and the mitigated results of all other following summits – such as the Durban conference, which reached a minimal agreement, or the Copenhagen conference (COP15) situation, where nothing came out of the meeting. The agreement reached does not commit all developed countries of Annex 1 and allow the latter to manage their environment policy at their convenience until 2020. Natural gas, despite its low levels of emissions and high efficiency in power generation, is still not appreciated by the legislators in consuming regions who do not encourage the replacement of obsolete coal power stations. As far as the Algerian hydrocarbons resources are concerned, Algeria’s potential of new key discoveries is enormous, since the country enjoys 1.6 million km² of sedimentary basins and a largely under explored offshore area of at least 100 000 km². Therefore Algeria will continue investing large amount of funds in the coming years (more than 68 billions of US dollars over the next five years, and around 80% of which will be devoted to the upstream sector). So far the combined effect of rising crude oil prices and technological advances in the extraction of non-conventional hydrocarbons helped boosting interest in developing resources that were previously considered uneconomic, such as oil shale and tar sands. In a similar way, new techniques also contribute to recover more oil from reservoirs. Thanks to its exports potential, Algeria will continue to play a key role in meeting the needs
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April 2012 | Vol. 5 | Issue 1
of consuming countries, in particular the European countries, through long term gas contracts. However, the energy policy of the European Union has gone through deep changes since the adoption of the first directive in 1998. Faced with the willingness to modify the model that allowed the tremendous growth of the European gas market, suppliers can reasonably question the effectiveness of the approach and its consequences on the conditions for a stable and reliable supply of natural gas to Europe. In Algeria, access to energy has always been at the heart of government concerns, as it is the guarantor of the people’s socioeconomic development. This has been facilitated by the availability of substantial and diverse energy resources, including fossil energies. This policy of sustainable development has resulted in successive programs for the electrification and distribution of natural gas oriented towards fully meeting of both urban and rural demands. This access to energy will be diversified owing to the immense renewable energies potential, where solar energy is the major component. Future programs will increasingly rely on other forms of energy, particularly for population located in remote areas. The evolution of the electricity penetration rate, now exceeding 98%, and the gas connection rate approaching 50%, illustrate the outstanding performances achieved by the accessibility policy conducted by the government on a national scale. The implementation of the National Model of Energy Consumption adopted in the early 1980s, has encouraged this expansion. In the past, the National Model appealed for the optimal valorisation of available energy resources and promoted the use of natural gas and LPG’s. It should be pointed out that the consumption of LPG per
capita which is one of the highest in the world has helped reducing deforestation in Algeria. This model is being updated to better deal with the concerns of energy conservation and environmental preservation. The enhancement of energy efficiency, which often measures progress and technology innovation, is a key parameter in optimizing the national energy model. Series of successive laws have addressed all these concerns integrating them in a coherent energy strategy that has always made the energy sector a key driver of the country’s socio-economic development. The need to diversify energy sources and growing concerns about environment calls for the integration of new technologies, in favour of the efficient and even cleaner production and use of electricity. Algeria intends to develop new technologies to ensure the competitiveness of renewable energy sources potentially available for power generation, such as solar, wind, biomass and geothermal energy. In Hassi R’Mel, a 150 MW solar/gas hybrid power plant has been commissioned this year. This project is a major step in the promotion and use of solar thermal power in Algeria and other projects are to be launched soon. In conclusion, the world is facing the challenge of being consistent with the objectives of economic development of both consuming regions and developing countries, and Algeria is developing a policy which reflects the desire to ensure that the necessary investments to the development of energy infrastructures, and particularly on new and renewable energy, will be implemented to the benefit of future generations.
Algeria
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Natural Gas Growing Role in Global Energy Mix Ed Chow, Senior Fellow, Energy and National Security Program, Center for Strategic & International Studies (CSIS), answers questions from Blue Fuel regarding the global outlook for natural gas
Blue Fuel: Looking ahead to the next 5-10 years, can you talk about the changing role for natural gas in the global energy mix? Ed Chow (EC): The direction has been clear for quite some time. Natural gas will play a growing role in global energy mix, not only in the next 5-10 years, but in the next couple of decades or longer. This is due to increasing supply of natural gas in different parts of the world, favorable economics as the general price of energy rises, and its environmentally friendly characteristics. Blue Fuel: How does the Asian appetite for natural gas align with or differ from broader trends in the global gas market? EC: Overall natural gas demand growth in the industrialized world is likely to be moderate to stagnant given its relatively mature state and slower economic and population growth. Consequently future natural gas demand, along with energy growth in general, will almost certainly shift to the fast developing regions of Asia. As income grows, formerly gas exporting countries in Southeast Asia will need domestic gas production to fuel their own economies and the environmentally favorable aspects of natural gas will command a premium. What will be interesting to watch is how Asian gas market for imports will change as the demand center moves from Japan to other countries such as China and India. Also, gas exporting countries will focus more on new markets in Asia, including new projects from Australia and possibly Russia. Blue Fuel: How do you anticipate the market shaping for natural gas vehicles?
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And what about other newer applications for natural gas? EC: I expect the development of natural gas as transportation fuel to be limited to fleet vehicles operating in relatively short distances. Demand growth for natural gas will remain concentrated in power generation, residential/commercial, and industrial use where it has natural advantages over liquid fuels and other alternatives. Blue Fuel: Looking back at 2011: where did you think things would go in contrast to where they ended? What are the implications for 2012? EC: The biggest energy event in 2011 was the Fukushima nuclear disaster. Not only did it lead to a sharp decline in nuclear power generation and consequently much higher than normal oil and LNG imports for Japan, it raised serious questions about the future of nuclear power development in other countries. It also masked the longer term impact of other Asian countries entering the global gas market, which I mentioned earlier. Whether the Fukushima effect will be long-term will be important to watch in 2012, as Japanese authorities decide whether to restart reactors shut down for inspection. In any case, I expect that long-term interest in natural gas will stimulate investment, including exploration in new areas such as offshore eastern Mediterranean and east Africa. Political uncertainty continues to affect energy markets negatively and lead to price volatility, in spite of slow global economic recovery. Examples include the Libya crisis in 2011 and Iran sanctions in 2012.
April 2012 | Vol. 5 | Issue 1
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Christmas Ball for Children at Hofburg On 15 December 2011, the main hall of the Hofburg palace in Vienna hosted the “Energy for Life” children’s Christmas party. This special occasion featured more than 800 children, aged 5 to 12, as well as representatives from prominent European social and cultural institutions. The ball was held under the patronage of Minister for Social Affairs Rudolf Hundstorfer with support from Gazprom Export and Austrian gas companies OMV, GWH and EconGas. Pupils from the Vienna State Opera jointly opened the event with children from the Bratislava Conservatory Ballet School. The lively and interesting concert program also featured performances from Ich bin OK, a dance association for children with disabilities, as well as the Do-Re-Mi Children’s Chorus and the Bellarina
Dance Performance group. Loud applause accompanied the performance of Danila Loginov, a young blind pianist from Russia, while DJ Ötzi was the star guest and the favorite artist among young participants. In addition, the organizers made the event accessible to children who were unable to attend in person by broadcasting it online at www.openworld.eu.com. Thanks to this broadcast, young patients at four regional hospitals in Lower Austria were able to watch the concert.All the events were covered by major broadcasting companies (ORF, ATV, PulsTV) as well as Austrian print media (Österreich, Wiener Zeitung, Kronen Zeitung).
A Touch of Fantasy Gazprom Export recently sponsored the 31st annual “December Nights of Sviatoslav Richter” international winter festival of music and fine art, which was held from 2 to 29 December at the Pushkin Museum of Fine Arts. Yuri Bashmet was the artistic director of the festival. The festival, named after its founder, Sviatoslav Richter, featured a series of classical music concerts and art exhibits under the theme, “Frantic Songs: fantasy and visions.” The December Nights festival appeals to people of varying interests, with its celebration of acting, dancing, art and musical achievements, all while maintaining a consistent high level of quality. www.gazpromexport.com | newsletter@gazpromexport.com | +7 (499) 503-61-61 | comm@gazpromexport.com
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Instant Photo Truth The opening ceremony for the “Photographs of Russian and Soviet prize winners of the World press photo 1955 2010 contest” and “Grand Prix in Russian” exhibits was held in Moscow last year on 16 November 2011. The exhibition featured more than 130 works from masters of national photography and winners of the international World Press Photo contest from 1955 to 2010. In this integrated form, the exhibit documented major milestones in Russian history over the past half century, from the first journey of man into outer space to the radical political and economic changes in the late 1990s as well as notable athletic, scientific and cultural achievements. The exhibition attracted many famous Russian photographers. Apart from awarding commemorative diplomas to authors and taking of a group photo of the
prize-winners present at the event, the opening program included the presentation of “Grand Prix photos,” a unique series of photographs released by the “Russ Press Photo” cultural project sponsored by Gazprom Export. The collection included all of the featured pieces as well as photos that have won international acclaim, diplomas and special prizes, totaling 450 works with comments and information about the photographers and the competition itself. The collection gave a complete account of Soviet and Russian involvement in the competition.
Blue Fuel Receives Best Corporate Media 2012 Award At a ceremony under the auspices of the Association of communications and corporate media directors of Russia, Blue Fuel, the information and analysis newsletter produced by Gazprom Export, has been awarded a diploma as the Best Corporate Media 2012. Blue Fuel has been nominated in the “Best newsletter/ bulletin” category. In our times, the quality of corporate media in Russia has a direct impact on the efficiency of interaction with partners and even competitors. It also promotes loyalty and trust of the customers, as well as brand awareness and a brand’s psychological appeal. One of the key properties of Blue Fuel, which translates into a competitive advantage, is its function as a debate floor. This enables the exchange of experience, unorthodox opinions and creative concepts, which facilitates proper assessment of the new trends in the ever-changing gas market. 22
Now in its fifth year, the quarterly Englishlanguage Blue Fuel newsletter reaches an audience of more than 3,000 recipients — and will now be issued in a new format, accessible online and on mobile devices. The target audience embraces, above all, major players in the gas and, in a wider context, in the energy market, as well as energy-focused media and academia. And this audience is steadily growing.
BLUE FUEL April 2012 | Vol. 5 | Issue 1
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