Fluxys

COMPANY PROFILE

2015

FLUXYS

+32 2 282 72 11 | www.fluxys.com

Fuelling natural gas transmission Editorial: Annabelle Withering

Fluxys has been at the helm of many firsts in the industry – most notable perhaps is the Zeebrugge LNG terminal, which offers a convenient gateway to LNG supply in North-Western Europe. Currently undergoing expansion, on completion of its contract with Yamal LNG scheduled for 2019, the terminal’s storage capacity will increase by 180,000m³. Total World Energy speaks with Fluxys’ Communication & Public Affairs Manager, Rudy Van Beurden, to find out more…

Liquefied natural gas (LNG) is, as the name suggests, a natural gas that has been converted to a liquid state for the ease of both storage and transport. A cost efficient alternative to compressed natural gas (CNG), especially in terms of transportation over long distances where pipelines are non-existent, LNG is carried by

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specially designed Cryogenic sea vessels.

With LNG production steadily on the rise, it is expected to hit 10% of the global crude production by 2020 and sits favourably as one of the best potential solutions for future energy.

The Zeebrugge LNG terminal,

located on a 30ha site in the outer port of Zeebrugge, Belgium, was commissioned in 1987 and was, at the time, the first LNG terminal in North-West Europe. Supplying loading and unloading facilities for LNG carriers, it has an annual throughput capacity of 9 bcm of natural gas.

FLUXYS Owned and operated by Fluxys LNG, part of Belgian independent natural gas infrastructure company, Fluxys Belgium; the terminal offers a convenient gateway to LNG supply in North-Western Europe. LNG which is unloaded at the terminal can be redelivered for consumption on the Belgian market, re-loaded for export, traded on the Zeebrugge hub or transmitted to end-user markets across Europe – including the UK, Germany, France and the Netherlands.

ZEEBRUGGE LNG TERMINAL The Zeebrugge terminal is currently undergoing extensive and important upgrades to help support year round deliveries of LNG, firmly cementing its position as an integral LNG hub in NorthWestern Europe.

In March this year, Fluxys and Yamal LNG signed a 20-year contract for LNG transhipment at the Zeebrugge terminal, helping to enhance transhipment of LNG by up to 8-tons per year.

In the meantime, Fluxys has already

invested in a second jetty which is currently under construction and set to become operational in the coming months. This new platform will be key in assisting with logistics and transportation, subsequently resulting in an expected and significant increase in ship movements at the terminal, allowing berthing of LNG carriers with a capacity of 2,000m³ – 217,000m³. During the winter months, Arctic LNG tankers will also transit via the LNG terminal.

With the new platform expected to double traffic at Zeebrugge, additional storage is subsequently needed so the extensive upgrades will also include the construction of a fifth LNG storage reservoir, with a capacity of 160,000m³ of LNG, it is set to be completed in 2016.

Upon completion of the ongoing investments in 2019, LNG traffic will more than double and will see Yamal LNG making full use of its contractual capacity.

Speaking with Fluxys’ Communication & Public Affairs Manager, Rudy Van Beurden, he explains the importance of these upgrades, not only for LNG but for Fluxys and Belgium too: “We try to stay

ahead of what the market is looking for, there is a new market developing in small scale LNG where LNG would be used mainly as a fuel for vessels and trucks, so that’s why we want to be ready and offer the services for this new market.

“This is the key reason why we are building a second jetty, not only to extend the capacity of the additional terminal, but with the second jetty able to receive vessels as small as 2,000m³, with both jetties we will now cover the whole range of LNG vessels from the smallest to the biggest vessels in the world. It will also allow the transfer between ships – all made possible from the Zeebrugge terminal.”

Beginning his career as an air force officer, Rudy Van Beurden was present during the creation of the Zeebrugge trading hub.

“I became responsible for gas flow and over time, I went into commercial business and became accountable for international business development until 2012 before my current role as Communications & Public Affairs Manager.”

©Fluxys - P. Henderyckx

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LNG FOR TRANSPORT? The move for LNG to be used as a substitute fuel for transport, especially in large road truckers, has already seen wheels set in motion, with China and America proudly jumping on, metaphorically speaking, the LNG-run bandwagon.

Whilst the concept in Europe has seen a much slower admission, it has, in recent years, experienced a notable increase in interest and implementation with the Netherlands recently introducing LNG powered trucks into the transport sector.

Fluxys is already playing an integral role in fuelling its strategy for LNG transport across Belgium – completing the construction of an LNG truck filling station at the end of last year – it will be supplied by tanker trucks from the Zeebrugge terminal.

“We promote and stimulate additional downstream investment that is needed

to develop this skilled business,” Van Beurden explains. “We have already invested in an LNG fuelling station and we think this business will take off.

Although it is a little harder for LNG to compete with the current fuel prices, we hope this is only temporary.”

A more sustainable alternative, Van Beurden explains the company, as part of its commitment to maintaining greener initiatives, is stimulating the use of natural gas for vehicle transportation, helping to reduce the carbon footprint.

“We have initiatives in place - we started it together with other European TSOs - for a commitment to achieve a completely carbon free gas business by 2015. We were among the first who created this initiative. We want to stimulate developments like power to gas and the use of LNG to replace other fuels. We are working together with the other companies who have their own knowledge and also looking into the

possibilities of using more biogas.”

A major milestone, Mattheeuws Eric Transport and Fluxys officially inaugurated the LNG filling station on the premises of the haulage company in Veurne, in October 2014.

Eric Mattheeuws, CEO of Mattheeuws Eric Transport and winner of the Green Truck Award at the Transport & Logistics Awards 2014, said: “The switchover to LNG means a drastic reduction in emissions and has considerable financial advantages as well. With Fluxys’ investment in the LNG filling station, the logistics supply chain is now complete. We have developed a unique partnership with Fluxys, Eni, Volvo Trucks and Romac Fuels to promote LNG as a valid alternative to bio-petroleum. I’m convinced that LNG is the future.”

“Fluxys wants to break the vicious circle in which the development of LNG infrastructure for transport finds itself: transporters are holding off on switching

Over the last ten years Denys has evolved into an international group with more than a thousand employees. Denys strives for organic growth.

We don’t innovate in one specialism, but as a total business in several disciplines: water, energy, mobility, refurbishment, civil engineering, special techniques and other specialised building techniques. Together all these disciplines form a total business, the Denys Group, a preferred partner for the most complex building projects and infrastructure work.

In order to provide maximum space for that diversified growth, we have been working steadily on expanding internationally.

Our expansion is stable and sustainable, and deeply rooted in years of experience and technical competences. Today we have a firm foothold in Europe, North Africa, Sub-Saharan Africa and the Middle East. We are busy exploring markets such as Asia, Central and South America and Canada.

In addition, we are not shy of forming constructive partnerships in publicprivate ventures, where the responsibility of the contractor is much greater.

But the biggest success factor behind our growth is the enthusiasm and creativity of our personnel. At Denys we love a challenge; it’s in our blood.

Tell us your dream, and we’ll send you a team of enthusiastic engineers to make it come true.

Welcome to Denys.

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SAPURAACERGY

Enthusiasts in pipeline construction

www.denys.com PAGE 5

“We have a good reputation - once you have this, it is easier to find partners and financing” Rudy Van Beurden Communication & Public Affairs Manager PAGE 6

©Fluxys - P. Henderyckx

FLUXYS to LNG for lack of filling stations and too few filling stations are being built because the customer base is lacking. By joining forces with transporter Eric Mattheeuws we have lowered the threshold for other transporters to make the switch to LNG as a sustainable alternative to diesel,” Walter Peeraer, Fluxys CEO, said.

A SUCCESSFUL GROWTH STRATEGY Operating assets, storage and LNG in the country, this Belgian company has successfully developed a growth strategy and is now active in nine other countries, including; Switzerland, France, the UK (through the interconnector), leading on into Greece and Albania. One of the first companies to expand from its base into wider Europe, it wasn’t long before others followed suit, including the Spanish company, Enagás.

In a strategically important acquisition, both companies joined forces to acquire Swedegas in a 50/50 venture in March this year. Operator of the Swedish gas transmission grid, the venture will no doubt lead to looking at developing the LNG market in Sweden in the future too.

“With Enagás and Fluxys, Swedegas will have new, strategic owners with similar core operations as ours.

They have extensive knowledge of the European gas market and they share our ambition to invest in smart, sustainable energy solutions”, said Lars Gustafsson, CEO of Swedegas.

Continually looking at opportunities to invest in further acquisitions, Van Beurden explains Fluxys is also involved in France’s new LNG terminal in Dunkirk, which is on schedule to be ready by the end of the year.

Built by EDF, Fluxys holds a 25% stake and is actively involved in operating the facility. Representing an additional capacity of 13bcm of natural gas per year, it is hoped that Dunkirk will help to contribute in enhancing the security of

supply and the blossoming natural gas market in North-Western Europe.

FUTURE PLANS So, with the aid and implementation of new innovation and technology and secure funding, can LNG, as an alternative to fuel, be a viable option for the transportation industry in the future?

“From our point of view, it is the ideal combination with renewables, because it is not too costly and it’s very flexible. Also, the grids are there so you don’t need to invest a lot,” explains Van Beurden.

With the recent issues surrounding lower coal prices and the subsidised renewables industry, the use of gas for power generation isn’t necessarily a top option but Van Beurden says the company remains hopeful for the future: “We hope this is something that could change and something that we will be able to compete against on a fair basis with the other sources of energy.”

A company with such an extensive history behind it, with many acquisitions and project involvements along the way, Van Beurden explains much of the company’s long-running success can be attributed to being proactive and accepting of inevitable changes along the way.

“We’ve always been quite proactive – when we created the trading hub in Zeebrugge, it was at a time when we were not a particularly large company so making the decision to introduce competition is a difficult choice when you’re still an integrated company but of course, you always try to look further. We are not closing our eyes to the future and we know that the future is changing and we are trying to stay ahead.”

Creating an independent business model has also been key to the

company’s longevity and continued reliability within an increasingly competitive market space.

“When we became a fully independent operator, we said that we now have our own business, so we have to create our own business model. So we were one of the first to step into projects outside of our own country,” explains Van Beurden.

“At the time, there was not much competition, but in the meantime, competition has picked up so we are continuing to look at how we can maintain our growth.

“I also think being very flexible is key - sometimes you have to be quick and because we are not a large company, our people can be flexible and act quickly. We have a very good understanding between our management and shareholders which is vital if you want to instigate quick and important decisions,” he adds.

Perhaps top of the pile of this success though is the company’s long-standing reputation, helping it to build a good partner-base and securing financing.

“The setup of how we are working and how we look towards the future, we are realistic, we don’t see our business as just gaining money purely doing what we have to do as an operator, but we see ourselves as a commercial company who wants to develop more business. This is why we try to look into small scale business, such as reloading services for LNG. “We have a good reputation once you have this, it is easier to find partners and financing. They know that you’re a trustworthy party who is looking carefully and not taking unnecessary risks. Our risk appetite is not too high, but being there and ready to step in, can certainly be attributed to our success,” concludes Van Beurden

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