The Players on the European Gas Market: Positioning and ...€¦ · Traders TXU, Duke, Dynegy Gas &...

Fifteenth annual session of the Working Party on Gas - UN - Geneva, 18-19 January 2005

The Players on the European Gas Market: Positioning and Strategies

M.-F. Chabrelie - A. LecarpentierCEDIGAZ


Increasing links, interdependence and heterogeneousEuropean energy markets

Liberalisationgas release programmes Gas demand

Gas suppliers to EuropeGazprom, Sonatrach, ExxonMobil, Shell...

Power companiesEON, RWE, Enel, EDF, Union Fenosa

New players (Plurigas, Energia,..)

Merchant gas companiesENI, Centrica, Ruhrgas,

Gaz de France, Gasunie..

Multi-utilitiesTraders

TXU, Duke, Dynegy

Gas & PowerInter fuel competition


Top ten European proved gas reserves holders in 2003

0

200

400

600

800

1000

1200

Petoro

ExxonMobil

EBN*

Shell

Statoil

Norsk

Hyd

ro

Total Eni BPCon

ocoPhilli

ps

Bcm

0%

20%

40%

60%

80%

100%

European proved reserves European gas reserves as % of world gas reserves

=> European reserves = key assets


Evolution of total European gas production vs

Top ten European producers

Top ten producers

0

50100150

200250300

Bcm

1995 1996 1997 1998 1999 2000 2001 2002 2003

European production

72.5%80.7%

238.6 Bcm 292 Bcm

=> trend towards bigger concentration


Top ten European producers in 2003

0

5

10

15

20

25

30

35

40

45

50

ExxonMobil

Shell

EBN*

Petoro

Total

Statoil

Eni BPCon

ocoPhilli

ps

Centri

ca

Bcm

0%

20%

40%

60%

80%

100%

European gas production European gas production as % of world gas production

=> Europe a core area


European producers in 2003 &European R/P ratio (years)

0

5

10

15

20

25

30

35

40

45

50

ExxonMobil

Shell

EBN*

TotalStat

oil-SDFI

Eni BPCon

ocoPhilli

ps

Centri

ca

Bcm

0

5

10

15

20

25

30

35

40

year

s

European gas production European R/P ratio


Evolution of total European gas imports vs

Top ten European importers

Top ten

0

50

100

150

200

250

300

Bcm

1996 1997 1998 1999 2000 2001 2002 2003

European imports

92.1%

86.7%

196 Bcm 277 Bcm


Top ten European importers in 2003

0

5

10

15

20

25

30

35

40

45

50

ENIGaz

de Fran

ce

Ruhrgas

Distrig

asGas

Natural

Wingas VNG

BEB

Gasunie

OMV

Bcm

2003 1999


Top ten European suppliers in 2003

0

10

20

30

40

50

60

70

80

90

100

Gasunie ENI

Ruhrg

asGaz

de Fran

ce*

Centri

ca

Distrig

asGas

Natu

ral

BEB

Wingas

VNG

Bcm

2003 1996* Total supply


Europe‘ s* largest gas companies

Share of sales abroad

Companies 2002 2003Gasunie 54.3% 55.8%

Gas Natural 35.9% 43.3%RWE Gas 27.0% 41.0%Distrigas 35.4% 37.4%

Gaz de France 21.9% 38.3%ENI Gas & Power 23.4% 32.6%

Ruhrgas 10.9% 11.7%

* EU-25

0 10 20 30 40 50 60 70 80 90

Gasunie

ENI

Ruhrgas

Gaz de France

Centrica

RWE Gas

Gas Natural

Distrigas

BEB

VNG

Wingas

Edison

Gasum 2003

2002

Bcm


Gas competition on the major markets

Netherlands

Company Free market share

Spain Italy

Gasunie 65%

10 - 20%

Norsk Hydro/Duke

1 - 10%

Essent, Nuon, Eneco, Centrica, BP, Delta

< 1%

RWE, NRE, NM/Ons, Westland

Company Free market share

Gas Natural 58%

BP 11%

Iberdrola 11.5%

Cepsa GC 6%

Shell 3%

Endesa 4%

Un. Fenosa 3%

Hidrocanta. 1%< 1%

Edison

Company Overall market share

Source: The Players on the European gas market, Cedigaz, December 2004

ENI 68%

Edison 13%

Enel 12%

Plurigas 4%

Hera 2%

Energia 1%

E.ON Thüga 1%

< 1%

Italcogim, Dalmine, Blugas, BP, Electrabel, Gas NaturalVendita, E Noi, Eos Energia, Utilita, Energas Italian gas

distributors


Gas competition on the major markets

France Germany Belgium

83%

<4%

Total Gas & Power, BP Gas, Norsk Hydro, Distrigaz,

Ruhrgas, Eni

Ruhrgas 56%

RWE Gas 16%

VNG 15%

Wingas 11%1 - 10%

BEB*


Source: The players on the European gas market, Cedigaz, December 2004

Distrigaz 92%

Gaz de France 5%

BP Belgium 2%< 1%

Wingas



Gaz de France

Total (+GSO) 10%

«Régies» 3%

<1%

Gaz de France, Nuon, BP Gas, natGas, Essent

* After BEB demerger operation


Producers searching for new business opportunities in gas distribution

• Moving downstream with their gas businesses is a priority of oilcompanies’ policy to safeguard markets for their gas reserves

• Acquisition of distribution companies (ENI in GVS or GalpEnergia, Shell in Epa Attiki)

• Possibility of direct sales to customers by acquiring licenses

• Reconsideration of their shareholding interests (BP in Ruhrgas, Shell and Exxon in Gasunie)

• Withdrawal from the regulated business (Repsol from Enagas, ENI from SNAM, BG from Transco)


Companies’ strategies and positioning

• Gas transmission and distribution companies move upstream to secure direct access to supply (Gaz de France’s goal is to supply up to 15% of its market with its own reserves) and expand their assets at all stages of the chain.

• Power utilities look for direct access to the resource: power utilities in liquefaction (Union Fenosa in Oman, Egypt), in shipping, in regasification(Union Fenosa, Iberdrola, Endesa, Enel, Edison have stakes in planned LNG receiving terminals).

• Producers also move downstream and want to secure a direct access to the markets:

Sonatrach has reserved capacity in Grain LNG terminal (UK), has a 10% stake in the Reganosa project (Spain),...

Gazprom has established alliances with European partners and has a stake in the UK-Interconnector.

Statoil expands its business in spot trading (Hubco) and expands into downstream activities outside of Europe (US).


Conclusion

• Industrial transformations - acquisitions and alliances - have been dramatic and very fast

• This wave of restructuring is likely to continue as markets become more and more competitive

• It strongly affected the gas market structure along the whole gas chain as borderlines between producers, buyers, sellers, distributors, electricity suppliers and generators are continuously shifting

• Gas company concept is evolving towards the international multi-energy or even multi-utility group

• Potential risk of concentration of these giant energy companies dominating global utility markets?

The Players on the European Gas Market: Positioning and ...€¦ · Traders TXU, Duke, Dynegy Gas &...

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