Presentation: The role of Southern Gas Corridor for energy security of Europe

Ilkin Aslanov, Executive Assistant to SOCAR

President Advisor, SOCAR, Azerbaijan

MR. Ilkin Aslanov Executive Assistant to SOCAR President Advisor, SOCAR

State Oil Company of the Republic of Azerbaijan

18 March, Tirana

“The Role of Southern Gas Corridor for Energy Security of

Europe” Gas Sales

• Proven total hydrocarbon reserves -- 4,6 billion tons

• Forecasted total hydrocarbon reserves -- 10 billion tons

• Prospective onshore and offshore structures – 40

• Secure energy stability and sustainability • Strategic cooperation with leading energy

companies • New infrastructure development and

upgrade, modernization and efficient use of existing infrastructure

• Optimization of management

• Oil/Gas revenues management

• Expansion of SOCAR’s investment portfolio and geography of operations

• Diversification of consumer markets and export transportation routes

• Contribution to the development of Southern Energy Corridor

Azerbaijan’s Gas Strategy: Views and Perspectives

Azerbaijan’s Gas Production

1,2 trillion cubic meters gas 240 million tons condensate Annual production from Stage 2 will start by the beginning of 2018 and reach more than 16 bcm at plateau

Shah Deniz Field

5 bcm

2014

2004

30 bcm

x6

*Main natural gas volumes come from Shahdeniz and ACG fields

Gas from Shah Deniz field has been exported via the SCP gas pipeline since 2006 (Azerbaijan and Georgia) and now reaches 1.9 bcm per annum

Signed agreement to supply Turkey with 89.2 bcm of gas from Shahdeniz over a 15-year period starting 2007 (Shahdeniz stage 1 volume)

To satisfy the gas demand of Nakhchivan AR, SOCAR swaps 0.4 bcm natural gas with National Iranian Gas Export Company

In 2014, 0.2 bcm of natural gas was exported to Russia

Azerbaijan Gas Exports

Total 16bcma Stage 2 future sales volumes were negotiated and agreed;

BOTAS GSA was signed in 2011 for 6bcma.

For remaining 10bcma GSAs were signed with 9 European buyers in September 19, 2013; Axpo Trading AG, Bulgargaz EAD, DEPA Public Gas Corporation of Greece S.A., Enel Trade SpA, E.ON Global Commodities SE, Gas Natural Aprovisionamientos SDG SA, GDF SUEZ S.A., Hera Trading srl and Shell Energy Europe Limited

Shahdeniz Stage 2 Gas Sales

• Absheron Total/GdF PSA 340 bcm gas 45 mln tons of condensate

• Nakhchivan HoA RWE

• Shafag-Asiman BP PSA

• ACG Deep ACG Consortium

• Umid SOCAR 200 bcm gas 40 mln tons condensate

• Babek 400 bcm gas 80 mln tons condensate

Prospective Fields and Structures

Gas Export Potential

Southern Gas Corridor Projects

Trans Anatolian Pipeline

(TANAP)

Trans Adriatic Pipeline (TAP)

South Caucasus Pipeline

expansion (SCPx)

Shah Deniz Full

Field development (SD2)

• The EU initiative is to enhance energy security by connecting to new natural gas sources in the Caspian basin

• One gas field development, one pipeline expansion and two new pipeline construction, one of which is TANAP

• Projects will be able to supply 7 million households in South Eastern and Western Europe with natural gas

Diversity and security of energy supply for Europe

Shah Deniz

SCP

TANAP

TAP

Expansion of Southern

Caucasus Pipeline System (SCPx)

Trans Anatolian Pipeline (TANAP)

Trans Adriatic Pipeline (TAP)

Shah Deniz 2 project

(«Upstream»)

Proposed Southern Gas Corridor Pipelines

Southern Gas Corridor – Key Information about Project Costs

The 692km South Caucasus Pipeline has been designed to transport gas from the Shah Deniz field in the Azerbaijan sector of the Caspian Sea, through Georgia and on to the Georgia-Turkey border. The SCP Project was sanctioned on 27 February 2003.

The physical construction of SCP pipeline commenced in 2004 and the pipeline was ready for commercial operation in September 2006. This is a 42-inch diameter pipeline. The SCP pipeline is capable of carrying up to 7,4 billion cubic meters of gas annually.

South Caucasus Pipeline(SCP)

The expansion of the South Caucasus Pipeline is part of the Shah Deniz Full Field Development project. The construction has started in 2014 and is planned to be completed by 4Q 2018.

SCPX is one of the major projects within the Shah Deniz (SD) Stage 2 (SD2) Program. SCPX is also a component of the Southern Gas Corridor, which will allow for the transportation of gas from Azerbaijan, through Turkey and into Europe.

South Caucasus Pipeline Expansion (SPCX)

SCPX will expand the existing SCP system with a new 48-inch pipeline loop with the capacity to export an additional 16bcma of gas sales to the Georgia-Turkey border. This is to be accomplished by building a new pipeline loop in parallel with the existing SCP. In Georgia two new intermediate compressor stations will be constructed.

Project Details

Shareholders of SCP/SCPX

SOCAR/AzSCP – 10%

• SGCM – 6,67%

• BP – 28,83%

• TPAO – 19%

• PETRONAS –15,5%

• LUKOIL – 10%

• NICO – 10%

Present status of TANAP and its potential role in the

European gas transit route

Gas Arrangements with Turkey

October 25, 2011 Landmark gas sales and

transportation between Azerbaijan and Turkey

IGA on gas sales to Turkey

June 26, 2012

TANAP IGA and HGA

October 15, 2012

TANAP Shareholders Agreement signed by SOCAR, BOTAS and TPAO

January 2013 TANAP IGA and HGA ratified by

Azerbaijan and Turkey Parliaments

*March 2015 *Groundbreaking ceremony of TANAP

Azerbaijan EU Joint Declaration

• Signed in January 2011 during the visit of President Barroso to Azerbaijan

• Framework document • Strategic principles for the supply

of Azerbaijan and Caspian gas to Europe

Growing demand for gas

Europe – Dependance on gas imports

Energy security

Europe needs reliable suppliers

Azerbaijan has proved to be a trusted partner;

SGC appears prominently in the European Commission's

latest “Energy Security Strategy” report

TANAP constitutes an integral part of the Southern Gas

Corridor

TANAP section of SGC will bring gas from a massive

field off the coast of Azerbaijan called Shah Deniz 2 into

the heart of Europe

Project Details

Shareholders:

SOCAR (Azerbaijan) - 58% (operator), BOTAŞ (Turkey) - 30%, BP (UK) – 12%

Project cost: $11.8 billion USD

Total pipeline length and width: Georgia-Turkey – 1,333km – 56”;

Turkey-Greece – 477 km – 48”;

Total length: 1,810

Connecting directly to TAP on the Turkish-Greek border

Project Details

Initial capacity: 16 bcm/a:

6 bcm to Turkey

10 bcm to Europe;

Potential capacity: 31 bcm/a by 2026.

Buyers: contracts with 9 European countries have already

been signed Supply Contracts Signed Axpo (Switzerland)

Hera (Italy)

Enel (Italy)

E.ON

Gas Natural (Germany)

GDF (Spain)

Shell (England/Netherlands)

Bulgargaz (Bulgaria)

DEPA (Greece)

10 bcm/a

Project Status

A Memorandum of Understanding has been signed between

Azerbaijan and Turkey

Gas Transportation Agreement has been signed between

BOTAŞ and TANAP to transport the gas along Turkey

territories

The use of funds allocated for TANAP project has already

been started

Note: the project is 100% equity-financed

Project Status

A significant five year contract for the supply of

Engineering, Procurement and Construction Management

(EPCM) is awarded to WorleyParsons on May, 2014

EIA Positive Decision was taken from the competent

authority Turkish Ministry of the Environment &

Urbanization (MoEU) to be effective as of 24th of July,

2014

Land Acquisition process is ongoing

Project Potential

A second wave of gas from Azerbaijan can be anticipated

with several additional gas opportunities in Azerbaijan

including Shah Deniz Deep, Shafag-Asiman and ACG

Deep that are being evaluated by BP and its co-venturers.

With continued progress these projects can follow on after

Shah Deniz, and therefore provide additional gas to

Europe

Absheron field could be exporting gas in the early 2020s.

The Middle East and East Mediterranean have the

potential to supply the Southern Corridor through the

Trans-Anatolian Pipeline in the future.

The role of TAP in the energy security of the Balkans

Baku 2014

What is TAP? • Tap is an integral part of the Southern Gas Corridor. • Trans Adriatic Pipeline (TAP) is a pipeline project to

transport natural gas from the Caspian sea (Azerbaijan) to the European buyers.

TAP's Key Features

Start of operation: 2019

Length – 867km (Greece - 547km, Albania - 211km, Adriatic Sea - 104km and Italy - 5km)

Diameter: 48 inch (subsea– 36 inch)

Project cost:≈ $5 billion USD

Initial throughput capacity: 10 bcma (expandable to 20 bcma)

TANAP

TAP

The shareholders are: BP (UK) (20%), SOCAR (20%), Statoil (Norway) (20%), Fluxys (Belgium) (19%), Enagas (Spain) (16%) and Axpo (Switzerland) (5%)

TAP's Key Features (2) Aligned with EU’s energy policy objectives

Designed to expand from 10 to 20 bcm (plus) per year

Up to 80% of physical reverse flow and potential gas storage

Connecting directly to TANAP on the Turkish-Greek border

Interconnection with various existing and proposed pipelines providing energy security in South Eastern Europe

Providing Bulgaria with a new source of gas through IGB or Kula-Sidirokastro Interconnector

Although TAP will be initially designed to transport available volumes of Shah Deniz gas to Europe, TAP is scalable.

TAP is a PCI and PECI

TAP has been designated as a Project of Common Interest (PCI) and Europe’s Energy Community has named it a Project of Energy Community Interest (PECI).

TAP is just the beginning for the opening of the Caspian basin producing countries into the EU, which would constitute a great step ahead in terms of diversification and gas security supply.

TAP continues to develop the framework that will enable increased security of supply and diversification of gas resources in the SEE region.

Securing Supply for SEE region

TAP will contribute to Market Integration and Diversification of Gas Supply to South Eastern Europe

• Physical reverse flow:

up to 80 % of capacity

• Secures supply in

emergency situations

and flexibility: connects SEE to North African and other gas resources (i.e. LNG in Greece and Turkey)

• Cross-border

interconnector between the Italian and South East Europe

• Market development and integration through other planned pipelines (IAP, WBR, IGB)

IAP: Ionic Adriatic Pipeline IGB: Interconnector Greece-Bulgaria WBR: Western Balkan Ring

Securing Supply for SEE region (2)

E.ON Ruhrgas emergency supplies during the Ukraine Gas Crisis 2009

Switzerland Rumania

Austria

Czech Republic

Italy

Germany

Poland

Slowakia

Croatia

Hungary

Slovenia

Bulgaria FYROM

Greece

Turkey

Bosnia- Herzegovina

Potential additional emergency supplies via Reverse Flow on TAP

Serbia

Montenegro

Albania

TAP reverse flow significantly contributes to security of supply in SEE region

Natural Gas Reserves (figures in tcm)

Source: BP World Energy Statistical Review

Connecting Europe to new gas reserves (figures in tcm)

TAP will be connected to European Network

The EC is already prioritizing support for interconnecting pipelines to assist in the development of the gas networks in Southern and South Eastern Europe.

Connection to Bulgaria

Connection to

Ionian Adriatic Pipeline

FYROM

Albani

a

Turke

y

Bosnia- Herzegovina

Bulgari

a Monteneg

ro

Ital

y

Serbi

a

Croati

a

Austri

a

Sloveni

a

Romani

a

Hungar

y

Greece

Budapest

Vienna

Belgrade

Bucharest

Sofia

Skopje

Zagreb Ljubljana

Podgorica

Sarajevo

Tirana

Rome

Fier

Brindisi

Ploce

LNG

Thessaloniki

Komotini

Connection to Ionian Adriatic Pipeline

TAP has entered into multiple Memorandum of Understanding and Cooperation (MoUC) with the Ionian Adriatic Pipeline (IAP) which can be connected to TAP, so that such countries as Albania, Croatia, Bosnia and Herzegovina, Montenegro, Slovenia, can all benefit from Shah Deniz gas.

Bilateral Agreements on IAP with TAP: • Plinacro (Croatia) Feb 2011

• BH-Gas (Bosnia-Herzegovina) April 2011

• MoE Montenegro May 2011

• METE Albania July 2011

• Plinovodi (Slovenia) Sept 2011

Cooperation goals: • Align project schedules • Understand technical requirements • Identify and manage technical interfaces • Exchange views on best practice • Enhance regional visibility • Gain political support within the host governments, the EU and the region Seven TAP-IAP Joint Working Group meetings have been held to date IAP throughput scenarios: • 1 bcm to Albania • 0.5 bcm to Montenegro • 1 bcm to Bosnia and Herzegovina • 2.5 bcm to Northern Croatia or 0.2 bcm to Southern Croatia

Cooperation in the development of Gas Master Plan of Albania

Memorandum of Understanding between the Republic of Azerbaijan, Bosnia and Herzegovina, the Republic of Croatia and Montenegro relating to support for and cooperation in the realization of the Trans Adriatic Pipeline Project and the Ionian Adriatic pipeline Project signed in May 2013 in Tirana

The Memorandum of Understanding between the Republic of Azerbaijan, the Republic of Albania, Bosnia and Herzegovina, the Republic of Croatia and Montenegro relating to cooperation in implementing the Southern gas Corridor in the South East Europe signed in December 2013 in Baku

The Intergovernmental Memorandum of Understanding between the Republic of Azerbaijan and Albania relating to cooperation in the development of the Gas Master Plan of Albania

Background of mutual relations in the energy sector.

Emphasizing the importance of TANAP, TAP and IAP projects which are of strategic interest for the region of the South East Europe and the European Union;

Encouraging development of new cross-boarder transportation networks for natural gas as well as development of national gas transportation infrastructure in Albania to enable the gas from Azerbaijan and the Caspian to reach new markets in the South East Europe, including Albania.

Intending to use the extensive experience of the Republic of Azerbaijan in the field of energy in order to provide further assistance by SOCAR of Azerbaijan and the other national public and private entities of Albania to develop Gas master Plan of Albania which would contribute to further enhancement of the energy security of Albania and promote prosperity and economic stability of the country.

What does this Memorandum of Understanding envisages?

SOCAR in coordination with the Government of the Republic of Albania, European Commission and Trans-Adriatic pipeline AG jointly with other interested stakeholders will manage to fund the feasibility study of GMPA

The feasibility study shall among other objectives explore potential options of the GMPA, identify technical and commercial preconditions for the development of domestic gas master plan, including a detailed roadmap to the downstream infrastructure, natural gas transportation and distribution networks and the associated infrastructure including but not limited to gas storage, LNG terminals and power generating facilities in Albania.

Roadmap of actions

Thank you for your attention

Presentation: Environmental services for the oil and gas industry

Giannis Karakolis, North Greece Director, POLYECO S.A. Simon Geragthy, Drilling Waste Management Expert,

POLYECO S.A.

Environmental services for Oil & Gas Industry Tirana, 18th of March

• The group was founded by Ioannis Polychronopoulos in 1977 with the establishment of EPE S.A. the first company in Greece offering Industrial & Marine Pollution Control Services.

• Today, after 35 years of continuous development, the Group has incorporated numerous companies, having activities in several countries worldwide.

• Polyeco was founded in 2001 and is the only fully licensed waste management and valorization industry in Greece.

THE GROUP

• Managed >300.000 tn of HW

• Recovery of >200.000 tn HW

• Accredited Laboratory

• Main facilities in Attica 35.000 m3

• Storage facilities in Thessaloniki

We take care of the environment on your behalf…

POLYECO Affiliates

Polyeco is already actively present to the Balkans area

In Albania, is the only licensed transporter and exporter of

Hazardous waste

Polyeco is active too in Serbia, Kossovo, and FYROM

POLYECO ALBANIA SH.P.K.

POLYECO D.O.O. - SERBIA

POLYECO BALKANS D.O.OEL. – FYROM

POLYECO GULF LLC (FOUNDED IN 2015 IN MUSCAT)

• Quality POLYECO IS COMMITED TO: Quality Management System certified as per EN ISO 9001:2008. Environmental Management System verified according to EMAS III (European

Regulation 1221/2009). Occupational Health and Safety Management System certified as per BS OHSAS

18001:2007. Quality Control Laboratory accredited under the terms of ELOT EN ISO/IEC 17025:2005. Security Management System for the supply chain certified as per BS EN ISO 28000. • Innovation Expertise

Use of the most advances and effective new technologies Clear vision of future developments

• Customization We offer customized solutions according to customer needs

• Social Responsibility Respect and protection of the environment and local ethics.

We take care of the environment on your behalf…

OUR PHILOSOPHY

35 Years of continuous Research, Development and Innovation

The oldest and largest company in the field of Environmental Protection in the South East Europe occupying: >250 highly qualified personnel >50 specialized scientific personnel Member of National, European and International organizations (EBRA, IMO, Eucopro, ISWA, Intertanko, IHPA, Euroshore) Cooperation with International Organizations as World Bank, EBRD, UNDP,

UNPD, UNIDO, EMSA

OVERVIEW

OUR CLIENTS

Hazardous waste management (drilling cuttings)

Oil spill response services

Soil remediation services

Sludge treatment services

Special environmental studies – Contingency plans

Primary wastes from seismic operations

Waste from exploratory drilling operations

Other wastes including excess drilling chemicals

Primary wastes from construction & maintenance activities

Wastes from development, production and operation

Wastes from decommissioning and reclamation

MAIN SERVICES PROVIDED

WASTE MANAGEMENT

Type of hazardous waste for management: • Transformers, capacitors and other

equipment contaminated with PCB’s • Petroleum remains, out of

specifications fuel, greases • Sludge from fuel tank cleaning • Emulsions, mixtures of oil-waste non

recyclable • Laboratory waste • Expired or out of specifications final

products and raw materials • Contaminated packaging materials • Radioactive waste • WEEE, accumulators, batteries and

fluorescent lamps

WASTE MANAGEMENT

Waste streams within the scope of MARPOL (indicative list):

• Bilge Oils • Solids from grit chambers and

oil/water separators • Sludges from oil/water separators • Mixtures of wastes from grit

chambers and oil/water separators • Desalter sludges or emulsions • Waste from transport tanks, storage

tanks and barrels cleaning

REHABILITATION AND DECONTAMINATION SERVICES

Land remediation services:

• Pump and treat • Stabilization and solidification • Land farming • In-situ and ex-situ

bioremediation • Excavation • Chemical treatment – Oxidation

/ Reduction • Air sparging

REHABILITATION AND DECONTAMINATION SERVICES

• Environmental rehabilitation of industrial

sites • Asbestos management • Decontamination of transformers and

other electrical equipment contaminated with PCB’s

• Tank cleaning and sludge treatment services

REHABILITATION AND DECONTAMINATION SERVICES

Tank cleaning and sludge treatment:

• We have modern and specialized equipment for pumping, homogenizing and separating sludge from tanks.

• We offer integrated management of the oil sludge by means of centrifugal separation.

• We own containerized mobile units of centrifugal separation and sludge processing.

• We own special tanker trucks under ADR specifications equipped with high vacuum pumps collect waste.

REHABILITATION AND DECONTAMINATION SERVICES

Oil and sludge on-site treatment:

• Oil in the surface of an oil pond can be recovered in a percentage of 90 to 99%.

• Oily sludge can be recovered in a percentage of 50 to 90% recovered as oil.

• Oil can be pumped from ponds using floating pumps (skimmers) in order to avoid the contamination of clean oil by water or other materials.

REHABILITATION AND DECONTAMINATION SERVICES

Oil and sludge on-site treatment:

• Sludge is pumped out of the ponds using progressive cavity pumps or submersible pumps

• The pumps are hydraulic oil driven by power packs in order to avoid the danger of electrical spark

• If it is needed, the sludge is preheated by portable heaters to reduce its viscosity

• The sludge is transferred into an intermediate tank equipped with mixing devices and internal heating coils for better homogenization. If necessary, the sludge is heated again in order to reach the optimal temperature for decanting (centrifugation treatment).

REHABILITATION AND DECONTAMINATION SERVICES

Oil and sludge on-site treatment:

• All pumps are hydraulic oil driven to avoid the danger of electrical spark

• Sludge may be preheated to reduce its viscosity • Sludge is transferred into an intermediate mixing

and heating tank for better homogenization. • A macerator and a feeding pump transfer the

sludge to decanter where centrifugal separation takes place.

Polyeco holds a unique experience in the management of radioactive materials. The services include:

• Management of Naturally Occurring Radioactive Material (NORM)

contaminated soil. • Management of scrap metal with increased radioactivity levels. • Management of industrial radioactive sealed sources (level / density

meters etc.). • Management of radioactive smoke detectors and lightning rods. • Management of radioactive sealed sources from analyzers (XRF

analyzers, sulphur analyzers, etc.). • Management of high activity sealed sources used for therapeutic

uses (teletherapy sources, brachytherapy sources etc.).

MANAGEMENT OF RADIOACTIVE MATERIALS

Oil Spill Response Vessels

Tanker Vessel AKTEA OSRV

Multi Role Vessel AEGIS Ι

Oil Spill Response Services 19

AKTEA OSRV

EPE with AKTEA through a successful competition in

a European Tender, undertook the contract by the

European Maritime Safety Agency for the protection of

Eastern Mediterranean, Aegean Sea until the Sea of

Cyprus, from big scale oil spill pollution incidents.

Oil Spill Response Services 20

AKTEA Vessels Fleet

Oil skimmer vessels

fully equipped for

antipollution operations

13 Vessels Fleet

Oil Spill Response Services 21

POLYECO has executed a wide range of international hazardous waste management projects . Indicatively : Kazakhstan: Two projects for the management of PCB oils and the management of PCB capacitors (United

Nations Development Program Kazakhstan). Kosovo: Energy Sector Clean-up and Land Remediation Project. Waste removal and on-site treatment of waste

of the former KEK gasification plant (World Bank funded project). Mauritius: Two projects, for the sustainable management of POPs waste (PCBs and DDT) and the

management of DDT contaminated soil (United Nations Development Program Mauritius). Ethiopia: Disposal and safeguarding of obsolete pesticides and other associated hazardous chemicals (Ministry

of Agriculture, World Bank funded project). Benin: Safeguarding and disposal of obsolete pesticides in Benin (Food and Agriculture Organization). Georgia: Management of dumped POPs pesticides (United Nations Development Program Georgia). Serbia: Disposal of napalm powder (United Nations Development Program Serbia) Albania: Repackaging of hazardous chemical stockpiles of the Ministry of Defense of the Republic of Albania

(Organization for Security and Co-operation in Europe). Mongolia & FYROM: On site decontamination technology for PCB contaminated oils (United Nations Industrial

Development Organization/Sea Marconi). Greece: Rehabilitation and decontamination of CHYMA S.A. chemical storage facilities after an explosion

accident. Energean oil and Gas: Sampling, identification, collection packaging, transportation, temporary storage,

management and final disposal of oil based drill cuttings (1.450 tons).

INTERNATIONAL PROJECTS

We take care of the environment on your behalf…

Drill cuttings collection, transportation and disposal

Onshore & Offshore competency

Compliance to the Albanian Legislation

Preparing our Certification for ISO 29001

Compliance to the Greek Legislation

Preparing our Certification for ISO 29001

DRILL CUTTINGS MANAGEMENT

Drill Cuttings Services

Collection – transportation – storage – disposal

Offshore or Onshore provision of services

Sea or land or combined transportation

Waste disposal through POLYECO SA GREECE

facilities

Certified

Containers BS EN 12079

DNV 2.7-1

KEY ISSUES • ENVIRONMENTAL COMPLIANCE • WASTE MINIMIZATION • SIGNIFICANT IMPACT ON DRILLING AFE

Case Study :

A GLOBAL MODEL FOR CUTTINGS WASTE MANAGEMENT FOR ALBANIA

Common Knowledge: Cuttings Pit flooded with drilling fluid

CUTTINGS WASTE MANAGEMENT

FLOODED CUTTINGS PITS GENERATE EXTRA COSTS • Concerns about containment - /overflow, spillage; damage

to the environment

• Mud spillages – “mud lost” has significant cost impact on drilling budget adding to the cost of “mud built” to replace spillage volumes.

• Public perception – local population concerns about potential damage to agriculture/fishing and contamination of the domestic water supply/ water-table/ fresh water reservoirs

• Escalating waste-water treatment & disposal costs.

• Escalating cuttings treatment/ transport & disposal costs.

CORRECT EQUIPMENT SELECTION (for borehole instability, sloughing shales, over-pressured shales, tectonically-stressed shales

• Poor scalping shaker operations (sacking over screens)

• Wrong screens – too fine for scalping operations. • Badly degraded screens on linear motion main

shakers • Screen cleaning not being maintained. • Correct procedures should be posted in the shaker

house.

EXCESS FLUID DISCHARGE PROPER DISCHARGE

• Poor Solids Control Supervision • Need strict shaker operations procedures (No whole mud

to be discharged from the shakers) • Screens should be maintained in prime operating

conditions (high pressure/ low volume wash-down guns) • Mud spill to be vacuumed up and returned to the active

system

• Correct Drilling Waste Management on location is essential to reduce excess cuttings waste being generated.

• Extra equipment, manpower and time for reprocessing cuttings waste

SIGNIFICANT IMPACT ON DRILLING BUDGET

COST OF CUTTINGS TREATMENT PROCESSES, eg. • Thermal systems • Hammer mill systems • Fixation processes • Land Farming • Bioremediation Are significantly impacted by poor waste management on location which can actually double or treble the waste treatment volumes.

POLYECO SERVICES ARE COMMITTED TO CUTTINGS WASTE MANAGEMENT PROCESSES TO MINIMISE WASTE STREAMS AND THEREBY REDUCING TOTAL DRILLING COSTS FOR THE

OPERATOR

We take care of the environment on your behalf…

Thank you for your attention.

For more information please visit our website:

www.polyeco.gr

Presentation: Concessions and the legal framework in Energy

Etleva Kondi, Director of Concessions,

Procurement and Privatisation, Ministry of Energy and Industry

LEGAL FRAMEWORK

The Law no. 7973, dated 26.07.1995 “On

Concessions and private sector

participation in public services and

infrastructure”, changed.

The Law no.8527, dated 09.23.1999 “On

the privatization of local hydropower

plants”

The privatization of hydro power plants

with a capacity below 2 MW - 2001-2004

o Through concession contracts, 30

hydropower plants, with total capacity

of 20 MW.

o Through the privatization process by

auction, 15 hydropower plants, with total

capacity 1.5 MW.

Concession contracts realized

during the years 2005 – 2014:

o 173 signed concession contracts

for the construction of HPP 501

with total generation capacity of

about 2,200 MW and forecast

investment about 3 billion Euros.

The status of implementation of concessionary contracts:

New hydropower plants in production, 83 plants, (including and the existing small local hydropower plants below 2 MW, awarded with “ROT” concessions until the year 2004), with capacity 190 MW;

o New hydropower plants under construction, 38 plants, (including HPP Kalivaç and Devoll), with capacity 511 MW (HPP Kalivaç - 100 MW and HPP Devoll - 319 MW);

o New HPP, to whom has just begun the construction, 380 plants, with capacity up to 1387 MW.

New Hydropower generation projects:

o Vjosa river cascade (except HPP

Kalivaç), other 7 HPP, with total capacity

around 400 MW.

o Skavica HPP, on Drin river, with total

capacity around 300 – 350 MW.

The support of the investments in

electricity generation sector.

o The approach of financial market on the

support of the investors and to the

capital market.

o Strengthening of the Regulatory

Authority activity on monitoring an

increasingly more liberalized electricity

market to the local and regional level.

o Perfecting of the electricity market

model, in accordance with the level of

liberalization.

o Consolidation of institutions which

monitor concession contracts.

o Consolidation of public and private

institutions that administer the intellectual

and industrial property rights on energy

sectors.

Faleminderit Thank you

Etleva Kondi Drejtore

Drejtoria e Konçesioneve, Prokurimeve, Shpronësimeve dhe Privatizimit

MINISTRIA E ENERGJISË DHE INDUSTRISË

Adresa: Blvd Dëshmoret e Kombit, 1001 , Tiranë-Shqipëri

Tel: +35542222245

Website: www.energjia.gov.al

Presentation: Strengthening integration on Energy Community and investment opportunities

Lorenc Gordani, Professor of EU Law and

Project Director, ACERC

Strengthening Integration of the Energy Community and Investment Opportunities Offered for Albania

Adv. Lorenc Gordani, PhD Professor of the European Union Law and Project Director of ACERC

Albania Oil, Gas & Energy 2015 Summit 17-18 March 2015 | Sheraton Tirana Hotel, Tirana, Albania

Investment Opportunities Offered by the Strengthening Integration of

EnC

T h e m a i n b u l l e t p o i n t s :

(i) Dimension of liberalization among the priorities towards an Energy Union;

(ii) Possibilities of the investments and reforms offered by Pan-European prospective;

(iii) Creating an effective IEM, improve of the dispute resolution and the investment climate.

Energy Markets Liberalization on the Western Balkans

Ten years ago: Energy Community an international treaty to create a single pan-European energy market.

During the years, several revised: lastly, on 6 Oct. 2011, the MC adopted Third Energy Package with deadline by 1st January 2015.

Today: Six countries of the WBs involved in an reformation within EU principles (Serbia accomplished December 2014, most others by mid-2015).

Energy Community as an Essential Part of Energy Union

EC Strategy for Energy Union, 25 Feb 2015: reaffirms effective implementation of the EU's acquis, and incentivizing investments in the energy sector.

EC Political Guidelines on European Energy Union: an important element on strengthening the Energy Community

Triumph of the Pan-European Dimension

Affords reinforced by the recent events in the East borders of the EU:

- no security of gas supply without Ukraine (the last add CPs)

- impossible future of EU without WBs (unique route of SGC)

Energy Union goal: EU Energy Council on 5 March and European Council scheduled for 19-20 March.

Energy Community: upgrading based on the report of the High Level Reflection Group.

Adaptation of the list of 35 Projects of Energy Community Interest

In following, on the annual Ministerial Council of 24 Oct 2013 – just two weeks after of published on 14 October 2013 of the Projects of common interest (PCIs) – was adopt a list of 35 Projects of Energy Community Interest (PECIs).

Fourteen electricity generation: implied over 5000 megawatts of new capacity to be installed;

Nine electricity infrastructure: over 1600 km of electricity lines;

Ten gas infrastructure: 2500 km of gas pipelines;

And two oil infrastructure projects: over 600 km of oil pipes.

PECI Infrastructure Progress Monitoring Nr PCs Project

ID / TA WBIF

Commissioning Year

PECI Electricity Generation Progress Monitoring Completed

Ongoing Investment

Idea Still in paper

Inv. decision taken

In construction

No progress

01 AL EG038 2015 Hydro Power Plant Skavica Conceptual

02 AL EG001 2015–2020 Wind Park Dajc-Velipoje E-I assessment

ACERC elaboration data ECS Sept. 2014 regard the Western Balkans

Nr PCs Project ID / TA

WBIF

Commissioning

Year

PECI Electricity Infrastructure Progress Monitoring Completed

Ongoing Investment

Idea Still in paper

Inv. decision taken

In construction No progress

01 AL - FYR of MK

ET001 €

2018 4OO kV OHL SS Bitola (FYR of MK) - SS Elbasan (AL)

Investment decision

03 IT-AL ET024 2014 400 kV HVDC SS Vlora - Bari West Conceptual

04 Kosovo* - AL

ET014 €

2016 400 kV OHL Tirana (AL) - Pristina (Kosovo*) Construction

Nr PCs Project ID /

Fund

Commissioning

Year

PECI Gas Infrastructure Progress Monitoring Completed

Ongoing Investment

Idea Still in paper

Inv. decision taken

In construction No progress

01 AL-ME-HR-BiH

G008 € 2020 Ionian Adriatic Pipeline (IAP) E-I assessment

02 GR-AL-IT G022 € 2019 Trans Adriatic Pipeline (TAP) Inv. decision

03 AL G002 2017 EAGLE LNG Terminal E-I assessment

Investment Requires in the Projects of Energy Community Interest (PECIs)*.

The studies concludes: “while the difficult economic climate affects investment flows, the major concern relate to the overall investment climate rather than availability of finance per se”.

Timeframe of the Propose Reform “An Energy Community for the Future”

High Level Reflection Group (HLRG) headed by Professor Jerzy Buzek published its final report “An Energy Community for the Future” on 11 Jun 2014.

The 12th MC enact procedural act 23 Sept 2014 for the establishing a roadmap to steer the work on the reform proposals to be submitted on the MC of Sept. 2015.

Analytical Paper Identifying Options into Thematic Sections

Proposals still not to be consider in binding level & without prejudice to the future reform of the Energy Community.

The Introducing more Flexibility in the Acquis

The Pan-European Single Energy Market

The Expanding the Scope of the Acquis in the Environmental Area

The Opening and Protecting Energy Markets

The Better Enforcement and Dispute Settlement

The Improving the Investment Climate

The Enlarging the Energy Community

The Regulatory Cooperation

The Reforming Current Energy Community Institutions

Opening and Protecting Energy Markets

II. Introducing Rules on Public Procurement: Broaden the scope by including Directives 2004/17/EC and 2004/18/EC

I. Enhancing the Effectiveness of Competition Law Enforcement: Procedural rules to competition and State aid & ECS executive and investigative powers

A Pan-European Single Energy Market

III. Interconnectors between EU MSs and CPs: Consider regardless of whether they are between MSs & CPs

I. Activating of the Title IV: Revise EU’s Decision 2006/500/EC

II. Gas Demand Aggregation: Allowing an entity for demand aggregation on the imported energy, to improve negotiation and constitute a credit-worthy shipper to support implementation of critical infrastructure.

Better Enforcement & Dispute Settlement

II. Strengthening the framework for enforcement and dispute settlement: including the creation of a regional court of justice versus using arbitration tribunals

I. Encouraging Private Enforcement: private enforcement of the Treaty before national courts

III. Conditionality of Financial Assistance: A mandatory (non-binding) opinion of ECS should be introduced by donors in their procedures

Improving the Investment Climate

IV. Establish of Complementary Projects: Which could be credit-enhanced through the ECREF

II. Investments-Friendly Area: Reducing risks on energy trade

I. Increase and Managing of Available Funding: More funding in bilateral and multilateral support, as well as from IFIs

III. An Energy Community Risk Enhancement Facility: address breach of contract, retroactive measures, discriminatory taxation, payment default by public entities, etc

Implementation Approach of the Reform “An Energy Community for the Future”

On the 26 March the 36Th Permanent High Level Group - PHLG is going to discuss the results.

The MC would adopt measures at its meeting in 2015.

Thank you for your attention!

Contact Details:

Adv. Lorenc Gordani, PhD

Project Director of ACERC

Cell: +355 69 95 32 443

Skype: lorenc_Gordani

www.albaniaenergy.org

Presentation: The refining sector of Albania

Christophe Darbord, Chief Executive Officer, Armo Refinery

The Refining Sector of Albania

ALBANIA

Oil, GAS & ENERGY

2015 SUMMIT

March 18, 2015

The refining sector of Albania

1. What is the refining capacity of Albania as of today and the

on-going modernization?

2. Discussing new ideas on developing the refining sector by

expanding the current refining infrastructure.

3. Global dynamics in mid-distillates in Europe.

Current Refining Capacity of Albania

AMRO operates the 2 refineries Ballsh Refinery • Built in 1978 • Largest refinery in Albania • Capacity around 20,000 bpd • Albanian and International

crude feed

Fier Refinery • Built in 1968 • One atmospheric crude

column and a mild vacuum column

• Capacity around 10,000 bpd • Albanian crude feed

Current Refining Capacity of Albania

Products • Virgin Naphtha • Gasoline (to start later this year) • ULSD <10 ppm • Gasoil <100 ppm • Fuel oils • Petroleum Coke • Sulfur • Bitumen • Diluents

• ARMO produces some qualities which are not widely produced in the regional refineries such as Bitumen, which is produced in only 12/24 of the refineries, Petcoke, in only 6/24 of the refineries or Virgin naphtha, in only 5/24 of the refineries.

On-going Modernization of Refineries

1. Continue the renovation and restart of units

2. Improve yields and focus on quality

3. Reduce losses

4. Use natural gas feeding

5. Improve Safety and Environment protection

Regional assets but connected

• Local but connected to international arbitrages and competition – Not sea-asset but still needs more

flexibility/options to compete with large refineries or trading refinery units

– Quality to follow European standards

• Infrastructure (x10 savings !!!) – Inland from trucking to railing to

pipes

– Ports: to compete within the Mediterranean: better draft, better loading rate, larger tanks, improve costs and transparency

Developing the refining sector

• With Crude oil Producers

• With Gas Producers

Developing the refining sector A Partnerships Approach

Quality testing, Reference, Long-term Off-take, Gradual growth, Flexibility (quality, storage, volume)

Vlore terminal

Long-term Contracts for Refining & Power Generation

Development pipes

• With Oil Distributors

• With End-buyers

• With Logistics

• With Authorities

Quality, Brand, Homogeneous and Constant, Respectful of Environment and People

Quality and Competitive Price to promote local industry

Co-investment, Long-term commitment for lower pricing

Security of Supply, Investment in Infrastructures, Responsible company for People, Environment and Economy

Developing the refining sector A Partnerships Approach

Global dynamics in mid-distillates in Europe

World Oil Demand

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,00019

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

1320

1420

1520

1620

1720

1820

19

OECD NON-OECDsource: IEA, kbpd

Emerging Markets, from power to driving

Emerging Markets, from power to driving

Growth in Passenger cars 2010-2035 Source: OPEC

Emerging Markets, from power to driving

Growth of Road Networks (source OPEC)

• Road Network in 2010 • Road Network in 2035

Europe % Diesel of Driving Fuels

45%

50%

55%

60%

65%

70%

75%

Europe Gasoil/Diesel Demand (‘ooo bpd)

1500

1700

1900

2100

2300

2500

2700

2900

3100

3300

3500

Jan-

05M

ay-0

5Se

p-05

Jan-

06M

ay-0

6Se

p-06

Jan-

07M

ay-0

7Se

p-07

Jan-

08M

ay-0

8Se

p-08

Jan-

09M

ay-0

9Se

p-09

Jan-

10M

ay-1

0Se

p-10

Jan-

11M

ay-1

1Se

p-11

Jan-

12M

ay-1

2Se

p-12

Jan-

13M

ay-1

3Se

p-13

Jan-

14M

ay-1

4Se

p-14

N.W.E Med

?

Europe Gasoil/Diesel Production (‘ooo bpd)

1500

1700

1900

2100

2300

2500

2700

2900

3100

Jan-

05M

ay-0

5Se

p-05

Jan-

06M

ay-0

6Se

p-06

Jan-

07M

ay-0

7Se

p-07

Jan-

08M

ay-0

8Se

p-08

Jan-

09M

ay-0

9Se

p-09

Jan-

10M

ay-1

0Se

p-10

Jan-

11M

ay-1

1Se

p-11

Jan-

12M

ay-1

2Se

p-12

Jan-

13M

ay-1

3Se

p-13

Jan-

14M

ay-1

4Se

p-14

N.W.E Med

Europe Gasoil/Diesel Net Imports (‘ooo bpd)

-400

-200

0

200

400

600

800

1000

Jan-

05

May

-05

Sep-

05

Jan-

06

May

-06

Sep-

06

Jan-

07

May

-07

Sep-

07

Jan-

08

May

-08

Sep-

08

Jan-

09

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

Sep-

13

Jan-

14

May

-14

Sep-

14

N.W.E Med

US arbitrage

US exports of distillates (‘ooo bpd)

0

100

200

300

400

500

600

700

800

900

Jan-

05Ap

r-05

Jul-0

5O

ct-0

5Ja

n-06

Apr-0

6Ju

l-06

Oct

-06

Jan-

07Ap

r-07

Jul-0

7O

ct-0

7Ja

n-08

Apr-0

8Ju

l-08

Oct

-08

Jan-

09Ap

r-09

Jul-0

9O

ct-0

9Ja

n-10

Apr-1

0Ju

l-10

Oct

-10

Jan-

11Ap

r-11

Jul-1

1O

ct-1

1Ja

n-12

Apr-1

2Ju

l-12

Oct

-12

Jan-

13Ap

r-13

Jul-1

3O

ct-1

3Ja

n-14

Apr-1

4Ju

l-14

Oct

-14

N.W.E MED STHAM

Alg/Egypt/Turkey Gasoil/Diesel demand(‘ooo bpd)

400

500

600

700

800

900

1000

Jan-

05M

ay-0

5Se

p-05

Jan-

06M

ay-0

6Se

p-06

Jan-

07M

ay-0

7Se

p-07

Jan-

08M

ay-0

8Se

p-08

Jan-

09M

ay-0

9Se

p-09

Jan-

10M

ay-1

0Se

p-10

Jan-

11M

ay-1

1Se

p-11

Jan-

12M

ay-1

2Se

p-12

Jan-

13M

ay-1

3Se

p-13

Jan-

14M

ay-1

4Se

p-14

Iran/Iraq/Kuwait/Qatar/Saudi A./UAE Gasoil/Diesel demand(‘ooo bpd)

800

1000

1200

1400

1600

1800

2000

Jan-

05Ap

r-05

Jul-0

5O

ct-0

5Ja

n-06

Apr-0

6Ju

l-06

Oct

-06

Jan-

07Ap

r-07

Jul-0

7O

ct-0

7Ja

n-08

Apr-0

8Ju

l-08

Oct

-08

Jan-

09Ap

r-09

Jul-0

9O

ct-0

9Ja

n-10

Apr-1

0Ju

l-10

Oct

-10

Jan-

11Ap

r-11

Jul-1

1O

ct-1

1Ja

n-12

Apr-1

2Ju

l-12

Oct

-12

Jan-

13Ap

r-13

Jul-1

3O

ct-1

3Ja

n-14

Apr-1

4Ju

l-14

Oct

-14

Large Refining Capacity expansion East of Suez (kbpd)

050

100150200250300350400450500

Saudi Jubail End2013

China Sichuanbeg. 2014

China Quanzhoumid 2014

Saudi Yanbu end2014

UAE Ruwais end2014

India Paradipbeg. 2015

Saudi A. Gasoil/Diesel exports(‘ooo bpd)

0

50

100

150

200

250

300

350

400

Jan-

07Ap

r-07

Jul-0

7O

ct-0

7Ja

n-08

Apr-0

8Ju

l-08

Oct

-08

Jan-

09Ap

r-09

Jul-0

9O

ct-0

9Ja

n-10

Apr-1

0Ju

l-10

Oct

-10

Jan-

11Ap

r-11

Jul-1

1O

ct-1

1Ja

n-12

Apr-1

2Ju

l-12

Oct

-12

Jan-

13Ap

r-13

Jul-1

3O

ct-1

3Ja

n-14

Apr-1

4Ju

l-14

Asia net imports (‘000 bpd)

-800

-600

-400

-200

0

200

400

Jan-

04Ap

r-04

Jul-0

4O

ct-0

4Ja

n-05

Apr-0

5Ju

l-05

Oct

-05

Jan-

06Ap

r-06

Jul-0

6O

ct-0

6Ja

n-07

Apr-0

7Ju

l-07

Oct

-07

Jan-

08Ap

r-08

Jul-0

8O

ct-0

8Ja

n-09

Apr-0

9Ju

l-09

Oct

-09

Jan-

10Ap

r-10

Jul-1

0O

ct-1

0Ja

n-11

Apr-1

1Ju

l-11

Oct

-11

Jan-

12Ap

r-12

Jul-1

2O

ct-1

2Ja

n-13

Apr-1

3Ju

l-13

Oct

-13

Jan-

14Ap

r-14

Jul-1

4O

ct-1

4

China India Korea

Global Petroleum dynamics

Confirm a role and opportunities to Refineries in Albania

But increasing competition forces modernization and better infrastructures

Street “Papa Gjon Pali II”

ABA Business Center, 8 Floor

Tirana,Albania

Thank you for your attention

Presentation: What is the energy investment outlook in Albania for 2020?

Entela Çipa, Advisor to the

Minister of Energy and Industry

ALBANIA OIL, GAS & ENERGY

2015 SUMMIT

What is the energy investment outlook

in Albania for 2020

17 -18 March 2015

OBJECTIVES OF THE ALBANIAN ENERGY STRATEGY 2015-2030

The main elements of national energy strategy helped

to identify the investment needs in energy infrastructure

and where actions can lead to cost-efficient solutions.

The demand scenario analysis showed how the future

energy consumption of Albania may develop and

what are the estimated costs of covering (or not

covering) this demand.

Providing secure and sustainable energy supply to

customers delivering uninterrupted energy, at

affordable prices while taking into account

environmental concerns.

OBJECTIVES OF THE ENERGY

STRATEGY 2015-2030

Create a legal and regulatory framework for the energy

markets and to allow trading energy across their borders.

Attracting investments in energy in order to meet the

increasing demand and to improve security of supply,

energy efficiency and the use of renewable energy sources.

Improving energy security implies, among others, to

promote diversity, efficiency and flexibility within the energy

sectors, to be prepared to respond to energy related

emergencies.

Attracting investments in energy Actions taken to meet the energy strategy objectives

Actions in relation to price regulation and network tariffs and

removal of regulatory barriers, in order to achieve the objective

for attracting investments.

Introduce common capacity allocation mechanism

(coordinated auctions), establish one or more power exchanges

and implement price based market coupling.

Actions related to energy infrastructure shall ensure that there is

less chance of a ‘supply gap’ between energy demand and

supply, based on forecasts of demand and supply.

Interconnection plans are driven by the same needs that

includes connecting new generation, integrating energy markets

and new renewable energy in the grid, enhancing the security of

supply, and improving the reliability and quality of energy

services provided. Cross border interconnections capacities

have been identified already as priorities:

Actions related to energy efficiency and renewable energy

The most important action is to set and achieve a energy savings target.

Increase efficient use of energy final energy consumption, through

National Energy Efficiency Action Plans.

One of the key actions is to establish a target for renewable energy at

the national level.

Increase renewable energy share of gross final energy consumption in

line with the methodology

Allow priority access or guaranteed access to the grid for renewable

energy (RE).

Adopt and implement National Renewable Energy Action Plans.

Simplify and accelerate the authorization procedures for RE plants and

grid connections.

NEW POWER SECTOR LAW Main objectives

Creation of a legal framework that will secure e reliable and

continuous supply of power to its customers;

Creating a functional and competitive power market;

Minimizing the costs of suppy;

Protection and compliance with the environment;

Protection of vulnerable customers;

Ensuring the development of a transmission and distribution

network in compliance with the development plans.

Facilitating authorizing procedurs for new generating

capacities;

Opening the market, allowing the customers to freely

choose their supplier;

Guaranteeing all households and small non-households

the access to Universal Supply Service;

Fostering the role of the Regulator toward monitoring

and action-taking in cases when threatened the

priniciple of transparency and non-discrimination;

Promote competition, by charging the Regulator with

the role of preparing methodologies and tariffs that

cover costs.

NEW POWER SECTOR LAW Main objectives

Role and functions of TSO

Unbundling of Transmission System Operator including ownership

unbundling.

Certification of TSO befor issuing the new license from ERE.

10 year network development plan prepared by TSO and

approved by ERE.

Procurement of power for losses in transmission network,

balancingf and ancillary services based on competitive market

procedures.

Congestion managment and alocation of interconnection

capacities based on market based procedurs, ensuring proper

economic signals for alla network users.

TSO authorized to cooperate with neighboring TSOs for allocation

of interconnection capacities, including the creation of inter

transmission compensatin mechanism.

Role and functions of DSO

Unbundling of the function of distribution from the supply.

Preparation of a 5 years development plan for the

distribution network, to be approved by ERE.

New concept on closed distribution network, allowing

operation of a distribution network mainly used for

providing distribution service to a limited area on which is

located a production or services line and its facilities, not

bound to regulated conditions by ERE.

Preparation of distribution network development plans in

compliance with the transmission network development

plan.

TSO and DSO – responsible for the function of metering in

their network.

Draft Law provides for outsourcing of this service to a third

party.

Verification of meters from a third independent party,

authorized by General Directorate of Metrology.

Preparation of a roll - out for the implementation of a 10

year program on smart metering system.

Metering

Definition of the Universal Service to be offered under

specific conditions to the customers connected in low

voltage 0.4 kV.

Definition of Supplier of Last Resort service for the

costumer that lost their supplier.

Specific provisions for the execution of electricity bills ,

and enforce the lien binding for not executing payments.

Special provisions for consumer protection , including

special conditions for the protection of vulnerable

customers.

Supply

Within 31 December 2018 a organized market of

electricity will be created.

The role of Market Operator will be strengthened.

Customers connected to the level of 35 kV voltage are

obliged to be supplied into the liberalized market no later

than December 31, 2015;

Customers connected to 20 kV voltage, no later than

December 31, 2016;

Whereas customers connected to the 10 kV and 6 kV

voltages no later than December 31, 2017.

Costumers connected to 0.4 kV will provide energy for

their needs from the Universal Supplier.

Market Provision

ACTION RELATED TO PROTECTION OF CUSTOMERS

Phase out price regulation for large customers in line with the

Treaty.

It is important to ensure that vulnerable customers are protected.

In this regard, we have defined clearly in the law the definition of

vulnerable energy customers subject to special protection and

support.

Moreover, we have improved targeted national programs to

support vulnerable costumers should be implemented, as well as

programs to increase energy efficiency and greater use of

renewable energy in households.

Create a clear and transparent regulatory framework, set

standards for quality of services, handling consumer complaints,

and provide clear guidelines for changing energy supplier.

Long-Term Challenges

• Demand for energy to ensure economic and social development.

• What are the best practices to cover demand on a least coast principle.

• How to achieve short term increase of energy efficiency, in compliance with country's obligations deriving from EU directives.

• How to increase the use RES and maintain an economically viable approach to consumers.

• How to address cost reflective development of tariffs, to sustain private/public investment, and ensure customer protection

• How to effectively and efficiently support the vulnerable group.

Integrated Energy Management

• Diversification of energy sources by further developing

the gas market and its application from different sectors.

• Connection with Regional gas lines, TAP and IAP.

• Supporting new projects on national gas reserves, in the

frame of hydrocarbon agreements (declared discovery

from SHELL and Petromanas on the results of Shpiragu-2

perforation).

• Gasification Masterplan for Albania (MEI has secure

financing in the frame of WBIF).

• Investing on new generating units of electricity through

Gas TPP, initially Vlorë TPP for existing capacity of 97 MW,

and further expanding its capacity, or construction

/reconstruction of new/existing TPPs, such as Fier TPP.

ACTUAL PROJECTS IN GENERATION

Dams Safety Project

Under implementation the component Rehabilitation of the

Electromechanical Part of HEC Koman;

Rehabilitation of Bjefit of the HEC Koman.

Project for construction of HPP on the Devolli river

Construction of hydropower of Moglicë, 178.2 MW, 445 GWh /

year

Construction of hydropower of Kokel, 35,2 MW, 92GWh / year

Construction of hydropower of Banje, 64,8MW, 252GWh / year

Total production 278.2 MW 789 GWh / year - Total Investment of

about 940 million euros.

ACTUAL PROJECTS IN

TRANSMISSION

Construction 110 kV line Babice - Sarande (part of the South

corridor)

Construction of 110 kV Line Babice - Sarande

Construction of two substations Orikumi and Himara

Financed by KfW Construction of 110 kV Line Korce - Erseke -

Permet Tepelene - Memaliaj ( part of the South Corridor)

Construction of 110 kV line Ersekë - Permet - Tepelene -

Memaliaj Financed by KfW.

ACTUAL PROJECTS IN INTERCONNECTORS

The Project for the construction of 400 kV Line Tirana2 - Pristina A

Total length of 242 km. Length in the Albanian part 155.5 km of

which: 80.5 km completion of the second part Tirana - V. Dejes ( in a

400 kV line - Podgorica ) 75 km new line with a circuit V.Dejes –

Border (Morina )

Investment: About 34.3 million EUR loan for the Albanian part

financing by KfW ( 42 million Euro ).

Contracts :

Lot 1- Albanian part of the line 28.9 million ; contractor Energoinvest.

Lot 2 - Works in Sub /station; Albanian Part 5.4 million Euro.

Duration : 30 months from the delivery of the first installment.

Approximately around the end of 2016.

POTENTIAL PROJECTS GENERATION

The project for the construction of hydroelectric

stations on the Black Drini River ( HPP Skavica );

Hydropower Skavica New Village.

The project for the construction of hydroelectric

stations on the Vjosa river.

It is envisaged the construction of about 9 hydropower.

Installed capacity about 350 MW, average annual

energy produced 1,500 GWh with investment value

around 1 Billion Euro.

POTENCIAL PROJECTS

TRANSMISSION

The project for construction of 220 kV Transmission

Line Tirana 2 - Rrashbull and the Substation of

Rogozhina.

The project for the construction of 220 kV line

Elbasan, Fier and substation Kucova Ring.

The project for the construction of 110 kV substation

Tirana and Tirana 3.

POTENTIAL PROJECTS TRANSMISSION

In the Albanian part of the transmission network are

identified two suitable points for connecting

underwater cable with Italy.

Porto Romano area about 250 km length , the value of

investing about 530 Mln Euro

Vlora area about 135 km length , the value of investing

about 380 Mln Euro.

POTENTIAL PROJECTS INTERCONNECTORS

The project for the construction of 110 kV interconnection line

Kukes – Prizeren:

length for the Albanian part ( Kukes - Morine ) is about 11 km;

increase the security of Albania and Kosova system . This affects to

some extent in the regional security system interconnection.

realized a reduction of operating costs of systems of both

countries.

allows a better Dispatching generation of both countries,

helps optimize short - term and medium - term hydrological

resources in Albania and Kosovo.

The project for the construction of 400 kV interconnection

line Albania – Macedonia:

Increases security of electricity supply in our country and

improves electricity flows in the region, reduce electricity losses

in high voltage lines.

The value of the investment in the Albanian part is estimated

about 43 million Euro.

With the construction of this line ends connection of Albania

with 400 kV lines to neighboring border.

POTENTIAL PROJECTS INTERCONNECTORS

POTENTIAL PROJECTS INTERCONNECTORS

The project for the construction of 500 kV line interconnection

Albania – Italy. Advantages :

favorable geographic position, the distance between the

transmission networks in both countries is short.

the possibility of transit through the Albania transmission network

from Balkan countries toward Italy. Albania's transmission

network is already connected with the regional network and

exchanges between Italy and the Balkan region can be realized

without any restriction from the Albania network.

construction of new generation capacities mainly from

renewable sources in Albania, will create substantial surplus and

exporting towards Italy.

the possibility of preserving the balance of exchange from a

joint operation of hydropower to generate uncontrolled power

from wind and solar power, creating the possibility of an optimal

utilization of the line, charging it for its maximum capacity at any

time.

POTENTIAL PROJECTS Distribution

Investments in enhancing electricity production and

transmission capacities necessarily require investments in

improving and strengthening the distribution grid of electrical

energy, so that all investments go towards improving the

quality and security of electricity supply for customers.

Given the abuses that have been made with electricity, it is

imperative to intervene in the metering system as well.

Investments in the distribution of electricity include interventions

in the distributions system of substations, in the medium voltage

grid, in the TM/TU cabins, as well as in the low voltage grid.

To realize these investments, 150 million $ have been provided

from the World Bank, of which 93 million will be used for the

distribution system and 30 million for the installation of meters in

the distribution system of substations.

POTENTIAL PROJECTS SMART METERS

The implementation of SMART meters is subject to a preliminary

economic assessment which should take into account all long term

costs and benefits of clients and the market, the type of SMART

meters need to be the most economically effective, as well as the

proper time to implement this metering system.

The economic assessment will be prepared within 1 year from the

date of entry of this law. Based on this assessment, the Ministry

develops a SMART meters implementation timetable for a 10 year

period.

ERE will ensure the inter-operability of the different metering systems

which will be implemented in all over the country, paying proper

importance to the use of appropriate standards as well as the

development of the internal power market.

Projects of Energy Community

Interest

The projects were grouped into four categories:

Electricity Infrastructure Projects

Electricity Generation Projects

Gas Infrastructure Projects

Oil Infrastructure Projects

Electricity Generation :

Hydro Power Plant Skavica

Wind Park Dajc-VelipojeAlbania

Electricity Infrastructure :

AL - FYR of MK 400 kV OHL SS Bitola (FYR of MK) – SS Elbasan (AL).

Gas Infrastructure :

AL-ME-HR-BiH Ionian Adriatic Pipeline (IAP)

THANK YOU

Presentation: Extractive Industry Transparency Initiative - EITI in Albania

Dorina Çinari, Director, Extractive Industries

Transparency Initiative (EITI) Albania

Albania Oil, Gas & Energy 2015 Summit Tirana March 17-18 , 2015

THE UNDERGROUND Transparency on Shared Wealth

What is the ? The Extractive Industries

Transparency Initiative (EITI) is a global

coalition in which governments, companies and civil society work together for transparency and accountable management of revenues from natural resources.

EITI principle: A country’s natural resources belong to its citizens! Wealth from natural resources can lead to economic growth and social development in a country. Not disclosing information about this wealth can increase the risk of distrust, weak governance and conflict. Openness about how a country manages its natural resources is necessary to ensure that the resources benefit all citizens.

Through implementing the global EITI transparency standard, countries ensure more transparency of revenues from its oil, gas and mineral resources

Many countries suffer the "resource curse“, the paradox that countries with abundant oil, gas and mineral resources are economically poorer than countries with fewer of these resources.

• The is a global standard for the governance of a country’s oil, gas and mineral resources. The standard is implemented by governments, in collaboration with companies and civil society.

• Countries implementing the EITI disclose

information on tax payments, licences,

contracts, production and other key elements around resource extraction.

48 countries now implement the EITI Standard around the world. USA, UK & Germany have joined the initiative late 2014

$1,5 Trillion USD disclosed

35 Countries have produced reports

Supporters

• Over 90 major companies involved in oil, gas and mining are committed to supporting the EITI, through operations in implementing countries, international-level commitments and industry associations. The EITI has won the support of over 90 global investment institutions that collectively manage over US $19 trillion.

• A broad coalition of governments, civil society and international organisations supports the EITI, including 400 NGOs, World Bank, International Monetary Fund, International Council on Mining and Metals and the regional development banks. These organisations provide technical and financial support to implementing countries, and support EITI outreach.

The EITI Standard has two core elements:

Governments, together with companies and civil society, work to improve the management of natural resources by implementing the EITI Standard.

Revenue Collection Productio

n Data

State Owned

Enterprises

Sub-National

Revenue Management

Allocation of Rights

Social Impact

From extraction to development

How is value captured?

Where do benefits go?

What’s the benefit of

EITI?

A transparent and open government enhances citizens’ trust. By adopting an internationally recognized transparency standard, governments perform in an improved investment climate by providing a clear signal to investors and international financial institutions that the government is

committed to greater transparency, commitment to reform and anti-corruption in a volatile sector.

Implementing the EITI Standard improves government systems and can lead to improved tax collection and budgetary plannings.

EITI also assists in strengthening accountability and good governance, as

well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of conflict based around the oil, mining and gas sectors.

Governments

What does an investor seek? • Stability, • Certainty • Clarity of country tax rules and procedures. Benefit from a level playing field in which all companies are required to disclose the same information.

Benefit from mitigating political and reputational risks. Political instability caused by opaque governance is a clear threat to investments. In extractive industries, where investments are capital intensive and dependent on long-term stability to generate returns, reducing such instability is beneficial for business.

Transparency of payments made to a government can also help to demonstrate the contribution that their investment makes to a country enables a better engage with citizens and civil society.

Companies

A country´s EITI Report informs the public of what happens with its natural resources. Benefit from Reliable and accessible information about their country’s natural resources. Benefit increasing the amount of information in the public domain about those revenues that governments manage on behalf of citizens, thereby making their governments more accountable. Civil society is an essential partner in implementing the EITI.

Citizens and Civil Society

CEO 2014

EITI Albania Objectives

1. Show direct and indirect contribution of extractives to the economy

2. Increase public understanding of the management of natural resources and public accessibility of data

3. Strengthen national resource management / strengthen government systems

4. Track how revenues are allocated and spent, in particular at local levels

5. Create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders

6. Strengthen business environment and increase investments

Implementation timeline

1,081

1,144

1,240

1,301

1,335

- 200 400 600 800 1,000 1,200 1,400 1,600

2008

2009

2010

2011

2012

Total PBB ne miliarde Lek Kontributi ne % i industria nxjerrese (GDP)

5.6%

4.3%

3.1%

2%

2.4%

Contribution of Extractive Industries towards GDP 2008-2012 in billion ALL

EITI disclosure mandatory in Mining Code (October 2014) In the framework of the global initiative for transparency in extractive industries, EITI Albania, has the right to ask and receive information from the mining operators, as well as from the Tax, Customs and Local Administration. EITI Albania has the obligation to publish to its annual EITI reports the data on the payments of fiscal obligations by the mining operators. EITI disclosure mandatory in Hydro-carbons law nr. 7746, date 28.7.1993 (Exploration and Exploration), (March 2015)

In the framework of the global initiative for transparency in extractive industries, the licensed operators, as well as Tax, Customs Directorates and Central and Local Administration have the obligation to report according to the EITI standard and in accordance with the regulations issued based on EITI standard. EITI Albania has the duty to publish these data to its annual EITI reports according to the EITI standard.

EITI Legislative Agenda

Revenue Potential The main objective of this study will be to examine the potential contribution of the Albanian oil and mining sector to income and growth of the wider economy, with a focus on identifying binding constraints that are open to government action.

Hydro-energy scoping study The main objective of this study will be to assess the contribution of the hydro-energy sector to the country GDP and state budget with the intention to include this sector under the “cadre” of Albania EITI reports

EITI Data Integrated Management Systems feasibility study The study will seek to produce a technical report which will inform the current status of the IT systems of state agencies with regard to EITI data reporting, and propose a solution for integration of EITI data

EITI Studies Agenda

The US recently enacted mandatory disclosure legislation as part of the US Dodd-Frank Financial Reform Act, (Cardin Lugar amendment) requiring that all companies listed in the US disclose their payments to governments in all countries where they operate.

Goal: Ensure that the poorest citizens can also reap the benefits of the natural resources boom

Other complementary efforts to improve revenue transparency?

This law shines a light on billions in payments to governments from oil, gas and mining companies.

What does the law require and achieve? Oil, gas and mining companies are required to disclose what they pay to the U.S. government and foreign governments as part of their annual filings to the U.S. Securities and Exchange Commission (SEC), which is the agency that regulates the U.S. financial sector.

Extractive transparency in EU fast becoming a reality

As a response to international efforts on transparency the

European Union has passed similar legislation for the New EU Reporting

Standards through its CBCR Initiative that will :

• Adapt existing EU legislation to promote transparency and good governance as regards the exploitation of natural resources

• Oblige multinational compagnies to disclose payements to governements

on a country and Project basis. Listed and large unlisted companies in the EU with activities in the oil, gas, mining and logging sectors will be affected by this legislation

Thank You www.albeiti.org

Please visit us at:

www.albeiti.org

www.eiti.org

Presentation : The National Economic Council; Fostering Business-Government dialogue

Elona Varfi, COO,

National Economic Council (NEC)

NATIONAL ECONOMIC COUNCIL (NEC)

TIRANA, MARCH 17-18, 2015

What is the National Economic Council (NEC)?

Institutionalization of the consultation process between the business community and the government

A discussion platform for economic policies and

development reforms in Albania

It is not an organization or institution but a process

NEC Purpose The National Economic Council ensures:

Institutional cooperation and the public-private partnership;

Dialogue and consultation between the government and the private sector;

Transparency on public decision-making and the representation of the public sector in this process.

Law on Establishment and Operation of the National Economic Council (law no. 57/2014, art. 1)

The Secretariat of NEC

Headed by the Secretary General Supports, coordinates and organizes NEC activities Operates a web portal (www.kek.al) for receiving from

business organizations comments, observations, proposals and denunciations on arbitrary practices, analyzes and distributes to the relevant authorities the processed information

Monitors and mediates the dialogue between the public authorities and the private sector

Consultation Process Consultation is mandatory

Publication

Consultation

Engagement of interest groups

High representation periodic meetings

Exchange of comments, suggestions or proposals via www.kek.al

Other forms of meetings, subcommittees, etc.

A Three Way Consultation Process:

NEC Interactive Portal

www.kek.al is freely accessible by everyone but only business organizations can upload comments, proposals and denunciations

Drafts of laws and secondary legislation affecting the economy of the country should be published for sixty (60) days in the web portal for review and comments of the business community

Periodic Meetings

Periodic meetings are held every month led by NEC Chairman, the Prime Minister of Albania.

Once in three months, special meetings are conducted with the participation of foreign representatives and academics of economic background.

NEC Participants Permanent participants are:

The Minister responsible for the economy The Minister responsible for finance Secretary General The Governor of the Bank of Albania Six personalities of national and world economy Six largest taxpayers of the business community, domestic or foreign (rotated on semestral basis) Four business organizations (rotated on semestral basis)

Other Participants The representatives of international organizations permanent members of NEC , including but not limited to:

International Monetary Fund - IMF

International Financial Corporation - IFC

World Bank - WB

European Bank for Reconstruction and Development – EBRD

The Director General of Taxation

The Director General of Customs

The Investment Committee

Supported by EBRD

Provides NEC with:

Studies

Reports

Recommendations

Operates as an economic ombudsman

Key policy issues covered 11 monthly meetings so far, where many issues of importance

to business were discussed and consulted: The Agreement of Albania with World Bank and IMF The payment of arrears to private businesses EU negotiation process New VAT law Structural reforms Pension reform Reduction of Informal Economy Challenges in the Energy Sector Tourism The draft budget for the year 2015 2015 Fiscal package

NEC Activities • Forum presenting the New Customs Code project.

• Forum organized between private producers and Minister of Energy and Industry on “The problems the sector encountered, market perspectives and forms of cooperation”, which led to the signing of a Memorandum of Understanding between the Ministry of Energy and Industry and the Albanian Renewable Energy Association

• Roundtable on "The Role of the Taxpayer Advocate: Challenges and the Future”

• Business Forum for the “Pharmaceutical market in Albania

• Roundtable “On the unpaid energy the State owes to Private Producers”

• Roundtable on “The potential involvement of banks in financing the Albanian Power Corporation”.

Challenges for the future

Optimise NEC's role

Increase the efficiency of NEC and the quality of the dialogue

Improve NEC's representativeness and credibility

Raise the profile of NEC

National Economic Council

Follow us

www.kek.al

Keynote Presentation from the Ministry of Energy and Industry - Electricity Directorate

Agim Bregasi, Director of Policies and Development

of Electricity, Ministry of Energy and Industry

Ministry of Energy and Industry

ALBANIAN GOVERNMENT’S POLICY

FOR ENERGY SECURITY

AGIM BREGASI: DIRECTOR OF POWER SECTOR Tirana, 17-18 MARCH 2015

Domestic production and Consumption

The data for the period 1985 – 2012 Annual Report 2012 published by the Energy Regulatory Autority.

Të dhënat për periudhën 2013-2025 janë projeksion bazuar mbi të dhënat aktuale.

1. Changing the electric energy sector in a profitable sector by

fulfilling its financial obligations towards the state’s budget;

2. Increase Security of energy supply:

a. Increase of generation capacity;

b. Increase of transmissions capacity;

3. Drafting a legal framework and market model in compliance

with EU Directives and the 3-rd Package of internal markets;

4. Setting power tariffs and prices to cover costs of activities.

5. Further liberalization of the market

6. Drafting a National Energy Strategy in compliance with

Roadmap 2030;

Vision of the Government

Development of the Sector

Planned actions

• Increasing Distribution sector accountability and performance;

• Achievement of objectives on lowering losses and increasing

collections;

Legal Reforms in the Power Sector

• Drafting a new law “On the Power Sector”, amending

the existing law in accordance with EU Directives and 3-

rd Package;

• Drafting a new law “On Renewable Energies” and “On

Energy Efficiency”;

• Drafting of sub-legal and regulatory acts of these laws;

• Tariff reform.

National Energy Strategy (2016 – 2030)

• The National Energy Strategy (2015-2030) is foreseen to be completed within

2015 and it includes:

• Fulfilling power demand according to the “lowest-cost” principle;

• Increasing RES/ EE in all sectors in compliance with EU directives and the

Treaty of Energy Community;

• Using natural gas after implementing TAP project;

• Long-term progress of power tariffs and prices;

• Regional cooperation for establishing a regional market.

Main power production and transmissions

projects

Main projects for increasing power generation capacities :

1. Construction of Skavica HPP;

2. Construction of HPPs in Vjosa river;

Main projects for increasing interconnections transmission capacity:

1. Construction of 400 kV line Albania – Kosovo ( in construction )

2. Construction of 400 kV line Albania – Macedonia

3. Construction of 400 kV line 400 kV Albania - Italy

Main projects for increasing in-country transmission capacity:

1. Construction of 220 kV line Tirana 2 – Rrashbull and 220/110 kV ESS in Rrogozhinë

2. Construction of 220 kV line Elbasan – Fier and 220/110 kV ESS Kuçovë

3. 110 kV Tirana Ring and Tirana 3 ESS

Skavica HPP (Drini i Zi River)

What represents Skavica HPP: • Located in north east of Albania

• Unused part of Drin river

(Drini i Zi)

• Upper HPP in Drin River Cascade

• Regulatory role for the Cascade

• Preventive role on floods of lower–Shkodra zone

• Existing pre-feasibility study with acceptable options

1. Skavica HPP;

2. Katundi i Ri HPP.

Drini River Cascade (Ohri – See)

Scheme with two HPPs: longitudinal

profile of the Cascade

CHARACTERISTICS

HPP Altitude of the dam Power Energy Cost Katundi i Ri 445 m 49 MW 206 GWh 99.5 mil EU

Skavica 385 385 m 119 MW 467 GWh 214 mil EU Total 168 MW 672 GWh

Alternative:

Katundi i Ri 445 m 49 MW 206 GWh 99.5 mil EU

Skavica 395 m 395 m 132 MW 488 GWh 248.3 mil EU

Total 181 MW 694 GWh 337.8 mil EU

This alternative is more acceptable from the generation point of view and from the regulatory role of Skavica reservoir, but comprises high environmental and social impacts, along with high expropriation costs

(without including the benefits of the

generation from the existing HPPs)

Vjosa River HPPs

What represents Vjosa River:

• Located south of Albania

• Second river enlisted by its power potential

• No other HPPs built on its stream

• Stable and considerable flow

• Certified multi-year measurements

Existing preliminary feasibility study:

• Identified 3 main branches;

• Determined the possibility of building 9 HPPs

Longitudinal Profile of the Cascade with the

Proposed HPP’s

CHARACTERISTICS- SOGREAH Scheme

CHARACTERISTICS - MEI consultant Scheme

Transmission capacities with regional countries

o Existing interconnection lines: 1. 400 kV line Elbasan (Albania) –

Kardhja (Greece) 2. 400 kV line Elbasan (Albania –

Podgorice ( Monte Negro) 3. 220 kV line Fierze ( Albania ) –

Prishtine ( Kosovo ) 4. 220 kV line Vau i Dejes

(Albania) – Podgorice ( Montenegro )

5. 150 kV line Bistrica 1 (Albania ) – Igumenice (Greece)

o Interconnection lines In construction 400 kV line Tirane (Albani)-Prishtine (Kosovo) oNew interconection line: 1. Albania – Macedonia 2. Albania - Italia

New interconnection lines with regional countries

1. 400 kV Interconnection line Albania-Kosovo;

• Investments value for Albanian near 42 milion Euro

2. 400 kV Interconnection line Albania-Macedonia

• Investments value for Albanian near 28 milion Euro;

3. 500 kV Interconnection line Albanian –Italy;

There are two options:

• From Porto Romano, length 250 km, investment value near 530 Mln Euro

• From Vlora, length 135 km, investment value near 380 Mln Euro

Interconnection line 400 kV , Tirana 2 – Kosova B

The project is a German Government investment financed by KfW Bank, 42 million Euro Albanian Part and includes: Lot1: Substations Extension: new 120 MVAr shunt reactor in Tirana2 Ss; Joint LFC for two control areas (OST and KOSTT), Kosova2 Substations Extension. Lot2: 400 kV overhead line. Total length of the line 242 km (162 km new line and 80 km completion of second circuit of the part of Tirana-Podgorica line, from Tirana to Lac Qyrsaqe). 90 km Kosova part, and 152 km Albanian part. The project is under implementation stage and is expected to be in operation on beginning 2016.

This project comprises:

- The construction of the new 400

kV interconnection line, Elbasan-

Bitola, approximately 151 km long,

56 km in Albanian territory.

- The extension of the 400 kV

Elbasan2 substation by new 400 kV

double busbars, new 400 kV line

bays and 120 MVAR shunt reactor.

- Feasibility study of this project,

funded under the WBIF projects,

is prepared by the consortium

COVI / IPF in 2012.

What realizes? - Increases the security of

electricity supply to our

country,

- Improves circulation flows in

the region

- reduces electricity losses

.

400 kV interconnection line Elbasan- Bitola

(Macedonia)

A substantial „Regional Integrated Gasification - Initiative“ is the

possible interconection of Albania with regional gas market.

IAP

TAP LNG TERMINALS

IGI

WBR

Thanks for your

Attention!

Agim BREGASI

MINISTRY OF ENERGY AND INDUSTRY Directory of Power Sector

Bulevardi “Deshmoret e Kombit”, Tiranë, Shqipëri

Mob: +355 66 40 56 186

agim.bregasi@energjia.gov.al | www.energjia.gov.al

Presentation: An overview of Albania’s greatest energy source – Hydropower

Aas Agnar, Director of Governmental Affairs, Devoll

Hydropower, Albania

DEVOLL HYDROPOWER PROJECT ALBANIA OIL, GAS & ENERGY 2015 SUMMIT

Tirana March17-18 2015

Agnar Aas

Director of Governmental Affairs

2

Statkraft’s production

Peru 163 MW (+ project)

Chile 94 MW

Turkey 20 MW (+ projects)

Nepal 23 MW

Philippines 149 MW

Brazil 86 MW

Panama (project)

Zambia 6 MW

Norway 12 518 MW Sweden

1 315 MW

UK 273 MW

Laos 100 MW

Germany 2 692 MW

India 91 MW

Installed capacity

17 600 MW Power production

56 TWh

97% renewable energy

3 600 employees

SN POWER/ AGUA IMARA

STATKRAFT

Albania (project)

*

* 2013 figures. Includes: - Statkraft/SN Power’s share of installed capacity

Statkraft in Europe

4

Norway

The Netherlands

United Kingdom

Belgium

France

Sweden

Finland

Germany

Turkey Albania

Romania

Serbia

Bulgaria

Overview

5

256 MW 729 GWh 535 Mill.€

Time Schedule

BASE CASE PROJECT IMPLEMENTATION TIMESCHEDULE

Activity

H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2

Concession Agreement into Force

Pre-Construction Phase

Preparatory Works - Banja

Preparatory Road Works - Moglicë

Construction Transmission Lines

Construction Banjë HPP

Construction Moglicë HPP

Construction Kokël HPP

2015 2016 2017 2018 201920142009 2010 2011 2012 2013

Current stage

Required by Albania law: Strategic Environmental Assessment

Environmental and Social Screening

Environment and Social Impact Assessment (ESIA)

ESM Planning based on international best practice:

7

Recommended by International best practice: DHP Sustainability Policy

ESIA Planning Report

Pre-feasibility Study

Environmental and Social Scoping

Strategic Environmental Assessment

Environment and Social Impact Assessment (ESIA)

Entitlement Matrix

Environment and Social Management Plans

Grievance Redress Mechanism Policy

Annual Implementation Plans

Banja HPP

8

70 MW 254 GWh

9

February 2015

10

February 2015

Existing Dam 2012

Grouting gallery

Core

Cofferdam

Support fill (river gravel) )

Filter

12

February 2015

13

February 2015

14

February 2015

Moglice dam and spillway

15

Picture

16

Picture Dam site

Road M15 – By-pass around Moglicë dam and spillway

Road Works

17

Road Works

18

Statkraft’s presence in SEE

Enter into the Albanian electricity market

- import power into Albania - export power out of Albania - transit power through the

Albanian grid

19

What’s happening in Balkan. Albania

- WB/OST - MEI New Energy Law

Transmission Lines - Albania – Kosovo - Subsea cable Montenegro – Italy - Albania – Macedonia

Power exchange Serbia ??

Coordination Auction Office Montenegro

20

Development in Albania

New Energy Law - Secondary legislation - Market Design

Day Ahead Market - Hourly prices required for;

- planning hydro generation - optimize import and exports

- More transparency - Reduced credit risk - Invoicing only against the exchange; - Automation and standardization - Comply with EU Target model - Facilitate price coupling w/other markets

21

one day ahead - auction trade -

Day Ahead Market

Market equilibrium

Balancing generation

and consumption in realtime

Balancing Mechanism

www.statkraft.com

THANK YOU Agnar.Aas@statkraft.com +355 68 909 8803

22

Presentation: An overview of the mining sector in Albania

Mehmet Hasalami, Policy and Development Directorate of Mines, Ministry of Energy and

Industry

Prepared from Mehmet HASALAMI

MINISTRY OF ENERGY AND

INDUSTRY

15 March 2015

TIRANA

3

Privatisation

Creating a legislative and administering framework based on the market economy principles

Mining right

Concession

Reforming of mining industry towards the free market economy

The closure of non-efficient mines

to incite, support and encourage the development and increment of of domestic production.

Mining activity in Albania Restructuring

Objectives for Developing of Mining Sector

MINING ACTIVITY LEGISLATION

• The first Mining Law of Albania is approved on 1994, and amended continuity.

• New Mining Law, amended recently, made some changes:

New concept of territory planning (including the concept of mining strategy and

programming of mining activities by offering of Mining areas to investors and competition

process through a new transparent way for granting of mining rights)

Facilitating of the licensing procedures (concept of one stop shop) as well as the promotion

of mining areas on line through a digital map on GIS and Data Base of Mining Industry

Participation and benefits of local authorities and community

New provisions on Minerals promotion, Monitoring and supervision, Health and Safety in

mining activity and Monitoring of post mining activities-mining closure

5

MINING ACTIVITY LEGISLATION

Addressing of environment and social issues

Increase of the institutions

Professionalism and Transparency (participation on EIT Initiative)

New concept of financial surety for environment rehabilitation, mine closure,

rehabilitation of the waste deposit area.

Financial surety for realization of the minimum working program for

prospecting exploration permits

Financial surety for realization of investment program calculated annually of 10

% of the investment value.

New concept for professional licensing process

New concepts for closure of abandoned mines, conservation, rehabilitation

6

MINING ACTIVITY LEGISLATION

• The new law FOR MINING SECTOR IN THE REPUBLIC OF ALBANIA is

composed from 10 chapters:

• 1. GENERAL PRINCIPLES ( scope, field, definitions)

• 2. MINING STRATEGIC PLANNING

• 3. MINING RIGHT CLASSIFICATION AND TYPES OF MINING PERMITS ( four groups of minerals three

types of permits)

• 4. PROCEDURES FOR GRANTING OF PERMITS, LICENSES AND AUTHORIZATIONS

• 5. GENERAL RIGHTS AND OBLIGATIONS OF HOLDERS OF MINING RIGHTS, ROYALTY

• 6. TRANSFER OF THE MINING RIGHTS FROM THE HOLDER OF MINING RIGHTS

• 7. SUPERVISION AND MONITORING OF MINING ACTIVITIES AND MINING CADASTRE

• 8. PENALTIES, SUSPENSION, TERMINATION OF THE MINING RIGHTS

• 9. MINING DATA AND CONFIDENTIALITY

• 10. CLOSING AND CONSERVATIONS OF MINES

•

7

The Study for the Master Plan for Promoting the Mining Industry in Albania. 8

Policy and action programs for the management of mining activities

Sustainable development of Albanian economy based on short-mid-long terms objectives,

Maximum profit of Albanian citizens,

Re-evaluation of mining resources,

Territorial planning, land use strategy,

Transparency to the public , transparency on decision making,

Good governance, continuity of reforms,

Figh the poverty specially in rural areas,

Employment,

Improvement on economical and financial balance of the country by development of exports,

Environment friendly

Participation of communities

Increase of revenues of the local authorities through percentage in royalty and other taxes

Fight the coruption

OTHER

POLICY MEASURES Promoting takeovers: programmes for creative industries, expand

microcredit schemes in rural and urban areas;

Improve business services: Establishment of SME portal, TNA for

business needs, training for entrepreneurs etc;

Increase institucional capacities in MEI : Increase Competitiveness

Policy Department, unit for inovation and technology transfere;

11

Main Minerals and their Reserves

Quantity 33 million ton

12

Main Minerals and their Reserves

Quantity Copper 24 million ton Bauxite 16 million ton

Quantity Iron nickel 160 million ton Nickel silicate 103 million ton

13

Main Minerals and their Reserves

Quantity Coal 700 million ton

14

Minerals and Mining activity in Albania