Energise - Gazprom

THE NEWSLETTER OF GAZPROM MARKETING & TRADING … ISSUE 2 – SEPTEMBER 2012 

Energise 

ENTER

ISSUE 2 – SEPTEMBER 2012 

Energise 

Welcome to issue 2 of your quarterly news 

roundup from Gazprom Marketing & Trading 

CONTENTS 

FEATURES 

GOING DUTCH 

Gazprom Energy’s new Netherlands office is now fully operational and has 

concluded its first major deal 

KEEPING THE LIGHTS ON 

How cost, security of supply and environmental factors are driving 

fundamental changes in European energy policy 

HIGH ENERGY TREASURY 

A smart and agile approach by GM&T’s Treasury department is helping to 

power the company’s extraordinary growth 

REGULARS 

GLOBAL OUTLOOK 

A round-up of business news and information from around the world 

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GOING DUTCH 

Gazprom Energy’s new office in ‘s-Hertogenbosch, 

Netherlands has agreed a major deal to act as the energy 

partner of procurement specialist ProQure B.V. on a number 

of strategic accounts including Audi, Volkswagen and Skoda 

dealer networks across the country and logistics giant 

Kuehne + Nagel. 

Aiming to build on its strong customer-focused reputation, 

that is already established in the UK, Ireland and France, 

Gazprom Energy officially opened its ‘s-Hertogenbosch 

office in April 2012. “By working closely with ProQure we can 

bring together our energy expertise and combine it with 

best-in-class procurement processes,” said Sytse Van Heijst, 

Head of Benelux. “We are constantly evolving our solutions 

in line with feedback from ProQure and the end customers 

to shape our future development.” 

Specialising in business services including IT, travel, energy, 

recruitment and marketing, ProQure selected Gazprom 

Energy on the basis of best prices, efficiency, quality of 

service and a business ethos compatible with their own. 

“We pride ourselves on giving clients a very personal touch 

and we need a similar approach from our suppliers,” said a 

spokesperson for ProQure. “Clients want to know that their 



energy supplier is going to deliver a consistent and reliable 

service, with no need to spend time chasing clarification or 

explanations. 

“Currently it is very difficult for end user organisations to 

even understand their bills, never mind the contract offers 

they receive. We found Gazprom Energy to be the most 

transparent in both its contract and billing processes. 

Working together, we believe we can offer clients the best 

value on the market.” 

Benelux: a new approach 

The initial focus of Gazprom Energy’s Benelux office 

in ‘s-Hertogenbosch is to supply gas to industrial and 

commercial consumers in the Netherlands at a fixed price or 

against a market index. 

Having secured a Dutch Gas supply licence from the 

country’s energy regulator and a full shipping licence from 

the Dutch national gas transportation authority, Gazprom 

Energy is allowed to ship and supply gas to every individual 

meter in the Netherlands. 

Gazprom Energy is looking to move into the power market 

by the end of 2012 and start supplying gas to Belgian small 

and medium enterprises (SME) in 2013. 



Sytse van Heijst, Head of Benelux (far left) joined 

Gazprom Energy in 2011 to set up its branch in the 

Netherlands which opened in early 2012. The Dutch 

team (l to r) are Mike van de Bor, Erik Dolman, Mike van 

Suijdam, Sandra van Velthoven, Manfred Bartels and 

John van Bijsterveldt 



KEEPING THE LIGHTS ON 

GM&T’s Head of Regulatory Affairs Alex Barnes explains the 

fundamental changes taking place in energy policy and 

electricity markets. 

Electricity markets are undergoing fundamental change. 

Across Europe there are a number of potentially conflicting 

energy policy goals. Firstly, there is energy market 

liberalisation, the idea that, wherever possible, there should 

be competition in the production and supply of electricity. 

One aim is that the lowest cost source of electricity is the 

one which provides power to the grid. This can create 

huge benefits to consumers in terms of lowering costs and 

ensuring that industry in Europe is competitive. 

The second goal is security of supply. It is essential that 

power supply matches demand on a minute by minute 

basis – which is why National Grid controllers pay close 

attention to the advert breaks in popular TV shows to be 

ready for when everyone puts the kettle on. There must 

always be sufficient sources of generation to meet demand 

in the event that some sources of power are not available. 

Lastly there is the issue of combating climate change. 

European governments have signed up to the “20-20- 

Alex Barnes, Head of 

Regulatory Affairs 



20” targets which mean that by 2020 the EU should have 

reduced energy consumption by 20 per cent, greenhouse 

gas emissions should be reduced by 20 per cent compared to 

1990 levels, and 20 per cent of energy should be provided by 

renewables. 

So what are the implications for electricity supply, and the 

cost to consumers? The targets imply a large increase in the 

use of renewables for electricity since it is less feasible to use 

them in transport fuels or heating (unless of course heat is 

provided by electricity, which implies greater renewable 

generation capacity). Plenty of renewable technologies exist 

– hydro, solar, wind, tidal – but they are more costly than 

conventional technologies such as gas fired Combined Cycle 

Gas Turbines (CCGTs). Renewables are also not always reliable 

as the wind does not always blow at a constant strength, and 

the sun can go behind a cloud. 

These characteristics have profound implications for the 

first two policy goals. On their own, renewables cannot 

compete with existing technology in a liberalised market. 

They require subsidies because of their high capital costs (the 

same will apply to nuclear power in the UK). This can depress 

power prices when renewables are generating, as they 

are indifferent to the market price for electricity. To ensure 

security of supply, it is essential to have a backup which can 





be called on at short notice. Without backup generation, 

were demand to exceed supply, prices for electricity would 

go through the roof and there would be blackouts. But 

having sufficient back up capacity to make up for the 

absence of renewables implies a surplus of capacity, which 

can also depress power prices. 

Generators which do not receive subsidies, make money 

based on two key variables – the price for which they sell 

their electricity, and how much electricity they generate. The 

latter is often called the load factor – i.e. how many hours out 

of the 8,760 hours in a year that the plant runs, expressed 

as a percentage. Gas CCGTs are a cost effective and flexible 

source of power – ideal for use as back up to renewable – but 

without a high enough load factor and a reasonable power 

price, it is hard to make the case for investment. By definition 

load factors for back up plant will be lower. To survive with a 

lower load factor, generators will need a higher power price 

when they do generate – but this is less likely if subsidised 

renewables depress the power price, and there is a large 

quantity of back up generation also competing to generate. 

The challenge is therefore how to create the right framework 

to enable companies to invest in back up generation. One 

way is to pay generators for making their capacity available 

(so called availability payments) and the form of such a 





mechanism is being considered in the UK at the moment. 

In other countries, for example Germany, the debate is 

ongoing. 

Gas has a key role to play. CCGTs are a proven technology, 

highly efficient and low in greenhouse gas emissions. 

They have the ability to generate flexibly to enable grid 

operators to match supply with demand. In the short term 

replacing coal with gas will immediately reduce greenhouse 

gas emissions. In the medium to long term gas will ensure 

the lights stay on as Europe transitions to a low carbon 

economy. There is also the prospect of Carbon Capture and 

Storage technology which will make CCGTs a zero carbon 

generation option. However if policy makers do not make 

the right decisions now, we risk that gas fired capacity will 

not be there when we need it. 

l Gazprom Marketing & Trading’s Regulatory Affairs team 

works, analyses and advises GM&T and its parent company 

on energy policy and regulatory issues, and works with 

policy makers when designing market rules. If you have 

any questions on the above article please contact either 

alex.barnes@gazprom-mt.com, Head of Regulatory Affairs, 

or vasileios.machias@gazprom-mt.com, Regulation 

Manager (Power). 





Gastech Conference and Exhibition 

8-11 October 2012 

Gazprom Marketing & Trading is proud to be exhibiting 

at this year’s Gastech, the world’s leading commercial and 

technical gas conference. 

Visit us on stand A72 at ExCeL, London. 

Operating on an 18-month cycle to ensure issues remain 

topical, the 26th edition of Gastech is the global meeting 

place for energy professionals working in the natural gas 

industry. 

Originally set up to bring together the technical decision 

makers involved in LNG and LPG shipping, Gastech now 

attracts the major technical and commercial players from 

around the world to meet, discuss and exchange ideas 

affecting the upstream, midstream, downstream and power 

generation sectors of the industry. 

We look forward to seeing you there. 





HIGH ENERGY TREASURY 

Three years ago GM&T weren’t able to generate a capital 

forecast beyond a week. Today it can integrate an acquisition 

within a week. Much of this is down to what Michal Kawski, 

GM&T’s Head of Treasury, calls a ‘smart and agile approach’. 

“Our achievement has been to provide sufficient flexibility for 

the business,” he says. “Adaptability is extremely important. Our 

net profit growth every year is huge and when adding new 

products and locations, you need a team to make it all scalable.” 

Michal explains that such flexibility comes from the technical 

abilities of treasury to identify the right systems and solutions. 

London-headquartered GM&T group is the global marketing 

and trading arm of the Gazprom group – one of the world’s 

largest energy companies. The global trader and multicommodity 

solutions provider has enjoyed extraordinary 

growth; revenues virtually doubled from £11.2bn in 2010 to 

£21.7bn for 2011. 

Its tremendous growth has presented many challenges, but 

treasury has overcome these by creating a centralised structure 

to provide stability to a highly volatile commodities business 

in multiple time zones. It has achieved best-in-class cash 



management, with clear visibility of cash. 

The solution encompasses bank relationships, technology 

choices, new payment processes (it introduced a follow the sun 

intraday limit ensuring that time-critical, high-value payments 

are executed without delays) and liquidity operations ensuring 

the company has access to funds globally without huge costs. 

Visibility of cash, in terms of cashflow funding requirements 

has gone from one week to five years. New models have 

been implemented that actually give a true insight into the 

economic value of each business unit. 

“The pace of change at GM&T means relentless pressure to 

improve and to adapt to new opportunities,” says Michal, who 

intends to take ownership of key projects with upcoming 

implementation of ebam, maximising its usage of SWIFT 

bureau services and evaluating an in-house banking partner. 

He also talks about the importance of innovation in treasury 

and team motivation. Keep your eye on the ball he advises: “We 

have a three to five-year strategy with systems development 

to ensure we are not missing out on things as they come to 

market.” 

This article appears in the September issue of EuroFinance 

magazine, part of The Economist Group. 



GM&T Global offices: London • Manchester • Moscow • Houston • Singapore • Paris • Berlin • Walluf • Zug • ‘S-Hertogenbosch 

VISUAL EFFECTS 

TAKING A STAND 

CHELSEA DEAL 

VIENNA CONFERENCE 





GM&T has strengthened its visual presence and reputation 

with current and future stakeholders following its recent brand 

refresh. 



CHELSEA DEAL 


The first in a series of changes to the visual identity came in 

2011 with a refresh of the www.gazprom-mt.com website. 

New-look quarterly newsletter Energise was also a key part of 

the move bring GM&T’s identity more in line with the Gazprom 

brand to truly reflect its values and unique offering. 

Gazprom’s rapid growth in reserves 

Liquid Hydrocarbon 

reserves increase by 

3.4 billion tons 

20 years 

Gas reserves 

increase by 

23.5 trillion m 3 

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11




Gazprom Energy’s Corporate, Clean Energy and Mid-Market 

sales teams made an impression on customers at the Energy 

Event at Birmingham’s NEC on 11 and 12 September. 

Energy management is a prime concern to UK businesses and 

with environmental targets getting tighter, GM&T’s advisors 

offered customers advice on their needs and on purchasing 

such a volatile commodity. 



CHELSEA DEAL 


The Energy Event always attracts many of the industry’s 

leading decision makers, manufacturers, suppliers and 

service providers. Guest speakers this year included European 

Commission Director General for Energy Philip Lowe, physicist 

and tv presenter Professor Brian Cox (below) and former 

Downing Street communications strategist Alastair Campbell. 

http://www.theenergyevent.com/ 




CHELSEA DEAL 

GM&T has signed a three-year deal to act as Chelsea Football Club’s 

Official Global Energy Partner. Building on Gazprom Energy’s partnership 

in which the retail arm of GM&T has supplied gas to Chelsea for the last 

five years, GM&T will exclusively supply gas and electricity to the club’s 

Stamford Bridge Stadium and training facility at Cobham in Surrey until 

2015. 



CHELSEA DEAL 


Gazprom’s brand will be visible to an international audience on LED 

boards at all of Chelsea’s home Premier League, FA Cup and League Cup 

games as well as through Chelsea’s various digital platforms. There will 

also be a number of hospitality benefits. 

OAO Gazprom has also concluded an agreement with UEFA to become 

an official partner of its Champions League and Super Cup tournaments 

for the next three seasons. 





This year’s Annual European Autumn Gas Conference (EAGC) is being 

held for the first time at the Intercontinental Wien in 



CHELSEA DEAL 


Vienna, Austria on 13-14 November. 

Now in its 27th year, the EAGC is a renowned high-level event for 

executives of the European gas industry and is attended by major gas 

companies, governments, associations and regulatory bodies. 

The EAGC will continue to confront Europe’s gas issues and challenges, 

with a prominent focus on developments within South & Central Europe, 

featuring regional projects and case studies. 

Alex Barnes, Gazprom Marketing & Trading’s Head of Regulatory Affairs, 

will be speaking as part of the trader’s panel on Wednesday 14 November. 

Read the conference programme http://www.theeagc.com/conferenceprogramme/ 

and the list of delegates http://www.theeagc.com/ 

registered-delegates/

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