Annual Report 2010 311 - Verbundnetz Gas AG

Foreword of the Executive Board
In 2010, the VNG Group (VNG) earned net income of € 69 million. Sales reached € 6.3 billion. The
natural gas sales volume in Germany and other countries once again rose. At 220 billion kWh, the
natural gas sendout of VNG AG was some 20 per cent higher than the previous year’s figure. This bears
witness to the confidence shown by customers in the performance of the company.
Nevertheless, the marked fall in net income compared with 2009 reflects the dramatic changes that
have taken place in market conditions and the entire framework for the gas industry. The world-wide
natural gas surplus, intensive competition for customers, highly liquid European wholesale trading
markets and lower demand compared with the years before the financial crisis resulted in considerable
pressure on margins. By expanding sales activities on domestic and export markets, using the possibilities
offered by European spot and futures markets and offering new gas products to customers,
VNG was only able to compensate for these developments in part.
With a diversified international procurement portfolio, VNG has reinforced its position as Germany’s
third-largest natural gas importer and makes a major contribution to the security of supplies in Germany
and other European countries. In the 2010 financial year, VNG purchased 214 billion kilowatt-hours
of gas from a variety of producers and suppliers.
Long-term natural gas purchase contracts remain the backbone of European gas supplies and the gas
purchasing activities of VNG. One of the main challenges in the 2010 financial year was to adapt these
contracts to current market conditions. These efforts will continue in 2011. However, we are confident
that we will find solutions based on partnership with all our suppliers.
In line with VNG’s strategy of placing gas purchasing on as broad a basis as possible, we are developing
our own sources on the Norwegian Continental Shelf, and, since 2010, also on the Danish Continental
Shelf. The two first wells drilled resulted in an oil find. In Norway, we hold participations in two
producing fields and are the operator of two further licences. This bears witness to the confidence of
Norwegian partners in the competence of VNG.
Liquefied natural gas (LNG) is a further option for the diversification of gas procurement. VNG has
concluded framework agreements with potential suppliers to take advantage of this option.
Our gas procurement mix also includes biomethane. This renewable energy available from domestic
sources has an optimum CO 2
balance and is highly versatile; it can be used for space heating, power
generation and in the mobility sector and can also be stored.
Not only with respect to security of supplies but also against the backdrop of changes in natural gas
markets, characterised by a growing number of market players and increasing need for flexibility,
underground storage facilities for natural gas are becoming more and more important. VNG is among
the pioneers in the development and utilisation of natural gas storage facilities. On the basis of its
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