Storengy UK: the Stublach project

Transcription

1 : the Stublach project Platts 5 th Annual European Gas Storage Conference Budapest, January 31 st, 2011

2 Agenda 1. A short presentation of 2. The outlooks for gas storage in the UK 3. The Stublach Gas Storage Project

3 01 01 I

4 A new and ambitious storage operator in the UK Based in Northwich, Cheshire 36 employees Strong support from Storengy 01 I OUR AMBITION 10% share of the UK gas storage market OUR STRATEGY Developing a diversified portfolio through acquisition and development of new facilities

5 01 I

6 A Long Success Story 01 I 1956 Beginning of injections in Beynes new aquifer facilities : Cerville, Saint-Illiers, Chemery 1970 First cavern facility Tersanne Gournay sur Aronde 1980 Etrez (salt cavern) new aquifer facilities : Soings, Saint-Clair, Germigny 1990 Pointe du Lac (Canada) 1992 Saint Flavien (Canada) 1993 Manosque (salt cavern), Céré (aquifer) 1994 Pozagas (Slovakia) 1995 Purchase of Trois Fontaine gas field 2001 Peckensen (EEG - Germany) 2003 PEG (Germany) 2007 Stublach (United Kingdom) + Amgaz / Depomures (Romania) 2008 San Benedetto del Tronto (Italy)

7 02 Gas storage in UK 02 I

8 A strong seasonality of the gas demand 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 J F M A M J J A S O N D J F M A M J J A S O N D

9 UK has a very low ratio storage/consumption

10 A expected need for more storage in the UK UK France Total storage capacity (Gm 3 ) 4 12 Total gas consumption (Gm 3 ) UK gas production dwindles and UK storage capacity is very low compared to importing countries 02 I

11 Production in NW Europe - last ten years The provision of production swing has been sustained

12 The use of storage remains almost constant

13 In north western Europe, the role of storage has been rather increasing De Joode, 2009

14 And a lot of new capacities are announced in Europe Mcm Mcm Mcm 2010 by 2012 by % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source GSE

15 When considering North-West Europe, most of them are in the UK UK Germany Netherlands France Danemark Source GSE

16 But in the UK, most of them are still «conceptual» existing in construction planning granted but no FID conceptual Source National Grid

17 Volume (bcm) What was expected in ,2 1 0,8 0,6 0,4 0,2 Salt cavern Depleted field Welton Aldbrough Caythorpe In 2005,... Bletchingley Portland Fleetwood Saltfleetby Albury I Albury II Holford I Source: Ten Year Statement 2005, National Grid

18 Volume (bcm) and what really happened 1.2 In 2010 Hewett 5bcm Esmond Gordon Gateway 1.5bcm 1 Portland Fleetwood 0.8 Saltfleetby AlburyII 0.6 Aldbrough 05 Aldbrough Bains 0.4 AldbroughII Whitehill Caythorpe Holford 0.2 Caythorpe05 Holford05 AlburyI Hill Top Years 02 I

19 As a first conclusion There are alternatives to seasonal storage, The gas market is currently very liquid, Due to US shale gas, a lot of LNG is in search of new markets, A lot of new infrastructures has been built, New seasonal storages in UK need to be very competitive (appropriate level of LRMC)

20 Supply / Demand (mcm/d) Marginal Supply Utilisation UK gas storage market: a growing utilisation of the marginal supply sources is expected % % % % % 0 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 0% UKCS IUK LNG Medium Average top 10 days demand (SEV) Norw ay BBL Long Short MS utilisation Source: Ten Year Statement 2007, National Grid 02 I

21 The daily demand is highly variable

22 Storage for winter 09 storage cycling withdrawal injection 04 I

23 Storage for winter 09 storage cycling withdrawal injection 04 I

24 Day to day variations as well as intraday are likely to increase Reception of LNG cargoes: market opportunities, weather conditions, Power generation: development of CCGTs, wind power intermittency,. Week days, weekends, Asymmetrical withdrawal and injection capacities: 50 days/withdrawal, 160 days/injection for storages, 6 days/withdrawal, no injection for LNG

25 02 I UK gas storage development: uncertainties Huge investment (esp. offshore) risks profile Unsecured planning and permitting processes Gas market uncertainty Short term market UK excess import capacity (infrastructures) US shale gas & LNG Norwegian swing Replacement nuclear power plants / coal plants Renewable wind (and its intermittency) Regulatory: ntpa TPA exemption Allocation regime: auctions, reserve price, LT contracts Business rates, Crown Estate lease, etc.

26 03 Stublach Gas Storage Project 03 I

27 Stublach, near Northwich (Cheshire) 28 salt cavities, enhancing the security of supply to the UK market Total working gas (Mm 3 ) Withdrawal (Mm 3 /day) Injection (Mm 3 /day) I

28 A long term partnership with INEOS Builds the facility, Owns and operate the gas storage Sells gas storage services, Owns the land, Supply the water for solution mining, Offtake the brine. 03 I

29 General features Brine and Water Solution Mining Compound, 1800 m3/h Up to 28 Cavities Electrical Connection (7 MVA) Gas Plant Phase 1A 8 MW / 4 MW Gas Compressor 2 Dehydration Towers Interconnecting services between Gas Plant and 10 Cavities Gas Connection to National Transmission System Electrical Connection (33 MVA) Phase 1B/2A 4 MW Gas Compressor Interconnecting services between Gas Plant and up to 18 Cavities 2 Dehydration Towers Phase 2B 8 MW Gas Compressor

30 delivers according to plan! Summer 2007 April 2008 Summer 2008 Summer 2009 Autumn 2009 to 2012 Summer 2013 Autumn 2013 Autumn 2014 Enabling civil works Solution Mining Compound construction first caverns available for gas storage Phase 1 drilling campaign Brine & Water Infrastructures commissioning first gas filling additional Phase 1 caverns operational 2010 to I

31 02 I

32 Gas plant construction EPCM contractor: Jacobs Manchester Commissioning target date: end of 2012 Flexible design Phase 1: 16 mcm/d injection & withdrawal Subsequent upgrades (compression, dehydration, etc.): up to 33 mcm/d injection & withdrawal Customers needs 03 I

33 Gas Plant 3D Model

34 Working gas mcm Physical 12 days 12 days Withdrawal Why? To compete with Hornsea, with a product even more reactive. Mcm/d injection-withdrawal 40 Injection very Storengy flexible UK product. Limited 12 days 12 days Working gas 100mcm Why? To compete with Hole House, and to answer the market s needs with a Strengths - Matches physical characteristics of Stublach - Highly flexible - Injection and Withdrawal rates equal - Short Injection duration Winter/summer Mcm/d injection-withdrawal 20 days 90 days Withdrawal Working gas mcm Injection WE/WD 20 days 90 days 5 days 2 days Withdrawal Injection Strengths - Adapted to the market needs - Faster injection than Hornsea (lower summer prices) -Flexibility -1 : 4.5 Stublach VS -1 : 9 Hornsea - Option to reduce from 90 to 60 days Mcm/d injectionwithdrawal days 2 days Strengths - Very high withdrawal against extreme prices - Easy switch - Very high injection against volatility - Flexible - Faster than traditional salt caverns and LNG peak shaving facilities

35 Thank you