GM&T Magazine Issue 3 - Gazprom Marketing & Trading

GM&T Magazine Issue 3 - Gazprom Marketing & Trading

ISSUE 3 THE MAGAZINE FOR GM&T CUSTOMERSUnitedfrontHow the ukcan secure itsgas supply

GM&T ISSUE 3WELCOMEINSIDE– 4/5 –PipelineThe latest news from GM&Tand beyond“How do you continue topower your business whilecomplying with laws oncarbon emissions?”Welcome to the new-look GM&T magazine. We’ve relaunchedthe magazine to bring you more features, more opinion anda greater insight into how we work with our customers andcounterparties to meet your energy needs.In many ways, whether it’s gas to cook meals in a restaurant orelectricity to light a factory floor, the needs of energy consumersare the same as they were a century ago, but the way we sourceand consume energy is constantly evolving.Take the UK. The nation can no longer rely on the North Seafor its gas, so it’s broadening its horizons to secure supply for theyears ahead, strengthening links with gas markets in ContinentalEurope and shipping LNG from countries around the world(page 10).And then there’s the ever-changing environmental landscape.How do you continue to power your business while complyingwith laws on carbon emissions – especially when these laws aresubject to change?There’s no single solution, but as this issue demonstrates,carbon transactions (page 6), smart metering (page 9) and cleantechnology (page 18) can all help us consume energy in anenvironmentally friendly way.Whatever your energy interests and needs, I hope youenjoy reading our new-look magazine. We would love to hearyour views, feedback or suggestions so please email us HemmerlingManaging Editor, GM&T magazine– 6/7/8 –Glass actHow Ardagh Glass has embracedcarbon trading– 10/11/12 –The flow must go onWhat the UK can do to secure gassupply in the years ahead– 13 –ProfileBroker Paul Hill talks aboutthe challenges of his job– 14/15 –Automatic for the peopleTen benefits of AutomatedMeter Reading– 16/17 –Flexible friendWhy structured products area great way to purchase energy– 19 –Web wondersFive energy-related sitesworth browsingPERSPECTIVESExpert opinion fromGM&T on the latest energy issues-9-A look at the likely impact of newlegislation on smart metering-18-We examine how cleantechnology is taking off2 GM&T—ISSUE 3

JON FEINGOLD, MANAGING DIRECTOR, GM&T RETAILFIRST WORDGM&T Retail is in a unique positionwithin the Gazprom Group. As theGroup’s global front-facing division,selling to end users in the liberalisedSME, commercial and industrialmarkets, GM&T Retail is the onlycompany selling in the sole name ofGazprom to end users. This givesus a great opportunity to create anddevelop the Gazprom brand – and it’san opportunity we’ve seized.Our customers include some of theUK’s largest hospitals, universities,cinemas and football clubs. If youwatch a movie in an Odeon cinemaor watch Manchester United play atOld Trafford, you’ll be entertainedby a business that’s powered byGM&T Retail. And we’ve extendedour offering beyond Britain, with ourdedicated team of 80 people servingnot only our UK customers but endusers in Ireland and France as well.We keep expanding the range ofproducts and services we offer to ourclients, too. We sell a suite of productsincluding gas, power and carbon andalso offer smart meters and energymanagement services to all end users.Our offering has seen us enjoysteady growth since we wereestablished in 2006 and we intendto continue that growth. We plan toexpand into Europe, concentrating onBenelux – an ambition well supportedby both the strong Gazprom brandand opportunities offered by Europe’sderegulated markets.We also intend to further developour energy services to becomeour customers’ partner in energymanagement. We’ve recentlyinstalled the first smart meters inFrance, marking the beginning of ourAMR presence in Europe. Moreover,we’re discussing the possibility ofdeveloping our products and serviceswith companies in Russia, Europe andAsia, paving the way for us to enterthe global arena.Last but not least, GM&T Retailis the final link in a full gas chainfor the Gazprom Group, stretchingfrom production fields in Russia toend users in Europe. So, we’re wellpositioned to achieve our goal ofcreating a brand that global end userswill see as their supplier of choice.“We intend to furtherdevelop our energyservices to become ourcustomers’ partner inenergy management”

INDUSTRY NEWS FROM GM&TPipelinePower playerSteve Armitage has joined GM&T asour new Head of Retail Power. Steve will talkabout the challenges facing the power sectorin the next issue. For more information onPower go to thefutureWhat’s going to happen to thecarbon market after 2012? That wasthe question on everyone’s lips atCarbon Expo 2010, which took place inCologne in Germany during May.“There was a lot of talk about thefuture of CDM (Clean DevelopmentMechanism) and JI (JointImplementation) post-2012 andwhether they will continue,” said JuliaElmgren, Project Manager, Carbon forGM&T. “Everyone agreed that CDMwill continue but didn’t know forwhich countries. For instance, willthe US accept CDM projects?”GM&T’s Regional Manager andCarbon Originator, Tatiana Fayzullina,gave a presentation on CDM and JIat the Expo. GM&T also exhibited atthe event, attended by 3,000 peoplefrom 110 countries. Julia said: “Itgave us a great opportunity to chat tocounterparties about market trends.”NaturalprogressionIt has been a momentous year forGazprom Global LNG (GGLNG).The business was accepted as anAssociate Member of SIGTTO (Societyof International Gas Tanker andTerminal Operators), which promotesbest practice in gas tankers andterminals worldwide.GGLNG also signed a worldwidemulti-service agreement with GulfAgency Company (GAC). The deal willsee GGLNG benefit from GAC’s suite ofservices for the oil and gas industry.GGLNG Shipping, meanwhile, hasreceived approval from Lloyd’sRegister Quality Assurance that itsQuality Management System complieswith the ISO 9001:2008 requirement.And earlier this year, GGLNGachieved a major milestone when theLNG carrier Grand Aniva made the100th LNG cargo delivery from theSakhalin-2 Project in Russia.It’s a dateDon’t miss the European Gas Conference2011. The event, in its fourth year, willtake place in Vienna on 25-27 January.To find out more go said itWhat people have been sayingabout energy recently“The carbon market knows climatesolutions are impossible withoutprivate finance”Henry Derwent, President andCEO, International EmissionsTrading Association“Economic growth will be weak andwe do not expect a return to prerecessionGDP levels until 2012”Richard Lambert, Director-General, Confederation of BritishIndustry (CBI)“It is time for us to move to aclean-energy future”Barack Obama, US President“Reserves in the Danish sectorof the North Sea are steadilydecreasing, so within a few years wewill have to supplement our ownproduction with imported gas”Kurt Bligaard Pedersen,Executive Vice President,DONG Energy4 GM&T—ISSUE 3

TruRead (now Gazprom Global EnergySolutions) grew its Automated MeterReading (AMR) installations from 100to 1,000 a month between March 2008and May 2010.The global carbon market grew to£94 billion in 2009 despite financialand economic turmoil, according tothe World Bank.The Confederation of British Industry(CBI) has forecast the UK economy willhave expanded by 1.3 per cent in 2010.GAZOMETEREasternpromiseGM&T has increased its presence inthe Asia Pacific region with the launchof its Singapore subsidiary.The aim is to extend GM&T’s existingoffering in this region, which is one ofthe major global hubs in commoditiestrading. Initially, the business willfocus on global LNG shipping andtrading, portfolio development andcarbon-credit origination projects.Arthur Tait, Managing Director ofGM&T Singapore, said: “Our existingexpertise in LNG and carbon tradinghas given us a strong foundation withwhich to build our operations inAsia Pacific.”GM&T has already completed anumber of spot-trading deals forLNG delivery into Japan, Korea,China and Taiwan.The ups and downs of theenergy sectorThe UK’s natural gas production wasnine per cent lower in the first quarterof 2010 compared to the previousyear, according to the Department ofEnergy and Climate Change.Two new gas power plants due tobe built by E.ON and Scottish andSouthern Energy in Britain have beenput on hold – because industrial powerdemand has not returnedafter the recession.Formula One has unveiled plans toreduce carbon emissions by 15 percent across the motorsport over thenext three years.GM&T—ISSUE 3 5

CUSTOMER PROFILE ARDAGH GLASSYou may not have heard of ArdaghGlass, but chances are you have drunkout of one of its bottles. The companyis one of Europe’s largest glasspackaging manufacturers, producingmore than 13 billion glass containers ayear for world-famous food and drinkbrands such as Nestle, Heineken andCoca-Cola.The company operates 20 glassproduction sites with 40 furnacesin eight countries across Europeincluding England and Scotland, andemploys more than 6,500 staff. Likemost organisations, Ardagh is underpressure to reduce its environmentimpact but this is not an easy task. Inorder to satisfy huge demand fromits customers, it has to operate itsplants round the clock, so continuousenergy supply is essential to businesscontinuity.“Our production process is energyintensive by definition so it’s achallenge to balance commercialnecessity with our importantobligation of reducing our footprint,”says Steffen Seehausen, Physical RiskManager for Ardagh, who’s basedin Germany. “Required meltingtemperatures for our furnacesrequire high-energy density of fuel,therefore potential for full substitutionto regenerative fuels is limited.However, we are investigating thefeasibility of regenerative fuels andmore eco-friendly solutions as part ofour ongoing programme to examineways of reducing our impact.”Energy exchangeThe programme has already seenArdagh reduce its environmentalimpact through carbon-reductionprojects. A recent success was theconstruction of an ‘energy exchange’at the company’s Limmared sitein Sweden. The site’s FactoryMaintenance Manager, KennethJohansson, says: “It harnesses wasteheat from our furnaces to providehot water for a local communityand can supply up to 100 per centof their heating requirements at asubstantially reduced cost. This hugeproject involved the laying of nearly50km of piping and now supplies over5,000 people.”The energy exchange was madepossible thanks to help from GM&T.Carbon transactionFollowing the success of the GM&TRetail’s retail gas team in securing agas supply contract to a number ofArdagh’s UK sites, Simon Watson,Retail Carbon Negotiator, helda meeting back in July 2009 withmembers of the senior managementteam at Ardagh to discuss andhighlight the opportunities availablefrom the European Union EmissionGlassactThanks to carbon trading, Ardagh Glass has reduced itsenvironmental impact while increasing revenues“It’s a challenge to balancecommercial necessity withour important obligation ofreducing our footprint”Steffen Seehausen, PhysicalRisk Manager, Ardagh Glass6 GM&T—ISSUE 3

Numbers game 1932 The year Ardagh Glass started life as the Irish Glass Bottle Company13 billion Glass containers produced each year20 Glass-production facilities in eight countries6,500Employees across Europe£1.1 billion The company’s annual revenue18% Ardagh Glass’s share of the European glass container marketGM&T—ISSUE 3 7

Trading System (EU ETS) carbonallocation. This was followed up witha meeting at Ardagh’s Dublin HQ laterin the year, in which we identifiedthe potential for Ardagh to extractvalue from carbon transactions whichwould allow them to further investin energy-saving projects. Followingthe success of these meetings, Ardaghand GM&T Retail agreed a contract, aswell as agreeing to explore the mostefficient method to transact carboncredits to the benefit of all parties.Due to the complexity and risksassociated with the potentialtransactions, GM&T Retail invitedGM&T to become involved and thisinternal teamwork proved successful.“We created a unique, structuredforward transaction for carbon whichoffered Ardagh maximum value andminimum risk,” says Simon.We have concluded a number ofsignificant transactions with Ardaghwhich have brought additionalbenefits, and which we are nowbuilding on as we continue tostrengthen our partnership.We will continue working togetherto help Ardagh become carbonneutral, creating a competitiveadvantage for them in the highlycompetitive glass market. This is apositive relationship for both parties.Although Ardagh has beenimplementing energy efficiencyprogrammes for more than 60 years,carbon trading was new territory forthe manufacturer. Karen Butler,GroupFinancial Controller for Ardagh, says:“It was a relatively new concept forour business, but we realised thatcarbon trading would be essential forus going forward. Our initial deal,with the help of GM&T, simplified thewhole process.” What’s more, thedeal not only made the exchangepossible but generated around £6.5million in revenue for Ardagh.A flexible approach helped makethe transaction a reality, with GM&Tallowing the deal to take place overa number of individual transactions.Close communication between bothparties was also key, with GM&T’sGlobal Carbon team regularlyupdating Ardagh on progress andvisiting the customer’s Dublin HQ todiscuss the deal face to face.It’s clear the partnership is alreadyhelping Ardagh to shrink its carbonfootprint without compromisingmanufacturing output – somethingwell worth raising a glass to.GM&T offers a wide range of carbonproducts. For more information callMaciek Stefanski, Regional Manager,Global Carbon on 020 8614 1312or Simon Watson on 01423 546723,email or go“We realisedthat carbontrading wouldbe essentialfor us goingforward”After KyotoUncertainty in the carbonmarket means companies likeArdagh Glass need help topurchase the right productsWhereas the glass-packaging sectoris a relatively sturdy market in whichhuge swings in demand are rare, thecarbon market is less settled. Themarket is currently stagnating, dueto uncertainty about what’s going tohappen post-2012. What comes afterKyoto? Will there be new climatechangelegislation and what impactwill it have? For companies likeArdagh Glass, this uncertainty makespurchasing carbon products a trickybusiness and means that GM&T hasto provide innovative products anddeals to their customers.“In some ways carbon complianceis straightforward as it’s a single,quoted market across the whole ofEurope and its price is transparent,which means that all of Ardagh’sinstallations are in a similar position,”says GM&T’s Maciek Stefanski. “Theuncertainty within the carbon worldabout what will happen post-2012,however, is the biggest challenge,so it’s important that GM&T providesour customers with the right carbonstrategy and products, helping themto respond to any developments.”As part of this, GM&T Global Carbonis closely monitoring the progress ofthe Copenhagen Accord as it evolvesinto a legally binding treaty.GM&T is involved in originatingand developing emission reductionprojects across multiple sectors,guiding customers and counterpartiesthrough various schemes.8 GM&T—ISSUE 3

Page GM&T header RETAILPerspectivesAlan Jones looks at howthe UK Government’snew legislation on smartmetering will affect energyconsumersSmart moveThe UK stands on the brink of oneof the biggest changes to affect theenergy market since British Gasconverted all the nation’s homesto natural gas in the 1970s. It is achange that will affect every energyconsumer. The plan is for all UKhomes to have smart meters by 2020– and with the new Government thisdate could end up being earlier.Smart meters are intended to helpthe Government meet its greenhousegas reduction targets of at least34 per cent by 2020 by providing keyprice signals, while at the same timeenabling consumers to sell locallygenerated energy back to the grid.A key part of the justification forsmart metering is the link to smartgrid technology and demand-sidemanagement.These benefits will becomeparticularly strong if the trend inenergy prices increase fourfold overthe next 10 years, as some analystsnow predict. Unlike electricity, gascannot be generated from wind andsolar by the consumer but it can bestored. As a consequence, many ofthe benefits declared for domesticelectricity smart meters and smartgrid technology do not apply to gas.Much of the debate has focusedon the domestic benefits of ‘Smart’technology. When looking at gas– in particular in relation to largerconsumers – the issues and benefitsare very different.Ahead of the mass domestic rollout,large consumers are alreadyusing Smart technology (moregenerally called AMR or automatedmeter reading). When linked to theinternet, such technology providesa powerful solution to accessingaccurate data on daily flow and loadprofile consumption.This high-resolution data enablesa business to better understandconsumption and manage energycosts. And better data is crucialin a volatile and dynamic energymarket. At the same time, businessesare subject to increasing legislativerequirements and environmentalpressures.Carbon reductionOne such piece of legislation is theCRC Energy Efficiency Scheme(formerly known as the CarbonReduction Commitment), a newGovernment-backed carbonemissions trading scheme whichcame into effect on 1 April.The CRC is a mandatory climatechange and energy-saving schemein the UK. Organisations that use acertain amount of electricity will beobliged to participate in the schemeand monitor their emissions. Theywill have to buy allowances fromthe Government for each tonne ofCO2 they emit, which will create asignificant incentive for organisationsto reduce their emissions and in turnsave money by not wasting energy.At the moment only largerbusinesses are affected by the CRC.However, as energy becomes moreexpensive and the drive to reduceemissions intensifies, the net willspread wider with more smallerbusinesses affected. Only with AMRcan a business be in control of the truefacts about its energy consumption.Therefore acting sooner will providevaluable experience and informationfor when all businesses are affected bythe legislation.Alan Jones is Technical Director of Gazprom Global Energy Solutions (GGES), a specialist in smart meteringtechnology. To find out more about AMR contact GGES on 0845 260 1122, email ggesinfo@gazprom-mt.comPortrait by Lyndon Hayes GM&T—ISSUE 3 9

energy security10 GM&T—AUTUMN 2010

When extremely cold weatherthreatened to disrupt gas supply tothe UK earlier this year, it provokedhysteria in some parts of the Britishmedia. While reports predicting thatsupplies might run out were wideof the mark, the panic highlighteduncertainty over the future of UKgas supply.“The UK needs to recognise it’s nolonger an island when it comes toenergy supply,” says Alex Barnes,GM&T’s Head of Regulatory Affairs.“Not so long ago it was self-sufficientin gas from the North Sea, but as UKContinental Shelf (UKCS) reservesdecline that’s no longer the case. TheUK is increasingly dependent ongas imports.”The key to securing supply isdiversification. “It’s about makingsure you don’t put all your eggs in onebasket. The UK is still able to accessgas from number of sources.”These sources include gas fromNorway and continental Europe(and ultimately Russia) via pipelines.Another growing source is LNG.“Prior to 2005 the UK had no way ofimporting LNG,” says Alex. “Now itcan access LNG via ships from all overthe world.”Greater exposure to wider markets,however, complicates matters. Alexexplains: “Now gas markets areinterconnected through pipelinesand LNG, the UK can no longer relyon future supplies coming its way.Also, the price it pays for gas willincreasingly depend on what’shappening globally.“Just as global oil prices wereaffected by the explosion of demandin China, LNG and gas prices in the UKare impacted by what is happeningelsewhere in the world. LNG will flowto the most attractive market.”The best ways to guaranteeaffordable gas supply is to ensuremarkets work efficiently. “After all,the definition of a market is wheresupply and demand match.”There are signs that a European gasmarket is becoming a reality – whichis good news for the UK, reckons Alex.“Creating an EU-wide market, wheregas can move freely between countriesto wherever it’s needed most, willspread risk across EU countries.”Effective regulationGovernments have a big part toplay in creating effective markets.In Europe, the EU is implementingthe Third Energy Package aimed atmaking markets work better, andis developing security of supplylegislation. Meanwhile the UKgovernment has announced plansfor an energy bill which will reformmarkets to ensure security ofsupply and fair competition. Alexwelcomes the news with cautiousoptimism: “The UK’s new CoalitionGovernment has stated it willinstruct Ofgem to establish a securityguarantee for energy suppliers, butthe devil is in the detail.The flowmust go onWith its own gasreserves in decline,the UK can guaranteesupply by embracingglobal marketsIllustration by Noma Bar GM&T—ISSUE 3 11

“Policy makers must recognisethe need to create a frameworkwhich allows long-term investments,long-term gas supply contracts andthe ability to book and use pipelinecapacity.“Long-term contracts can guaranteethe stable cashflow needed to developcapital-intensive upstream projects.People investing in these projectsdon’t want to see the rules changinghalfway through. Effective liquidmarkets also help give suppliers theconfidence to invest. Regulatorycomplexity and uncertainty are theenemies of investment.”Russian importsOne thing that’s proving stable is theflow of gas from Russia to WesternEurope. Today, Russian gas accountsfor around 40 per cent of suppliesimported to Europe. Gazprom, whichowns the world’s richest gas reserves,has exported gas to Europe for over 40years and Alex emphasises: “Western“Regulatorycomplexity anduncertainty arethe enemies ofinvestment”Europe’s gas market wouldn’t existwithout Gazprom.“As Gazprom’s marketing andtrading arm, GM&T is well placed tosupply Europe’s liberalizing markets.And because we’re trading on themarket we can access gas from avariety of sources.”To help guarantee supply, Gazpromis investing in two major new pipelineprojects. One is the Nord Streampipeline, which will have a capacityof 55bcm a year and will run underthe Baltic Sea, linking Russia’s andNorthern Europe’s gas transmissionnetworks. The other is the SouthStream pipeline, which will havea capacity of 63bcm a year. SouthStream, expected to be completed in2015, is being designed primarily tomeet demand from South East andCentral Europe.Gazprom is also investing in extraLNG capacity as part of the Shtokmandevelopment in the Arctic and alreadyexports LNG as part of the Sakhalin IIproject in the Far East.As well as pipelines, Gazprom isinvesting in underground gas storagefacilities; European storage projectsinclude the Bergermeer Gas Storageproject in the Netherlands, which willcreate Europe’s largest gas-storagefacility. The UK will also benefit fromsuch investments via its pipelineconnections to the continentalEuropean market.So with some help from the market,governments and GM&T, the UK canlook forward to its supply futurewith confidence.A regular guyAlex Barnes (pictured) is Head ofGM&T’s Regulatory Affairs department,which ensures the company understandsand meets its regulatory obligations.The department also helps GM&Tmanage risks derived from regulationand contributes to external regulatoryprocesses in support of markets. If youhave any queries about regulations andhow they might affect your business,contact your customer account manager.Let’s talk about specsIn its efforts to secure gas supply, theUK faces a unique problem – its gasspecification is narrower than the restof Europe’s. Alex explains: “EachEuropean country has its ownspecification and gas that can flowalmost anywhere in Europe cannotnecessarily enter the UK. In Januaryduring the cold weather, when flowsvia the Bacton-ZeebruggeInterconnector were helping meetUK gas demand, the Interconnectorwas almost shut down because of gasquality issue differences.“As the European market is muchlarger than the UK market, gassuppliers can choose to supplyEuropean markets rather than the UKif gas cannot enter Britain. This willcontinue until the price differencebetween the markets is sufficientto justify investment in facilities totreat the gas, so it can meet UKspecifications. In the meantime thereis the risk of price spikes if gas cannotenter the UK because of gas qualitydifferences.”You might ask, why can’t the UKsimply change its gas spec? “Thereason is that gas quality impacts onappliances used in the UK so if thegas is too rich or too lean, it can provedangerous. The Government hasclearly stated that it does not intendto change gas specs for theforeseeable future.”Gas quality is a big priority forGM&T. Alex says: “We’re working withOfgem and the Department of Energy& Climate Change to help solve theproblem. The best solution would be forNational Grid to be given responsibilityfor providing treatment facilities aspart of its Regulated Asset Base.”12 GM&T—ISSUE 3

PAUL HILL,PoweR EfficiencyPage headerPROFILEPaul Hill is a broker at Power Efficiency, a consultancy whichoffers procurement strategies and carbon-management servicesto blue-chip organisations in the corporate commercial sectorWorking as a broker is fast-paced asthe business is different every day.We’ve moved most of our clients overto buying in the wholesale market, sowe have the excitement of operatingin a fast-moving and volatile market.More and more clients will use thirdparties as market complexity andvolatility increases.Satisfaction comes from doingthe right deals for our clients. Manyclients want an energy contract thatsatisfies their particular needs. It’schallenging, as these requirementscan differ greatly between, say, aninvestment bank and a propertymanagingagent.Experience makes a broker agood broker. You need to buildrelationships with your supplier,understand the risks they face andenable them to quote for the business.You’ve also got to know the marketand be confident enough to tell clientswhen to place their business. I’ve gota grey hair for each of the last bull andbear markets and a grey streak forthe credit crunch!I’d like to think there will be moreautomation across the market infuture – at present, 99 per cent of ourcommunication with suppliers is byphone or email. We even know onesupplier that has to manually typein details before they can registerany site.And there aren’t enough suppliers,so we are very pleased whenever asubstantial company decides to enterthe UK market or offer both electricityand gas. GM&T is always keen tounderstand our clients’ specific needsand has the required experience,expertise and innovative spark tocome up with suitable solutions.Photography by Roger Harris GM&T—ISSUE 3 13

Ten ways AutomatedMeter Reading (AMR)can help you save energyand moneyMore accuratebillingCustomers will know what they oweand be able to budget better. They needto understand their energy consumptionin order to make intelligent decisionsabout it but that’s not possible whenthe bill arrives months after the event.And when the bills are estimated,it’s no surprise customers don’t feelempowered to manage their energy use.AMR offers timely, accurate and detailedinformation to help customers takecontrol of their energy use.No hidden costsChanging supplier or moving premises?No problem. With AMR, on-demandreadings mean you only pay for theenergy you have used. No debit or credit– just one accurate bill.PinpointwasteConsumption alertsprovided by AMRwarn you when yourenergy use is set topeak, allowing youto monitor yourusage and alteryour consumptionaccordingly.Analyse thisAMR provides access to half-hourly, hourly,daily, weekly or monthly data, allowingcustomers to analyse and understand their gasusage throughout any period. In addition, thesystem can be configured to readmultiple meters at the same point intime, allowing cross-consumptionanalysis over several sites.

Benefits forsuppliersAMR allows suppliers to get closer to their customers,giving suppliers a better understanding of theircustomers so they can service their needs. This willlead to a reduction in the cost of serving customers,while suppliers will have fewer bill queries,complaints and site visits.ReduceemissionsMeter-reading costs willcome down dramaticallyas meters are read remotely.And that, in turn, will leadto lower carbonemissions as fewermeter readers willbe on the road.FlexiblesolutionsGazprom Global Energy Solutionsknows that all customers are different.That’s why we offer flexible solutionsthat improve energy efficiency andhelp reduce energy costs. When yousign up to AMR, our innovative tariffsare tailored to meet the needs of specificcustomers’ needs.Lean and greenAMR can help customers meet environmental targets andmanage green programmes. Whether it’s the CRC EnergyEfficiency Scheme or Climate Change Levy,the energy data you gain fromAMR will help you manage yourenergy requirements.Facingthe futureAMR can help youfuture-proof in theface of upcominglegislation such as theEuropean Union’sEnergy Performanceof Buildings Directive.Net gainRemove the risk of running a debit or creditwith suppliers. By installing AMR, customershave secure access to historical data andinvoices. Copy or urgent invoices can beaccessed whenever needed, just by loggingon to the web page.GM&T Retail offers an AMR service. For more information call 0845 230 0011,email or go to

ENERGY PURCHASINGStructured products can help you manage risk while ensuring you get the energy packThe ever-changing price of gasmeans consultants and customers arealways on the lookout for differentpurchasing options. And thanks to theevolution of European gas marketsover last 10 years, which has seen theemergence of regional markets andthe deregulation of national markets,energy consumers have more choicesthan ever before. But with this greaterchoice comes greater risk. With thisin mind, GM&T Retail’s StructuredProducts team has developed anumber of flexible products designedto help consultants and customersminimise costs and manage risk whenit comes to energy consumption.Structured products, which includeanything that’s not a fixed price,represent GM&T Retail’s core business,which is selling flexible gas productsto some of the UK and Ireland’s largestcustomers.We offer a wide range of structuredproducts, from our zero-balancingrisk product which can providebudget security through to a fullbalancingrisk product for customersthat can actively manage theirdemand. All our products allowa variety of purchasing optionsincluding sell-back, with theminimum transaction volume beingone of the lowest in the industry. Andby adopting a bespoke approach,GM&T Retail has brought flexibleproducts to smaller customers byimplementing basket products withsome of the UK’s top consultancyfirms.Our customers range from smalltakeaways to large corporations.Our supply of gas ranges from600,000 therms to 50 million therms,depending on the size of the customerand their needs.Structured products can includeenergy products besides gas, andGM&T Retail develops productsaround customer requirements.A classic example is carbon creditswhich GM&T, with its ownCarbon business, is in an idealposition to provide.Our carbon negotiators work withmembers of the European UnionEmission Trading System (EU ETS) tobuy, sell and swap European UnionAllowances (EUAs) and CertifiedEmission Reductions (CERs). So if acustomer is looking to purchase gasand offset their energy consumptionby purchasing carbon credits, GM&Tcan act as a one-stop-shop. Demandfor such a service is certainly growing– with UK and global energy-efficiencyschemes requiring businesses toflex appeal: what All of GazpromRetail’s flexible products includel Automated Meter Reading (AMR)for all sitesl Direct access to in-house tradersl Online billingl Carbon management optionsl Free daily market report16 GM&T—ISSUE 3

Page headerage you need, while fixed-priced contracts can protect you from future price increasesreduce carbon emissions, customerdemand for combined gas-andcarbonproducts is on the rise.Whatever the request, ourcommercial understanding,combined with our in-depthknowledge of the gas industry,helps us ensure we can deliverthe right structured products forour customers.GM&T Retail’s service doesn’t endwith supplying products either.We’re committed to providingexcellent, ongoing accountmanagement and customer serviceand we’re looking to expand ouronline services for energy monitoringin the months ahead. In short, GM&Tis determined to become the supplierof choice for customers on a flexibleprocurement contract.To learn more about flexible productscall our Structured Products team on0161 838 9532 or email the team atsalesretail2@gazprom-mt.comThe price is rightFixed-price contracts offerenergy consumers securityagainst price risesA political event, an economicdownturn, a new piece of legislation –however much analysts try to predictwhat’s going to happen to gas prices,you never know if something’s goingto happen that will make even themost considered market forecast looksilly. So how do you guard againstpotential changes in gas prices?For customers, one way is to buyenergy supplies through a fixed-pricecontract. This is when a customeragrees to buy at a fixed price for aset period, providing them with priceprotection for that period. GM&T Retailis currently offering fixed prices ongas to as far out as 30 April 2013. Onpower, we’re offering a fixed price to30 September 2012.We provide fixed-price contractsthrough more than 150 third-partybrokers and consultants that we dealwith. This is done by our UK and IrelandFixed Contract sales team, madeup of contract negotiators and datacollectors, which offer fixed-pricecontracts not only on gas but on ourother energy products, too. The teamhas built strong relationships withenergy brokers and consultants andis committed to providing an effectiveafter-sales process.GM&T Retail could soon beproviding fixed-price contracts directto customers – the Fixed Contractsales team’s main target for thecoming months is to expand servicesinto the direct arena for both gas andpower, so watch this space!To learn more about fixed-price contractscall GM&T Retail on 0845 230 0011 oremail enquiries@gazprom-mt.comGM&T—ISSUE 3 17

GM&T CARBONPerspectivesAs organisations worldwideattempt to reduce emissions,clean technology is taking offand becoming big business,explains Simon CrookClean livingAt the European Cleantech Forumin Paris earlier this year I wasparticularly struck by one thing:revenues. The clean-technologybusinesses represented at theconference, which tends to focuson earlier stage businesses, are nownot only generating revenues butgenerating them in millions and eventens of millions of pounds.Now if on reading this you arethinking, “How can the existence ofrevenues be a highlight at a businessconference?” then you probablywork in an established business.I’ve not even mentioned profits, butlet’s not get ahead of ourselves. Yourestablished business is exactly whatthe clean sector (also known as thegreen or low-carbon sector) needs.One of the reasons I joined GM&T isbecause I believe that corporates havea key role to play in the scale-up of thelow-carbon sector.Reducing emissionsUnfortunately, however, this bringsme to a concern that came to meon returning from the conference.Without becoming too academic, thepoint of businesses operating withinthe low-carbon sector is to help societyreduce its greenhouse gas emissionsand therefore avert dangerous climatechange. Emissions are only reducedif products, projects and services arebought and used. Revenues of onlyUS$10 million, or even US$100million,are simply not enough to make asignificant dent in global emissions.Of course more establishedlow-carbon businesses, such aswind-turbine companies and solarcellmanufacturers, are alreadymaking revenues in billions of dollars.However, to achieve the emissionscuts necessary, we also need moreinnovative businesses – developing,for example, biomass digesters,building technologies and smart gridtechnologies – to make significantsales too.So what can we do? The answer is:plenty. Firstly, established businessescan act as early-adopter buyersfor new, low-carbon technologies.Secondly, we can use our marketaccess and brands to encouragecustomers to adopt new, low-carbonsolutions. And third, we can positivelyinfluence government and industrybodies to create a more benign marketplace for the adoption of low-carbonproducts and services.Scaling upSo what are we doing about scalingup clean technologies? I’m writingthis article while flying to southeastAsia to look at a number of low-carbonClean Development Mechanism(CDM) projects. For companies withinternational operations and assetsthis mechanism offers a means ofsubsidising the implementation ofcarbon-reducing technologies.Another example is our acquisitionof TruRead, a relatively small businessthat has come up with a great smartmeter for measuring and managinggas consumption in commercialfacilities. Energy managementservices, enabled by innovativetechnologies like TruRead’s, is anarea where much work is neededbut where large corporates have theresources and, most importantly,the trust of customers to implementinnovative services.So get yourself along to a cleantechnologyevent and find out howthese technologies can be applied toyour business and help turn thoserevenues from millions to billions.Simon Crook is Head of Carbon Technology at GM&T. To find out more about clean technology contact Simon on020 8614 3129 or email emissions@gazprom-mt.com18 GM&T—ISSUE 3 Portrait by Lyndon Hayes

Page TOP header FIVEWeb wondersFrom energy reports to the latest gadgets,these websites are well worth a browseA good readwww.GAZPROM-MT.COM/GGESAs one of the few major providers ofa completely managed AutomatedMeter Reading service using its owntechnology, and now the secondlargest provider in the UK, GazpromGlobal Energy Solutions (GGES) is acompany well worth knowing about.Its site provides information on allproducts and services it offers, fromadvanced metering solutions to energymanagement and web services.There’s also a company brochureto download and a web portal thatexisting customers can log ontoand use. The site also highlightsupcoming events at which GGESwill be exhibiting. And you can readblogs by the company’s TechnicalDirector, Alan Jones (see page 9).Bundle it comes to keeping abreast ofall things energy, the Financial Timeshas long been a favourite of peoplein the energy industry. Now you canread all about it on the FT’s website,which contains an Energy Sourcesection packed full of news andopinion pieces on the sector.FT Energy Source contains specialreports and blogs on everything fromclimate change and energy efficiencyto how UK energy policy is likely totake shape under the country’s newcoalition government. There’s alsoplenty to watch and listen to aboutenergy trends, thanks to the section’svideos and podcasts.Pacific to learn more about energyefficiency in Asia Pacific or gasdemand in China? If so, then thewebsite of the Asia Pacific EnergyResearch Centre (APERC) is wellworth a browse. The Centre, anaffiliate of the Institute of EnergyEconomics in Japan, covers all 21nations of the Asia Pacific EconomicCooperation (APEC).The website contains PDF versions ofa wide range of downloadable energypublications including the APECEnergy Overview 2009 and a varietyof APERC research reports. The sitealso contains information on APERC’slatest research activities and upcomingconferences and workshops.Get you’re an energy broker, consultantor customer then you need to knowabout the CRC Energy EfficiencyScheme. Formerly known as theCarbon Reduction Commitment,the mandatory scheme is intendedto improve energy efficiency and cutcarbon emissions across the UK. Thescheme, which started in April thisyear, requires organisations in theindustrial and commercial sectors toinstall smart meters by 2010.This government website tells youeverything you need to know aboutthe scheme. It features a compliancetimeline, advice on how to complyand a downloadable user guide, alongwith details on who to contact to findout more about the scheme.Tech of a sitewww.digitaltrends.comReading emails on a BlackBerry,writing a report on a netbook,checking energy prices on an iPhone– many of us wonder how we usedto function at work without moderntechnology! If you’re someone whoneeds to know what the next big (ormore likely small) gadget will be, thenthe Digital Trends site is for you.The site prides itself on beingthe first to find out about the latestgadgets – it recently published leakedscreenshots of the new BlackBerryoperating system – and containsproduct reviews, buying guides andvideos to help you choose which pieceof kit to purchase.GM&T—ISSUE 3 19

Gazprom Marketing & Trading LimitedGazprom House60 Marina PlaceHampton WickKingston upon Thames kt1 4bhEnglandt: +44 (0) 20 8614 1312f: +44 (0) 20 8614 1313w: gazprom-mt.comGazprom Global Energy Solutions2nd FloorCastlefield House48 Liverpool RoadManchester m3 4sbEnglandt: +44 (0) 845 260 1122f: +44 (0) 845 260 1133Gazprom Global LNGGazprom House60 Marina PlaceHampton WickKingston upon Thames kt1 4bhEnglandt: +44 (0) 20 8614 1312f: +44 (0) 20 8614 1313w: gazprom-mt.comGazprom Marketing & TradingRetail LimitedBauhaus5th Floor27 Quay StreetManchester m3 3gyEnglandt: +44 (0) 845 230 0011f: +44 (0) 845 230 0022w: Marketing & TradingRetail Limited (Power)Cornwall HouseBlythe Valley ParkSolihull b90 8afEnglandt: +44 (0) 845 230 0011w: gazprom-mt.comGazprom Marketing & Trading USA, Inc.Bank of America Building700 Louisiana Street, Suite 2500Houston tx 77002USAt: +1 (281) 404 4500f: +1 (281) 404 4501w: gazprom-mt.comGazprom Marketing & TradingFrance SAS68, avenue des Champs-Elysées75008 ParisFrancet: +33 (0) 1 42 99 73 50f: +33 (0) 1 42 99 73 99w: gazprom-mt.comGazprom Marketing & TradingGermania GmbHMarkgrafenstrasse 23Berlin 10117Germanyt: +49 (0) 30 85 61 77 18 00f: +49 (0) 30 85 61 77 18 99w: gazprom-mt.comContact usDo you have any comments orsuggestions for GM&T magazine?If so, we would like to hear fromyou – please email us atcommunications@gazprom-mt.comand we will publish your letters inthe next editionManaging editorEwa HemmerlingAgency editorLawrence CohenArt editorShailesh ChavdaPrinterNewnorth PrintPublished in November 2010 by:Gazprom Marketing & Trading,Gazprom House, 60 MarinaPlace, Hampton Wick, Kingstonupon Thames kt1 4bh.Edited, designed and producedby: beetroot, 68 Leonard Street,London ec2a 4qx.t: +44 (0) 20 7749 0180Views expressed in GM&T magazineare not necessarily those of thecompany. Permission to reprintany article will usually be given onapplication to the publisher –call +44 (0) 20 8614 1312If you would like a copy of this issueof GM&T magazine to be posted to acolleague, please email the address tocommunications@gazprom-mt.comGM&T magazine is printed on onrecycled paper containing 75 percent recycled waste and producedat a mill certified to the iso 14001Environmental ManagementStandard.Gazprom Marketing and Trading LtdNovember 2010

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