C2572 02 Apr-May 06 AW - LP Gas Magazine

NEWS
CC Consults on Market Remedies
The Competition Commission (CC) is
consulting on measures to remedy the
adverse effect on competition it
provisionally found in the markets for
the supply of domestic bulk lpg in
Great Britain and Northern Ireland.
Peter Freeman, chairman of the
inquiry group, said: “We provisionally
found that competition was not
working as effectively as it should and
that consumers were losing out as a
result. We are now bringing this
investigation to a close.
“Customers face a number of
hurdles in switching supplier and this
has restricted competition between
suppliers, discouraged entry and
expansion, and led to higher prices.
We are now consulting on a package
of measures that should make
switching easier for customers by
removing the need to change tanks
when changing supplier, improving the
terms of customer contracts, and
giving customers more information.”
The CC considers that the facilitation
of tank transfer, standardisation of the
switching process, changing customer
contracts and better provision of
information would address those
features of the domestic bulk lpg
market it has provisionally found as
having an adverse effect on
competition.
An incoming supplier would have the
right to buy the existing tank, valves,
regulator and pipework from the
outgoing supplier, which would be
obliged to provide documentation on
the tank and respond to emergency
callouts for up to 14 days after transfer.
A methodology to determine a
backstop price for transferred tanks
would be established.
There would be no charges to the
customer on termination of their
contract, which would have to
include information on the switching
Calor Gets into Fuel Cells
Calor Gas Ltd has announced that
it has signed a memorandum of
understanding (MOU) with Voller
Energy Group plc, a leading
commercial developer and
manufacturer of portable fuel cell
systems, to work together to
develop the market for fuel cell
generators and battery chargers
with hydrogen derived from lpg.
The MOU is for an initial period of
two years, and will then continue
indefinitely unless terminated by
either party.
Paul Blacklock, marketing
manager at Calor, said: “Fuel cell
technology is rapidly developing
and will clearly be of benefit in
rural areas where mains gas is not
available, and where the quality of
electricity supplies is often poorer.
As we move towards a vision of a
distributed energy infrastructure,
lpg fuel cells will increasingly play
a vital role.”
Fuel cells offer an alternative to
conventional energy generation
from petrol or diesel. There has
been speculation that a ‘hydrogen
economy’ will emerge, replacing
the current ‘carbon economy’ as
carbon based fossil fuels, such as
coal, gas and oil, become scarce.
However, in spite of repeated
government initiatives, hydrogen is
still only available from specialist
suppliers and there are no
immediate plans to make
hydrogen broadly accessible to
consumers. By contrast, lpg is
widely available.
Fuel cells work by converting
the chemical energy in hydrogen
to electrical energy by
combining it with oxygen across
a special membrane. The
outputs from the reaction are
electricity, heat and water.
Voller Energy is initially targeting
commercially attractive areas,
including cordless power tools,
temporary buildings, leisure
Shell Retains Lpg Business
Shell has announced that, after a
review of its global lpg marketing
and distribution, it has decided to
retain its lpg businesses, including
that in the UK, in its downstream
portfolio. Shell had previously
announced that it was reviewing its
options following an unsolicited offer.
Some parts of Shell’s lpg business
have been sold, however, including
those in Portugal, Italy, Brazil,
Paraguay and parts of the
Caribbean.
Ron Blakely, executive vice
president finance Shell downstream,
said: “We made clear all along in this
process that our lpg business is
robust and meets our portfolio
criteria. Having fully tested the
market, we have concluded that
there is better value for Shell
shareholders in retaining these
profitable businesses.
“Lpg generates a competitive
process. Exclusivity periods would be
capped at two years, and notice
periods at 42 days. Notice periods
where a switch is ready to be
completed would be waived.
Suppliers’ invoices will have to
include the amount of lpg delivered in
litres and the price paid in pence per
litre so that customers can more easily
compare quotes over the phone or on
suppliers’ websites.
The CC intends to recommend to
the General Consumer Council for
Northern Ireland that it include
information on switching domestic bulk
lpg suppliers with that on the opening
to competition of domestic mains gas
and electricity liberalisation in 2007 that
will be sent to consumers.
The CC expects that its remedies
will include a transition period of no
more than six months, allowing
domestic bulk lpg suppliers to adapt
to the measures.
boating, recreational vehicles and
military markets. It has said it is on
target to achieve production of its
first commercial product by the
end of 2007.
Stephen Voller, CEO of Voller
Energy, said: “We are very excited
by the potential opportunities
offered by the relationship with
Calor Gas. They are an ideal partner
as we seek to develop portable fuel
cells charged by hydrocarbons.
With over 10,000 outlets in the UK
and a strong presence in our key
chosen markets, this agreement
offers both companies benefits
from the development of this
important environmentally friendly
technology.”
The initial scope of the joint
development will also include the
potential development of new style
canisters, possibly disposable, for
use in generators and battery
chargers, and health and safety
considerations.
return on capital employed, and will
continue to be run as part of our
downstream portfolio in our markets
of choice. It will be very much
business as usual going forward.”
John Tolchard, managing director
of Shell Gas (LPG) UK, said: "I
welcome this announcement and
feel we can now continue with our
strategy of growing our UK business
and giving the shareholder the best
return on investment."
Director General
Appointed
Rob
Shuttleworth,
formerly an
LPGA executive
committee
member for
ConocoPhillips, Rob Shuttleworth
has been
appointed as director general of
the LP Gas Association and will
take up the role on May 1 2006.
The position becomes available
after the retirement of the former
director general, Tom Fidell.
"I'm really pleased to be
appointed as the new DG of the
LP Gas Association,” said Rob
Shuttleworth. “Tom has done a
superb job over the last 13 years
and I'm honoured to be following
him. With energy in the news
virtually every day, it is an exciting
time to be taking over and I'm
looking forward to working with
the members of the industry to
define the shape and role of the
LPGA to meet these challenges."
Kevan Rock, LPGA chairman,
said: "In Rob Shuttleworth, we
have been lucky enough to
secure the services of a well
known and popular figure with
the experience and skills to take
the association forward and build
upon a very solid foundation."
New MD for
Flogas Ireland
Patrick Mercer
has retired as
chief executive of
Flogas Ireland. He
was the last
remaining
member of the
founding
executive team to
retire from the
Patrick Mercer
(left) and
Richard Martin.
company, which was incorporated in
1977. He played a significant role in
the development of Flogas, both in
Ireland and Britain, and contributed
greatly to the company's success,
says Flogas.
Richard Martin, formerly sales &
marketing director, was appointed as
managing director of Flogas Ireland
on April 1. Richard joined Flogas in
1979 and has held a number of
senior management roles, principally
in the sales & marketing division of
Flogas. As a key member of the
management team, he has
contributed significantly to the overall
development of Flogas' operations in
Ireland, said the company.
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LP GAS MAGAZINE APRIL/MAY 2006