Enagás Carbon Footprint

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1 Enagás Carbon Footprint 2013

2 Contents 1. Enagás' profile Enagás' business activities Scope of operations Organisation Commitment to combating climate change Management of greenhouse gas emissions: carbon footprint Scope: area of activity Methodology: carbon footprint definition and calculation process Exclusions Level of uncertainty Greenhouse gas emissions External verification report of 24

3 1. Enagás' profile 1.1. Enagás' business activities Enagás is the leading natural gas transportation, regasification and storage company in Spain and the technical manager of the Spanish gas network. It is also an EU certified independent Transmission System Operator (TSO). Enagás provides key strategic support to the operation of the gas network in Spain. The company carries on the technical management of the gas system in Spain and the construction, operation and maintenance of gas infrastructures in a secure, efficient, profitable and sustainable manner. Enagás develops, operates and maintains its infrastructures, providing third-party access to the network and offering distribution companies services that meet their needs and expectations. The company boasts the following infrastructures: Over 10,000 kilometres of gas pipelines throughout Spain. Three underground storage facilities: Serrablo (Huesca), Yela (Guadalajara) and Gaviota (Vizcaya). Four regasification plants: Cartagena, Huelva, Barcelona and El Musel (Gijón). It also owns 40% of the BBG regasification plant in Bilbao and 41.94% of Gascan, a company in charge of constructing two regasification plants in the Canary Islands. Enagás also owns a 40% stake in the Altamira Plant in Mexico and 40% of the Quintero LNG plant in Chile through a joint venture with the Oman Oil Company. Enagás holds 51% in the joint venture. Enagás owns 50% of the company that operates the gas pipelines in Morelos and 50% of the company operating the Soto La Marina compressor station, both of which are in Mexico. 3 of 24

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5 1.2. Scope of operations Enagás' activities in the gas value chain include transportation of natural gas, regasification, underground storage, loading and unloading of tankers and LNG truck loading. The operations at the company's facilities are described below: Regasification plants: Gas is transported in LNG tankers at 160ºC below zero in liquid form and is unloaded at the regasification plants. There, the temperature of the liquid natural gas (LNG) is raised through a physical process, generally using seawater evaporators, converting it into gas. The natural gas is then injected into the network of gas pipelines and transported throughout the Spanish mainland. LNG is also loaded onto LNG tankers and LNG trucks at these facilities. Regulating and metering stations (RMS): RMSs are located at points of supply (outlets). They reduce the pressure of the gas to 16 bar as a means of starting a process that will regulate pressure until it reaches the final pressure used by companies and households. These stations also measure the natural gas delivered. Enagás currently has 428 RMSs. These kinds of facilities are constantly being built and brought into service as a result of requests for new gas supply points from gas distribution and transmission companies. 5 of 24

6 Gas pipelines: Gas pipelines are high-pressure steel tubes that can carry natural gas. At the end of 2013, Enagás transmission network was made up of 10,233 km of pipelines designed to be operated at maximum pressures of 72 and 80 bar. Compressor stations (CS): Compressors at these stations raise the pressure of the gas to 72/80 bar so as to maximise the transmission capacity of the pipelines. Enagás currently has 18 compressor stations which have a total installed generating capacity of 508,650 kw (ISO certified). The maximum pressure at the compressor stations is between 80 and 72 bar depending on the maximum pressure permitted by the gas pipelines in question, while the minimum pressure ranges from 40 to 45 bar. Underground storage service (AGS): To match supply with demand and cover peaks in consumption caused, for example, by seasonal fluctuations in demand and disruption to supply, the system must be able to store large volumes of gas. In the case of underground storage facilities, gas is either stored underground in former deposits or injected into deep aquifers or cavities hollowed out in saline formations Organisation The Resource Division coordinates climate change management at Enagás, together with the company s other divisions. Specifically, the Organisation and CSR Director, who reports 6 of 24

7 directly to the Managing Director of Resources, is responsible for managing and reporting on sustainability and environmental matters, which include calculating the carbon footprint. 2. Commitment to combating climate change Enagás operates the natural gas transmission network and manages its infrastructures in a secure, efficient, profitable and environmentally-friendly manner. This commitment minimizes the environmental impact of greenhouse gas emissions, which are the main cause of climate change. The company's CSR Strategy, Vision 2020, identifies the distinct competences in the area of sustainability that allow it to drive business development while taking into account one of the key factors in the evolution of the gas market: the trend towards a low-carbon economy. The strategy is based on three strategic objectives: To be a company that is a beacon for safety and reliability for all those who interact with it (safe and reliable company). To be prepared to exploit the opportunities of a sustainable and low-carbon business model (sustainable business). To have a team that is able to take the opportunities offered by the new, more competitive and more sustainable markets (outstanding skills). 7 of 24

8 3. Management of greenhouse gas emissions: carbon footprint Enagás' commitment to combating climate change and reducing greenhouse gases is growing every year. In 2011 the company set up an internal multidisciplinary working group that monitors emissions on a monthly basis, identifies initiatives for improvement and reviews compliance with the aim of reducing the company s emissions. This action has an effect on employees variable remuneration. Providing the Enagás Group's carbon footprint, in accordance with the GHG Protocol guidelines and directives and the UNE-EN ISO standard, is another step forward in the company's commitment to minimising greenhouse gas emissions. Enagás' carbon footprint was measured using an emissions quantification methodology that increases the accuracy and traceability of the greenhouse gas emissions from its activities. 85% of the emissions included in the carbon footprint have been verified with a reasonable level of assurance. The remaining 15% corresponds to fugitive emissions which the company is in the process of quantifying using methods that cannot yet accurately ascertain the level of uncertainty. Enagás verifies its carbon footprint in accordance with UNE-EN ISO standard to afford it accredited certification, thus increasing transparency for its stakeholders. It will also identify and quantify initiatives to reduce emissions across all areas of its activity in the years ahead Scope: area of activity The scope of this report includes the information for 2013 and is limited to Spain, where the Enagás Group (Enagás S.A., Enagás Transporte S.A.U., Enagás GTS S.A.U., Enagás Internacional S.L.U. and Enagás Financiaciones S.A.U.), carries on its business, focusing on financial control. Therefore, emissions from operations that are fully controlled by Enagás (100% ownership), including those from Enagás Transporte Norte which is 90% owned, have been reported. 8 of 24

9 ENAGÁS GTS. S.A ENAGÁS TRANSPORTE S.A.U NATURGAS BBG S.L. ENAGÁS S.A. ENAGÁS INTERNACIONAL S.A.U TERMINAL DE VALPARAISO GNL QUINTERO S.A. ENAGÁS FINANCIACIONES S.A.U ENAGÁS ALTAMIRA S.L.U ALTAMIRA LNG C.V. MÉXICO 3.2. Methodology: carbon footprint definition and calculation process Enagás has used the calculation methodology to quantify greenhouse gas emissions. Activity-related data, mainly quantities of natural gas and diesel, have been converted into tonnes of CO 2 equivalent based on emissions factors and global warming potential. For each of the activities performed by Enagás in the natural gas value chain (see section 1. Enagás' business activities), the facilities that produce greenhouse gas emissions were first of all identified, followed by the different sources of the emissions at each of the facilities. The sources of emissions, classified in accordance with the scope defined in the GHG Protocol and UNE EN ISO standard 14064, are as follows: Scope 1 (Direct emission of greenhouse gases) Direct emissions from stationary combustion. o Consumption of natural gas in process boilers: natural gas consumed in the preheating boilers of the RMS, plant boilers and methanol and TEG regeneration boilers. o Consumption of natural gas in evaporators: Consumption of natural gas in submerged combustion evaporators at regasification plants. o Consumption of natural gas in emergency generators. o Consumption of natural gas in turbo compressors: natural gas consumed in the turbo compressors in the gas compression process. 9 of 24

10 o Natural gas flaring in normal operations: natural gas emissions in pilot flaring systems and other flame maintenance systems at regasification plants. o Natural gas flaring in tanker loading operations: Natural gas generated (boil-off gas) in LNG tanker loading operations. o Natural gas flaring at the technical minimum: natural gas burnt in production, below the technical minimum of each plant. o Natural gas flaring due to leaks: natural gas burnt in normal operations at regasification plants. o Natural gas flaring due to maintenance: natural gas burnt in maintenance operations at regasification plants. o Consumption of natural gas in heating and cooling systems: natural gas burnt in boilers used to heat and cool offices. o Consumption of diesel in fire protection pumps and diesel generators: diesel used to produce electricity. Direct emissions from mobile combustion. o Petrol: emissions from the consumption of petrol to refuel Enagás' fleet of vehicles. o Diesel: emissions from the consumption of diesel to refuel Enagás' fleet of vehicles. Direct emissions from fugitive sources and venting of natural gas. o Natural gas vented at technical minimum: production of venting in periods of production under the technical minimum at regasification plants. o Natural gas vented: natural gas vented in maintenance operations and new connections in the transmission network. o Fugitive emissions at the Enagás facilities. o Fugitive emissions of F-gases from refrigeration equipment, air-conditioning equipment and fire protection equipment: emissions from leakage from Enagás' refrigeration equipment. Scope 2 (Indirect emissions of greenhouse gases through energy) Electricity consumption: emissions generated in the production of electricity by third parties and used by Enagás. Scope 3 (Other indirect emissions of greenhouse gases) Paper consumption: emissions generated in producing the paper used at Enagás (the purchased paper is accounted for as consumed). Employee work-related travel: emissions generated due to work-related travel by plane and train. Employee commute to work: emissions generated during employees daily commute from their homes to the workplace and vice versa. 10 of 24

11 Once the sources of the emissions were identified, the activity-related data of each source of emissions was then identified as follows: Own consumption of natural gas and venting occurring at the facilities and in the transmission network are always measured with measuring equipment owned by Enagás. The consumption of diesel, petrol and electricity has been accounted for using the invoices issued by the corresponding suppliers. The amount of natural gas leaked at facilities and in the transmission network, estimations has been estimated based on specific technical studies conducted by third parties, or alternatively, by Enagás due to the technical unfeasibility of measuring the data. The amount of HCFC leaked by heating and cooling equipment has been based on the service charge reports from the company in charge of maintaining this equipment. The emissions included in scope 3 were based on the data provided by the suppliers of materials or services (in the case of journeys). The last step in the quantification of the greenhouse gas emissions was the conversion of the activity-related data into tonnes of CO 2 equivalent based on the following emissions factors and global warming potential: The emission factor and the Net Calorific Value (NCV) listed in the national inventory for 2013, reported to the United Nations Framework Convention on Climate Change (UNFCCC), was used for the combustion of natural gas, diesel and petrol. It ensures coherence between the number of emissions reported and verified in the EU emission trading regime (EU ETS) and this Carbon Footprint report. The remaining emissions were calculated based on the most recent emission factors published by the Intergovernmental Panel on Climate Change (IPCC). The warming potential used for CH 4, N 2 O and HCFC were obtained from the same source. Enagás has defined a process to calculate and report the carbon footprint that contains the entire process for gathering consumption and activity-related data and calculating and reporting on emissions. This process has been reviewed and approved by the company's quality management system certified under ISO 9001:2008. All the emissions described in this report have been calculated through an emissions inventory which lists all the existing greenhouse gases. This emissions inventory has been verified with a reasonable level of assurance by AENOR, in accordance with the requirements laid down in UNE-EN ISO standard 14064: of 24

12 3.3. Exclusions 1. Emissions from facilities in which Enagás has an ownership interest but which are not controlled by it: BBG regasification plant (Bilbao) Altamira regasification plant (Mexico) Quintero regasification plant (Chile) 2. Scope 3 emissions which it is not technically feasible to quantify, such as: Consumption of construction material for acquired infrastructures Manufacture relating to equipment purchased Transport of natural gas in LNG trucks to satellite plants Transport and management of waste by the authorised waste manager 3. Scope 3 emissions with an associated level of uncertainty that is so high they are impossible to calculate: Extraction of natural gas Liquefaction of natural gas Transport of LNG by methane tanker from the extraction site to Enagás' regasification plants Transmission and distribution of the natural gas produced o o Direct emissions at distribution facilities Fugitive emissions of methane in natural gas distribution Sale of natural gas End-use consumption of natural gas 4. Emissions whose volume is deemed negligible compared to total emissions, e.g. emissions from vehicles hired under contracts other than operating leases Level of uncertainty In the case of emissions subject to the European Emissions Trading System (ETS), the level of uncertainty complies with Regulation 601/2012, which lays down the requirements on precision depending on the type of source stream and the characteristics of each facility. For the other emissions, the level of uncertainty is the maximum error permitted under the various regulations applicable as the emissions have been calculated on the basis of: Consumption and activity-related data, which are measured and monitored to manage invoicing. Emission factors from tested sources. 12 of 24

13 In addition, the measuring equipment is periodically verified and calibrated (internal and external audits of the quality management system verified in accordance with UNE-EN ISO standard 9001). Specifically, the gas meters are under legal metrological control (Royal Decree 889/2006) in accordance with the rules of the Technical Management of the Spanish Natural Gas System and Metering Protocol Detail PD-01. Fugitive emissions, which represent 15% of the total emissions of the carbon footprint, are calculated on the basis of individual measurements, which means a high risk of uncertainty which it has not been possible to detail. The uncertainty associated with each category of source of emission is given below: 13 of 24

14 Categories of sources of emissions Consumption of natural gas in process boilers tco 2 e % total emissions 31, % Source of measurement Turbine meters Level of uncertainty 2 Source of the uncertainty permitted by legal metrological control 889/2006 Consumption of natural gas in evaporators 2, % Turbine meters 5 permitted by legal metrological control 889/2006 Scope 1 1. Direct emissions from stationary combustion. Consumption of natural gas in emergency generators Consumption of natural gas in turbo compressors % 176, % Turbine meters Turbine meters 2 2 permitted by legal metrology (RD 889/2006) permitted by legal metrology (RD 889/2006) Natural gas flaring in normal operations 1, % Own ultrasonic meter 2 permitted by legal metrology (RD 889/2006) Natural gas flaring in tanker loading operations 49, % Own ultrasonic meter 2 permitted by ISO standard Natural gas flaring at the technical minimum 122, % Own ultrasonic meter 10 permitted by ISO standard of 24

15 Categories of sources of emissions tco 2 e % total emissions Source of measurement Level of uncertainty Source of the uncertainty Natural gas flaring due to leaks % Own ultrasonic meter 10 permitted by ISO standard Natural gas flaring due to maintenance - 0.0% Own ultrasonic meter 10 permitted by ISO standard Consumption of natural gas in heating and cooling systems Consumption of diesel in fire protection pumps and diesel generators 5, % % Turbine meters Supplier invoices 2 2 permitted by RD 889/2006 permitted by RD 889/ Direct emissions from mobile combustion Petrol % Diesel 1, % Supplier invoices Supplier invoices 2 2 permitted by RD 889/2006 permitted by RD 889/ Direct emissions from fugitive sources Natural gas vented at technical minimum 1, % Natural gas vented 44, % Own ultrasonic meter Own ultrasonic meter permitted by ISO standard permitted by ISO standard of 24

16 Categories of sources of emissions tco 2 e % total emissions Fugitive emissions 79, % Fugitive emissions of F- gases from refrigeration equipment, airconditioning equipment and fire protection equipment % Scope 2 Electricity consumption 36, % Scope 3 Paper consumption % Work-related journeys 1, % Daily commute to and from home by employees Carbon footprint 554,883 Source of measurement Studies conducted by Enagás or by third parties Service charge reports for the refrigeration equipment Supplier invoices Supplier invoices Supplier invoices % Estimation Level of uncertainty Uncertainty not defined Uncertainty not defined 2 Uncertainty not defined Uncertainty not defined Uncertainty not defined Source of the uncertainty n/a n/a permitted by legal metrology (RD 889/2006) Multistage load-balanced Class C polyphasic meters n/a n/a n/a Carbon footprint uncertainty of 24

17 3.5. Greenhouse gas emissions The Enagás Carbon Footprint Report includes a verification of the emissions for As this is the first verification, there is no base year. Instead 2013 shall be taken as the basis of calculation of the carbon footprint in the years ahead. 17 of 24

18 Total emissions During 2013 Enagás produced a total of 554,883 tonnes of CO 2 equivalent. The main sources of emissions from scope 1 and 2 were consumption of natural gas in turbo compressors, which represented 31.8% of the total emissions from scope 1 and scope 2, and natural gas flaring at the technical minimum, which accounted for 22.1% of the total emissions of scope 1 and scope 2. The emissions, from both sources of emissions, were the result of two events in the year which Enagás had very limited ability to control: In 2013, the natural gas received into the Spanish Gas System through the network of pipelines exceeded liquefied natural gas obtained from regasification plants for the first time since As a result, Enagás' compressor stations have increased their operations and emissions have risen. 18 of 24

19 At the same time, there was an increase in the number of days over which regasification plants operated below the technical minimum. The boil-off generated to keep the facilities operational, thereby increasing flare emissions, was eliminated. Although the company optimises the way the Spanish gas system works to guarantee supply in a secure, efficient, profitable and sustainable manner, the different agents in the System, especially the distribution companies, decide the entry and exit of gas based on their customers needs. This aspect has a significant impact on the greenhouse gas emissions produced by Enagás. Direct emissions by type of gas The scope 1 emissions, by type of gas, are as follows: The main gas emitted was CO 2, due to internal natural gas consumed to operate the Enagás facilities and the gas flared at the regasification plants. CH 4 emissions were due mainly to fugitive emissions and the natural gas vented in safety and maintenance operations at the facilities. The N 2 O and HCFCs emissions were practically negligible in comparison with CO 2 and CH 4 emissions. These emissions came from the combustion of natural gas and diesel and the leakages from Enagás' refrigeration equipment, respectively. 19 of 24

20 Direct and indirect emissions by activity 235,736 tco 2 e 244,962 tco 2 e 64,224 tco 2 e 7,941 tco 2 e 20 of 24

21 Note: The differences between the emission data disclosed in this report and the 2013 Annual Report are due to the following factors: Carbon Footprint Annual Report 2013 The Higher Heating Value (HHV) used for the conversion of the volume of natural gas to units of energy The Global Warming Potential of CH 4, used for the conversion of CH 4 emissions to tco 2 e The HHV (NCV) defined in the guidelines from the European Emissions Trading Scheme GWP data from the Fourth Assessment Report of the IPCC Actual HHV, measured by chromatography equipment GWP data from the Second Assessment Report of the IPCC Fugitive emissions Taken into account Not taken into account Energy consumption of positions This includes the consumption of all the positions (estimate of the consumption of positions where there is no computerised invoice available) Only the consumption of positions where computerised data is available has been included (approximately 70% of positions) 21 of 24

22 4. External verification report 22 of 24

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