Enagás by East Coast Promotions

COMPANY PROFILE

2015

ENAGÁS

+34 91 709 92 00 | www.enagas.es

Naturally high hopes Editorial: Abigail Saltmarsh

As demand for natural gas for electricity hits a two-year high in Spain, Total World Energy focuses on the recent growth of Enagás which now places it as an international midstream company present in eight countries and with further opportunities on the horizon, Marcelino Oreja, CEO of Enagás, explains: “We are living what is said to be a ‘golden age of gas. This has been very positive for us, and in the future, there are plenty of opportunities for our company to grow internationally, and take advantage of our expertise, as leaders in this market.” With soaring temperatures in Spain this summer, demand for natural gas for power generation has broken all records since 2012, according to Enagás, the technical manager of the Spanish gas system and the main carrier of natural gas in the country. Demand for natural gas

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for electricity peaked at approximately 7,900 GWh in July 2015, seeing the highest levels of consumption since February 2012. The reasons for these figures are the high temperatures, which have prompted a sharp rise in demand for electricity, as well as lower wind generation,

the company explains, and July was one of the hottest months in Spain since records began, with a heatwave that started in June and lasted three weeks. Recently released figures have also shown that demand for natural gas in the domestic market grew by 5.3% year-on-

ENAGÁS

year in the first half of 2015. These announcements only serve to strengthen the company’s resolve to see even stronger growth over the coming years as demand for natural gas increases in Spain and further afield, and to reinforce its position not only as the leader in its domestic market but also as a serious contender on the global stage, says Marcelino Oreja, CEO of Enagás. “We are living what is said to be a ‘golden age of gas,’” he suggests. “This has been very positive for us, and in the future, there are plenty of opportunities for our company to grow internationally, and take advantage of our expertise, as leaders in this market. “Until 2010 Enagás was only

dedicated to the Spanish market. We have 45 years of experience - we are leaders in this market - and since 2011, we’ve started to grow internationally, because of the growth of energy demand and also, of course, because gas demand is increasing.”

INTERNATIONAL GROWTH Headquartered in Madrid, Enagás was founded back in 1972 and went on to develop over the decades as an operation with aims of ensuring the competition and security of the Gas System in Spain. Today, it has nearly 11,000 km of pipelines throughout the country and three underground storage facilities, located in Serrablo, Gaviota and Yela. Spain imports almost all the gas it consumes and storage capacity

is limited, with only enough space for 20 days of supply. Nevertheless, Enagás operates four regasification plants (in Barcelona, Huelva, Cartagena and Gijón) and it owns 50% of the Bilbao regasification plant. It also owns 30% of the Sagunto liquefied natural gas (LNG) terminal and the entire Gascan site, which oversees a project for the construction of two LNG terminals in the Canary Islands. Currently, its terminals in Spain have 2,566,500 cub m³ of LNG storage capacity and an output capacity of 6,250,000 Nm ³ / h. “From 1969, for over four decades Enagás focused exclusively on the development, operation and maintenance of Spain’s highpressure gas network. Then, in 2011, when the Spanish gas sector

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started to mature, we decided the time was right to engage in a process of internationalisation. “Within just four years, Enagás has become an international midstream company that is present in eight countries: Spain, Mexico, Chile, Peru, Greece, Albania, Italy and Sweden. Other new opportunities have also arisen, such as bunkering (using LNG for maritime transportation) and reloading vessels with LNG.”

STRENGTH TO STRENGTH Today Enagás is a shareholder of TLA Altamira regasification plant in Mexico, where it also

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“There are plenty of opportunities for our company to grow internationally, and take advantage of our expertise, as leaders in this market”

participates in gas pipelines construction. In Chile, it has an LNG terminal (in Quintero) and it is now also firmly established in Peru, where in 2014 it acquired 20% of Transportadora de Gas del Perú (TgP) and 30% of Compañía Operadora de Gas del Amazonas (Coga). In the same year, a consortium between Enagás and Odebrecht was awarded the project for the South Peru Gas Pipeline and then in July 2015, the company finalised an agreement to raise its stake in TgP to 24.34%. Enagás also participates in two European projects. In September 2014, the company joined Trans Adriatic Pipeline (TAP), with a 16% stake, and in March 2015 it agreed with the Belgium Fluxys to jointly acquire Swedegas, the company, which

ENAGÁS operates Sweden’s Gas System. Since its internationalisation began, c o n t i n u e s M r O re j a , E n a g á s h a s p a r t i c i p a t e d i n m o re t h a n 2 0 0 i n t e r n a t i o n a l p ro j e c t s i n s o m e 6 3 d i ff e re n t c o u n t r i e s : “The main driver behind t h e s e p ro j e c t s i s h a v i n g the leverage of experience as transmission system operators and developers of n a t u r a l g a s i n f r a s t r u c t u re s i n emerging markets. “ I n re c e n t y e a r s , t h e position of Enagás as a global specialist in L N G re g a s i f i c a t i o n a n d l i q u e f a c t i o n h a s g o n e f ro m s t re n g t h t o s t re n g t h , w h i l e partnerships with local g ro u p s w i t h c o m p l e m e n t a r y s k i l l s re m a i n s t a b l e , t h e re b y

e a s i n g p re d i c t a b l e c a s h f l o w s w i t h a t t r a c t i v e re t u r n s . ”

A TECHNOLOGICAL LEADER Both innovation and sustainability remain at the forefront of the Enagás trajectory as the company forges ahead with its plans for expansion. As a leader among natural gas transporters, it attaches particular importance to development on all fronts but especially technical and human resources. The company builds new infrastructure and enlarges existing facilities to the highest standards, making use of the best techniques available. It strives

constantly to innovate, both on its own and in cooperation with other Spanish and international gas transporters and companies. Its underground storage facilities have been designed and built to the h i g h e s t l e v e l s o f s a f e t y. Investment in training is k e y, M r O r e j a s t r e s s e s : “ O u r employees now have ample experience of operating in international markets, and have worked extensively w i t h t h e w o r l d ’s l e a d i n g gas companies. In order to provide the best industry expertise to our customers, we have expanded the prospects for inter nal career development and our ability to attract new talent.”

PIPELINES

Huge and successful worldwide experience constructing pipelines Our Pipeline Division (DAIP) has 40+ years of experience constructing pipelines up to 48 inches in diameter to transport crude oil, natural gas, industrial gas and refined products in all types of locations and conditions for public and private clients. Our services include design, engineering, procurement, construction and commissioning.

EXPERTISE     

Cross Country Pipelines up to 48 inches. Valve and Scraper Trap Stations. Pump and Compressor Stations. Storage Tank Systems. SCADA Systems.

CYMI and MASA are two companies of ACS group

HEAD OFFICE 26, Manoteras Ave, 4th floor 28050 Madrid. SPAIN

T. +34 916 593 360 cymimasa@cymimasa.com

www.cymimasa.com

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A BENCHMARK FOR SUSTAINABILITY The company’s innovation efforts also extend to optimising energy efficiency in the management and operation of its infrastructures. This includes using waste energy from its processes and raising the efficiency of its equipment and plants. Innovation also features in certain critical knowledge areas, eg: process safety, gas system management and operation, and the measurement of third-party energy received and dispatched. The Zaragoza laboratories, equipped with the best human and technical resources, provide special support in this respect. Leveraging the similarities between its core businesses, the company is capable of

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fulfilling one of its aims: to lead the development of innovative technological solutions using CO2 transport and storage technologies that mitigate the impact on climate change. Enagás takes part in an increasing number of initiatives undertaken in these fields. When it comes to underground storage, the company’s commitment is also strong. Rosa María Nieto, director of underground storages, says: “For the type of business we develop, we mainly work on preventing the impact on the environment. Enagás takes into consideration biodiversity protection of the areas where it operates. We ensure we appropriately plan and locate facilities, restoration and replanting areas affected during

pipeline construction and we ensure we reduce greenhouse gas emissions, from the design stage, which cause changes in the physical conditions of the ecosystems where plant and animal species grow.” As evidence of this effort, Enagás’s carbon footprint has been certified in accordance with the UNE-EN ISO 14064 standard. Mr Oreja adds: “Enagás prides itself on becoming a benchmark for sustainability, good governance, knowledge and innovation in the sector. Our management model, which is based on efficiency, transparency, integrity and creating value through ongoing improvement, has led to our inclusion in the world’s most prestigious rankings, such as the Dow Jones Sustainability Index,

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FTSE4Good, the 2014 Carbon Disclosure Project Report and European Excellence 500+.

LOOKING AHEAD In the first half of 2015, Enagás saw a net profit of €213.1 million, representing a year-onyear increase of 1.5% and in line with full-year predictions. This increase was underpinned by the performance of the company’s international assets, most notably Transportadora de Gas del Perú and Compañía Operadora de Gas del Amazonas. In the first half, the company invested a total of €280.3 million, of which €142.6 million was earmarked for international projects and €137.7 million for Spanish assets, in line with annual targets. The increase in demand for

“Enagás prides itself on becoming a benchmark for sustainability, good governance, knowledge and innovation in the sector”

natural gas is expected to continue for some years into the future, says Mr Oreja. As such, he is optimistic about the future of Enagás and sees further growth within international markets. “We envisage that global gas demand will increase by more than 2% annually through to 2020,” he says. “Taking into account that this major demand increase will occur in regions that are not self-sufficient, expanding infrastructure capacity will be necessary in order to meet both production and demand. “As such, Enagás is well positioned to play a leading role in infrastructure development and operations, as it is independent from both production and consumption interests, and so acts as an enabler for harmonising the world’s gas needs.”

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