Blue Fuel Newsletter | November 2014 | Vol. 7 | Issue 4

BLUE FUELNovember 2014 | Vol. 7 | Issue 4

www.gazpromexport.com | [email protected] | +7 (499) 503-61-61 | [email protected] 1


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© Gazprom Export

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Gazprom Export Global Newsletter

“Blue Corridor 2014” NGV Rally Hits the Road

Expansion of UGS Katharina

– Increasing European Energy

Security

GM&T Bunkers LNG Vessel in Russia

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BLUE FUELGazprom Export Global Newsletter

Publishers Contact Info:www.gazpromexport.com | [email protected] +7 (499) 503-61-61 | [email protected]

To Our Readers.............................................................................

Europe’s Oversupplied Gas Market..............................................

“Blue Corridor 2014” NGV Rally Hits the Road ..........................

Gazprom Energy: 8 Years of Growth and Success......................

Expansion of UGS Katharina – Increasing European Energy Security .........................................

GM&T Singapore Celebrates Five Years.......................................

GM&T Bunkers LNG Vessel in Russia.......................................

GM&T-Sponsored Laboratory at SUMIS Opens .....................

Access Asia’s Growth through the Region’s only AAA-rated Country.........................................................................................

Natural Gas – The Fuel of Choice for Germany’s Residential Developers..........

Supporting Visually-Impaired Children in the Smolensk Region................................................................

Open World in Germany...............................................................

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Despite a thoroughly discouraging treatment of natural gas on European energy markets, which is putting unwarranted pressure on the gas industry as a whole, Gazprom Export remains profoundly optimistic about the prospects of a wider application and diversified use of natural gas as an energy carrier.

This positive market outlook by Gazprom Group’s export arm is based on the growing awareness among its partners and customers that this hydrocarbon is not merely a “bridge” or a short-term “transitional” fuel on the way to a green economy, but the fuel of choice thanks to the apparent competitive advantages of natural gas.

Nowhere were these benefits of natural gas more visible than during the Blue Corridor 2014 Rally this autumn. Organized by Gazprom Export and its European partners, the rally showcased the benefits of natural gas as a caravan of natural gas-fuelled vehicles (NGVs) made its way across Europe’s roads.

There are two key features of NGVs that make the rally such a success story. First of all, participants and followers of the rally are reminded of the significant economic benefits that NGVs offer. The cost of natural gas, in the form of either compressed natural gas (CNG) or liquefied natural gas (LNG), poured into a car’s tank is about 50% less than the cost of petrol and 30%

lower than diesel fuel. These benefits are not only limited to road transportation. Savings of this scale are also associated with the use of LNG as a bunkering fuel for marine vessels.

Secondly, the environmental benefits of natural gas as a fuel for transportation are also undisputable. As a motor fuel natural gas reduces emissions of carbon monoxide by 70 - 90%, non-methane organic gas by 50 - 75%, nitrogen oxides by 75 - 95%, carbon dioxide by 20 - 30%. On top of that, light-duty vehicles powered by natural gas emit up to 90% less nitrogen oxide and 98% less hydrocarbon than their petrol-fueled competitors.

All in all, this steadily expanding market for natural gas - already the most promising to date - can become a real game-changer for the industry thanks to its clear economic and environmental benefits. Last year, European experts have calculated that a wider use of natural gas in transportation could bring about €60 to €70 billion in savings by 2030. Natural gas in transport is also the most effective solution to combat climate change and reduce emissions.

Natural gas in transportation is only one application that clearly showcases the benefits of natural gas. Gazprom Export remains firmly committed to promoting gas as the most environmentally-friendly, abundant and affordable fossil fuel, which provides a reliable and stable source of energy.

To Our Readers

Continues on page 5

Europe’s Oversupplied Gas MarketSergei Komlev, Head of Contract Structuring and Price Formation Department, Gazprom Export

There is no disagreement among analysts that the European gas market is oversupplied. Some of our clients even claim that Europe’s natural gas oversupply

is here to remain for the next decade at the very least. Oversupply is a major challenge to the gas industry on the continent. Our clients encounter a mismatch of contract



Europe’s Oversupplied Gas MarketSergei Komlev, Head of Contract Structuring and Price Formation Department, Gazprom Export

Europe’s Oversupplied Gas Market

prices and hub prices. This disparity has been forcing Gazprom to review pricing terms in its contracts by introducing various discounts.

The first question that this “massive” oversupply brings to mind is ‘where does it come from?’ After the 2008 financial crisis and until the first half of 2010, oversupply could be explained by end-users’ excessive purchases contained in their contracts. End-users had been too optimistic in assessing their future requirements and market demand while signing two-year delivery contracts with importers before the crisis broke out. End-users were subsequently forced to dump surplus unused gas on hubs to meet their take-or-pay obligations, thus causing oversupply. But lessons were learnt since then, and end-users have become more cautious in their off-take pledges.

Also, prior to the Fukushima disaster, the U.S. centered shale gas revolution could be a reasonable explanation for the gas glut on European hubs as large volumes of LNG that could not be absorbed by the suddenly gas-affluent America were redirected to Europe. But redirection is not a valid reason for oversupply anymore. Europe now attracts only 1% of global LNG spot cargoes, while deliveries of LNG under long-term contracts were downsized dramatically.

Paradoxically, a gas glut takes place at a time when physical supplies of gas are rather tight. It is true that gas demand dropped in the first half of 2014 due to mild weather, but physical deliveries of gas were reduced to a greater extent. Gazprom had to increase its export gas flows to Europe to cover shortages created by other suppliers. That gives solid ground for the conclusion that hubs are overfilled with largely virtual or, shall I say, “paper” gas.

Under the previous “simple” system, oversupply was less likely because our clients ordered as much gas from Gazprom as was nominated by their own customers. Long-term contracts were shaped at a time when gas spot markets in Europe were not developed, and gas prices linked to oil prices were practically independent from supply/demand dynamics. But contracts were flexible in volumetric terms. There was no need to flare gas when buyers could not meet their firm off-take obligations due to weak demand. They had the option of “make-up-gas.” After prepayment for gas which was not off-taken, a buyer could receive it anytime when really needed within the next five years.

As hubs matured, a new class of market participants such as banks and commodity traders emerged. Importers could

now transfer their contracts’ volumetric risks to this new category of customers. This is done by selling firm delivery obligations of the producers on a forward curve. It is good business for importers, but the “financialization” of contracts leads to a gap between “paper”/virtual gas and real gas. No one is in a position to predict weather conditions. When traded volumes of “paper” gas significantly surpassed real world demand because of the abnormally warm winter in 2014, it created oversupply. This artificial oversupply put significant pressure on the market, resulting in a collapse of spot prices. Mechanism of one-side balancing on hubs is described in more detail in Chart 1.

Market developments have shown that our major clients who are focused on running their businesses are not capable to handle hub’s chronic gas oversupply on their own. The time has come for producers to adjust their contracts with European partners to secure their inherent interests as suppliers. Currently, supply contracts provide full-scale flexibility to our customers allowing them to increase import-volumes on short notice. But common excessive purchase orders have been leading to this oversupply on the European market and downward pressure on wholesale prices. Mitigating the oversupply and balancing the markets could be achieved by expanding the take-or-pay clause to 100% of contracted volumes and including the option of a downside revision of contracted volumes rather than only allowing for upward revisions.

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Chart 1: Use of LTCs as Financial Instrument Leads to Structural Oversupply




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The international Blue Corridor 2014 Rally, dedicated to showcasing OEM-produced natural gas-fuelled vehicles (NGVs), started on 7 October in St. Petersburg, Russia.

This year, the start of the rally coincided with the opening ceremony of the St. Petersburg International Gas Forum, which took place in the city’s Expoforum Convention and Exhibition center. Gazprom CEO Alexey Miller provided a symbolic “green light” to announce the start of the rally.

The main organizers of the rally are Gazprom Export, Gazprom Gas Engine Fuel and E.On Global Commodities.

The participants of the Blue Corridor 2014 Rally drove along the motorways of Estonia, Latvia, Lithuania, Poland, the Czech Republic, Germany, Austria, Italy, Slovenia, Croatia, Serbia, Hungary, Slovakia and Belarus, covering altogether over 6000km, and finishing on 31 October.

This particular route has been chosen deliberately. Many of these countries have already been demonstrating significant demand for natural gas as motor fuel. The others are expected to show substantial demand growth in the future. Moreover, huge benefits in these countries are linked to the use of natural gas as bunkering fuel for marine vessels.

The Baltic cities of Tartu, Riga, and Vilnius represent new promising markets for gas as a motor fuel. In Estonia, after a decline in the early 2000s, interest in natural gas as a transportation fuel is on the rise again. Today, Eesti Gaas operates five CNG stations. The municipality of Tartu, where the first round table discussion was held on 9 October, bought its first five CNG Scania buses in 2011. The head of Tartu’s Department of Municipal Economy, Rein Haak, said: “The experience of deploying the first five

CNG buses has become the basis for the municipality to plan a larger procurement. It is still hard to predict how many methane buses will be purchased, but it could amount to 25-50 new buses. As a result, we can determine the perspectives for the development of the NGV market in Estonia.”

In neighboring Latvia the NGV market is still in its infancy. Only two corporate NGV-refueling compressor stations and one mobile CNG station, which fills 10 re-equipped buses in Jūrmala, are currently operating. However, a growth spurt could come soon. Local AMO BUS, in cooperation with Dutch partners VDL, prepared a technical concept for a passenger bus running on LNG. The engine and cryogenic system of LNG storage has been chosen, and configuration has been tested. The company could start assembling a prototype model in the nearest future.

Just 300 km away, Lithuanian capital Vilnius already boasts 150 municipal buses running on CNG, a significant share of the total 280-bus-fleet in the city. Currently, there are four CNG filling stations operating in Lithuania, three of them run by SG Dujos, the organizer of the Blue Corridor Rally’s Lithuanian route. By the end of 2014, SG Dujos is expecting to commence operating another three stations.

In Poland, several times visited by the Blue Corridor Rally, this year’s round table coincided with the Methane for Auto Industry International Fair. The event was held under the Honorary Patronage of the Polish Minister of Economy and showcased the advantages of using natural gas in vehicles. This year the fair was also promoted at Polish transport universities and therefore drew a high attendance by young car enthusiasts, along with representatives from the gas and car industries.





Another traditional stop on the rally route was the Czech Republic. The Czech town of Plzen is not only famous for its beer, but also for the CNG filling station of the Czech Post. The country is certain to be a rapidly developing NGV market, with already 53 public CNG filling stations in operation (March 2014) and more than 7,000 natural gas vehicles on the country’s roads. At least 45 new fuelling sites will be in service by the end of 2014, and within three years nearly 90 CNG filling stations are expected to be opened in the Czech Republic.

A new and important region involved in this year’s Blue Corridor Rally was Southern Germany, where it stopped on 20 October in Nuremberg. Gazprom Germania acquired 12 natural gas filling stations from a Bavarian energy supplier on 1 September 2013. After the round table event in Nuremberg the rally also briefly stopped in Bamberg, a historic city 60 kilometres north of Nuremberg, for the inauguration of a new natural gas filling station.

Germany is one of the most advanced countries in Europe when it comes to natural gas mobility, with a network of more than 900 natural gas stations across the country and around 96,000 gas-powered vehicles. By 2020, it is expected that the number of natural gas filling stations will rise to 1,300, further expanding the availability of the blue fuel.

The first part of the rally culminated on 22 October in Milan, Italy. This country is the recognized European champion in using gas for transportation, with about 823,000 NGVs and 1022 gas-filling stations, 967 of which are public and spread

across the country. For the protection of air quality, the Lombardy Region passed a law making it compulsory for new filling stations to have NG fuel columns. And the results are more than satisfactory - the number of NGV stations doubled in the past five years surpassing the target of 150 stations, said Mauro Parolini, commissioner of Commerce, Tourism and Tertiary of the Lombardy Region.

Italy doesn’t intend to stop here. On the contrary, the government expects many more natural gas cars to run on the country’s roads in the future. Currently, the Italian government is working on a plan for the expansion of LNG use in transportation, said Vincenso Zezza, Head of Division IX (automotive, shipbuilding, transport, optical and electrical products) at the Ministry of Economic Development. Meanwhile, the potential of LNG as a transport fuel for another important European market – the UK – is also significant, forecasted Tatiana Fayzullina, the Head of Gas for Transport at Gazprom Marketing & Trading.

With positive impressions and in a good mood the caravan of cars carrying logos of the Blue Corridor Rally rolled on to Ljubljana, Slovenia, thus opening the second part of its big journey, leading further to Serbia, Hungary and Belarus.

Our report on the second leg of the Blue Corridor Rally will be published in our December edition. You can also read the reports from the Blue Corridor 2014 Rally as well as other interesting articles on natural gas in transportation on www.bluecorridor.org.




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In a little over eight years Gazprom Marketing & Trading’s (GM&T) retail business, known as Gazprom Energy, has expanded into new territories, entered new markets, grown its customer base and employed more people. Gazprom Energy is now supplying businesses of all sizes across Western Europe and has ambitious growth plans for the future.

In 2006, when GM&T entered the UK energy retail market by acquiring a portfolio of less than a thousand sites, the vision of creating a market-leading business seemed almost impossible. But with just ten employees and their wealth of experience, passion and knowledge Gazprom’s first branded retail business outside Russia began to flourish.

Strong start in the UKGazprom Energy now serves over 15,000 industrial and commercial customers in the UK. The majority are supplied with natural gas, but the number of power customers has been growing steadily since the business was granted its electricity supply licence in 2009.

Earlier this year, it was announced that Gazprom Energy’s share of the UK business gas market had increased by 15 percent in just six months and the Manchester-based business had climbed two places in the market share table. This dramatic growth was largely down to a host of large deals including a 0.1 billion cubic meter deal with a global steel producer.

As well as large manufacturing and production sites, Gazprom Energy supplies gas to offices, churches, schools and shops. One of the company’s specialities is multisite

restaurant and retail chains, many of which are focused on improving energy efficiency. A perfect example is Nando’s, one of the UK’s most popular restaurant chains and a Gazprom Energy customer for over five years. With over 300 restaurants consuming a total of 0.01 billion cubic meters of gas per annum, and an annual growth rate of around 30 percent, Nando’s needs to tightly control its gas consumption to avoid unnecessary cost. With the help of Gazprom Energy and its advanced metering service, the energy management team at Nando’s is better able to manage gas consumption and engage staff with energy efficiency initiatives.

European growthTogether with the GM&T France team in Paris, Gazprom Energy began selling gas to industrial and commercial end users across France in 2010 and has since started targeting smaller businesses and organisations in preparation for the phase out of the government-regulated gas tariff in early 2015.

As well as France, Gazprom Energy now sells power to residential and small business consumers in Germany after entering the market in 2011. This was closely followed by a move into the Netherlands when the business opened a branch in Hertogenbosch in 2012.

Gazprom Energy: 8 Years of Growth and Success



Erdgasspeicher Peissen GmbH (EPG), a joint venture of Gazprom Germania GmbH and VNG Gasspeicher GmbH (VGS), has commenced operations of a new cavern of its Underground Gas Storage (UGS) Facility Katharina near the town of Bernburg, Germany. This festive occasion coincided with the fifth anniversary of EPG which has commissioned the first cavern it leached on its own. As a result, the facility, named in honour of Empress Catherine II of Russia, who was born Princess Sophie von Anhalt-Zerbst, now has 158 million cubic meters of natural gas at its disposal in three underground caverns. EPG acquired the first two of these caverns in October 2011 and April 2012 from VGS, which has been operating the nearby UGS Bernburg for 40 years.

UGS Katharina is a cavernous storage facility. Such caverns are created by drilling and leaching underground mineral salt deposits down to a depth of 500 to 700 meters. In the process, water is used to dissolve the salt and transport it to the surface. UGS Katharina is undergoing continuous expansion in cooperation with the local salt industry. A total of 12 caverns providing a usable storage volume of nearly 600 million cubic meters are planned for construction.

“These storage facilities constitute a key pillar of Europe’s energy security with regard to natural gas. After becoming fully operational, Katharina will be able to supply natural

gas to nearly 300,000 households each year,” – said Ivan Skoryy, one of EPG’s two managing directors.

Since the beginning of 2014, EPG has been working on building the energy supply structures as well as a compressor unit. Meanwhile, an information center has already begun welcoming visitors who want to learn more about the new storage facility. The next year will see the construction of gas dehydration, processing and compressor units, along with a 37 kilometer gas link which will connect Katharina to the JAGAL pipeline. Below the surface the number of caverns is to increase to seven by 2017, enabling the facility to achieve its maximum withdrawal output – 24 million cubic meters per day.

Investments in gas storage such as UGS Katharina are one of the cornerstones of Gazprom’s strategy in the European market and reflect the company’s commitment to increasing European energy security. “Gazprom is committed to the expansion of its UGS capacities abroad that will increase the flexibility and reliability of our export supplies,” said Deputy Chairman of Gazprom’s Management Committee Alexander Medvedev. Since 2006 the company almost tripled its European UGS capacity to 4.1 bcm. By 2015, Gazprom will increase the capacity to over 5 bcm and by 2030 the company expects to be capable of storing 5% of its annual export volumes underground.

For more information please visit www.ugs-katharina.de/

Expansion of UGS Katharina – Increasing European Energy Security




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In October 2014 Gazprom Marketing & Trading Singapore (GM&TS) marked its fifth birthday.

The company was officially incorporated on 19 October 2009. In December of the same year, a commercial director from the London office headed to Singapore to explore the commercial opportunities in the region. The rest, as the phrase commonly goes, is history.

And while GM&TS’ history thus far may be short in comparison to longer established energy companies, it is one that has recorded many achievements and many firsts. A very successful business, and Gazprom’s commercial presence in Asia, has been established in the five years since that initial foray by GM&T’s London headquarters into the region.

One employee in a serviced office quickly turned into three and by the end of 2011 GM&TS had 50 employees and moved into permanent office premises in the heart of the island nation’s business district in September 2011.

Today, GM&TS has 56 employees of 15 nationalities working together to create a strong platform for Gazprom’s business in Asia. This platform now includes LNG trading, marketing and origination, LPG trading, financial risk management and shipping.

In our first couple of years, we quickly built our reputation in LNG trading – securing the first ever sales of Russian gas into India and Taiwan, and being one of the first

to respond to Japan’s energy crisis after the Fukushima disaster – forming strong relationships with major players in Asia’s energy markets. In 2013, we closed a 20-year sales and purchase agreement (SPA) with GAIL and this year, signed a matched sale-purchase agreement (MSPA) with Petrovietnam, the first ever LNG MSPA signed in the country.

While LNG accounts for a large part of the business, GM&TS is constantly reviewing its strategy and operations to optimise the value created for the parent company, Gazprom. GM&TS has built an LPG portfolio, which is growing annually and now offers financial derivatives to customers. With the capability of the commercial team and key support functions such as finance, risk and legal developed over the past few years, the company is well positioned for future growth arising from Gazprom’s projects in Russia’s Far East.

For GM&TS, being the face of Gazprom in the region also extends beyond the commercial realm. For the past three years, GM&TS has organised, on behalf

GM&T Singapore Celebrates Five Years of Growing Gazprom’s Business in Asia

Continues on page 11



of Gazprom, CSR activities in music and cultural arts, supporting the parent company in the organisation of social and charitable activities for cultural development, education and sport.

Such initiatives are led by Serguei Edrenkine, General Director of GM&TS. He said, “We are greatly privileged to be trusted by Gazprom to lead its CSR efforts in music and cultural arts. Last year, we formalised these efforts into an annual concert series called Synergy in Music, which encompasses a concert featuring top Russian classical musical talents and a series of masterclasses for local music students.”

A milestone birthday offers the opportunity to celebrate past accomplishments and anticipate the potential the future holds.

Medan Abdullah, a 30-year-veteran of the industry, who joined GM&TS as Managing Director last September said, “Even before I joined GM&TS, I knew of the organisation’s dynamism and innovativeness, sometimes having experienced it on the other side of the negotiating table. Everything that I have seen and experienced since I joined GM&TS validates my belief that as remarkable as its growth has been in the past five years, this organisation will accomplish much more in the next five, and I am proud to be able to be part of the GM&TS story for the next lap.”


GM&T Bunkers LNG Vessel in Russia for the First Time

Gazprom Marketing & Trading’s (GM&T) newly delivered LNG carrier, the “Pskov”, was fuelled with heavy fuel oil and marine gas oil at the port of Nakhodka in the Primorskiy Region of Russia.

This marks the first time of a GM&T time-chartered LNG vessel bunkering in a Russian port. The fuel was provided by another Gazprom subsidiary – GazpromNeft Marine Bunker.

Upon completion of the bunkering, the “Pskov” proceeded to the port of Prigorodnoye, where the LNG terminal of the Gazprom-majority owned “Sakhalin-2” project is located. After completing the gassing up and cooling down of its cargo tanks, the vessel will deliver her maiden LNG cargo to a GM&T customer in Asia.

Nikolai Grigoriev, Managing Director of Shipping at GM&T, said, “The port of Nakhodka is an increasingly important international bunkering hub which provides cost savings and voyage optimisation opportunities for companies operating in Asia. Bunkering our time-chartered LNG carrier ‘Pskov’ at Nakhodka is a milestone for the GM&T Group, as it signifies our expanding shipping capability and flexibility which is particularly relevant for our future projects in the region such as the Vladivostok LNG project.”

BackgroundThe LNG carrier “Pskov” is a state-of-the-art LNG carrier featuring membrane tanks with cargo capacity of 170,200 cubic meters, Ice2 ice-class and winterization capability and is powered by a tri-fuel diesel-electric propulsion system. The vessel is on a long-term charter to GM&T from Sovcomflot and is the fifth in GM&T’s fleet of ice-class vessels.

Pskov LNG carrier

GM&T Singapore Celebrates Five Years of Growing Gazprom’s Business in Asia




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GM&T-Sponsored Laboratory at Admiral Makarov State University of Maritime and Inland Shipping Opens

A newly refurbished Laboratory of Electric Machines co-sponsored by Gazprom Marketing & Trading (GM&T) and one of its key partners - Greek shipping company Dynagas - was opened at the Admiral Makarov State University of Maritime and Inland Shipping (SUMIS) in St. Petersburg, Russia.

The laboratory will enable SUMIS cadets to learn different modes of vessel electric propulsion system operation (free wave, rough sea, ice conditions, acceleration, stopping, emergency). Additionally, cadets will be able to design models of power units of various types of vessels: tankers, ice-breakers, ice-class vessels and new generation research vessels.

The laboratory equipment was designed and manufactured by Russian company CJSC “Ship Electric Propulsion” in cooperation with international companies such as Siemens AG, VACON, Vaasa Engineering Oy and Ingeteam + Indar.

Nikolai Grigoriev, Managing Director of Shipping at GM&T said, “The opening of this laboratory is an essential milestone in the development of a training system for engineers who will operate highly automated vessels such as LNG tankers. It complements the comprehensive programme of GM&T to develop highly qualified Russian seafarers and increase Russian components in our LNG fleet.”

GM&T has been supporting SUMIS since 2010 and implemented various projects and initiatives, including the on-board training of SUMIS cadets and employment of SUMIS graduates on LNG and other vessels of GM&T’s business partners, including the world’s leading shipping companies Dynagas, SCF Group, Stena Bulk, Teekay and TMS Cardiff Gas. This year alone, more than 100 SUMIS cadets have had shipboard training and 27 SUMIS graduates received employment as navigation and engineering officers as part of this programme.



Access Asia’s Growth through the Region’s only AAA-rated Country

Singapore Exchange (SGX) is the world’s most international exchange located in the fastest growing region of the world.

Asia’s GDP has converged rapidly on the U.S. – growing from 40% of U.S. GDP to 80% in 2012. In 3 years’ time it is expected to surpass it. The trend is leading to a shift in investment portfolios, gravitating to Singapore, the only Asian AAA rated Sovereign, with high corporate governance and over $2 trillion in managed assets. It is arguably the largest private banking center in the world. Singapore is home to more than 770 publicly listed companies with over 40% hailing from various parts of the world. It is also an Asian headquarter to more than 170 companies in the Fortune 500 list.

The Asian middle class today is 30% of the global middle class or 625 million. This number will triple in seven years to 1.5 billion. By 2030, Asia is expected to account for over 40% of global middle-class consumption.

Efficient and transparent capital markets are paramount to sustain this growth and for businesses catering to the middle class to tap the region’s growing wealth.

There are now more high net worth individuals in Asia Pacific, than in Europe. 41% of them are aged 45 and younger, compared to only 10% in North America. They have longer life spans, a more global outlook and diversified investment strategies. Russian shares are part of that diversification. It is the role of Singapore Exchange to help Russian corporates with strong Asian links or focus to gain access to Asian capital markets.

A stock exchange is a fundamental engine to capital market formation. SGX as a leading international exchange has advanced technology, market oriented regulation, attractive products and instruments, plus a varied pool of participants.

In the last few quarters, SGX has rolled out a number of initiatives, including the world’s fastest trading engine, market oriented admission standards for its Mainboard, dual currency trading and new rules for natural resources companies. SGX already offers a cost effective way of trading. Retail investors can subscribe for IPOs via 2,500 ATM points. In 2013, approximately $150 billion of funds were raised through equity and debt on SGX.

The new Mineral, Oil & Gas rules have brought about a growing cluster of natural resources companies on SGX. Singapore does not have any natural resources but it is the largest oil trading hub in Asia and third-largest in the world. It is also one of the top three oil refining centers in the world.

Investor demand for the oil and gas sector is buoyant and growing rapidly. In 2013, the value of securities traded in this sector on SGX was more than US$5 billion, quadrupling year-on-year and growing 7 times just over the last 2 years. In terms of turnover velocity in the 12 months ending May 2014, Singapore’s oil and gas sector continues to be high at more than 200%. It is nearly twice as high as Canada, 2.6 times higher than Australia and more than 3 times higher than London.

Gazprom has benefited from these changes. Having listed its GDRs on Singapore Exchange, Gazprom is the largest Natural Resource company on SGX.

A wise man once said – Don’t judge each day by the harvest you reap, but by the seeds you plant. Over the past few years, SGX planted many seeds. We operate from Singapore with offices in a number of locations including Europe, serving global clients as a bridge into Asia. We actively work with SGX-listed companies to build awareness for them, and profile them to retail investors and global institutions.

Paulina McGroarty, Singapore Exchange, Head of Listings, EMEA

Paulina McGroarty, Singapore Exchange, Head of Listings, EMEA




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Natural Gas – The Fuel of Choice for Germany’s Residential Developers

Continues on page 15

Natural gas remains the most popular fuel for German residential developers, the latest figures from the German Federal Statistical Office show.

According to the report, 103,000 new residential buildings were constructed in Germany in 2013. In 50.6 % of them, natural gas was used as the primary source of heating. Following suit by a considerable margin were heat pumps (32.2%), local and district heating (7.1%) and wood (5.0%). Oil and electric heating were rarely used in new buildings (each less than 2%).

The market share of natural gas in new buildings decreased somewhat between 2005 and 2010 but has stabilized at slightly above 50% since 2010. The number of households using a combination of energy sources has continued to grow: the share of newly constructed residential buildings where more than one energy source is used for heat generation increased from 33.6% in 2011 to 41.1% in 2013. Last year, 73.6% of households completely or partially relied on renewable energy sources for heating, while natural gas often acts as a backup fuel.

Supporting Visually-Impaired Children in the Smolensk Region

Illustrated Books for Visually-Impaired Children, a charity event that is part of the Learning From You social development program organized in the Smolensk Region by Gazprom Export in collaboration with the For the Future Center, was held this year on 16 September at the Tenishevs Cultural Exhibition Center. This has been an annual event for over a decade and is supported by Gazprom Export and our

German partners, Wintershall Holding AG and Verbundnetz Gas AG.

The event was attended by orphans and abandoned children from the Chernysh Boarding School for blind and visually-impaired children, the Yartsevo Correctional Boarding School in the Smolensk Region, and Compensatory Kindergarten No. 7 in the city of Smolensk. The children were treated to an interactive entertainment program

involving clowns and a festive concert. The performance was followed by the presentation of book sets for preschoolers (aged four to six) and elementary school students (aged eight to ten).

The Illustrated Books are designed to take account of age groups and special needs for visual and tactile perception of pictures among children with visual impairments.



The publications feature bright colors, extra-large fonts, full-page pictures with convex contours, and all kinds of multidimensional and mobile constructs, applications, and inserts made from various materials. Books presented in this way facilitate an enhanced sensory experience and the development of touch, stimulation of any remaining vision, reading habits, and the development of speech, attention,

reasoning, memory, and imagination. The materials allow children to familiarize themselves with the surrounding world and introduce them to culture and the arts, not to forget how they stimulate positive emotions as well. Working with these books combines educational activities and eyesight development exercises with interesting play, providing children with a better chance for a brighter future.


Supporting Visually-Impaired Children in the Smolensk Region

Open World in Germany

For the eighth year in a row, Germany has hosted the consistently successful events of the Open World international charity project, involving over a hundred children from Russia and Germany in October each year.

The performing arts teams included children aged between 8 and 17 years from various backgrounds, including abandoned children and children from stable families. What they had in common was talent, creativity, and determination to communicate, being eager to experience new and interesting things.

As usual, the creative tour opened in Berlin, where the first Open World 2014 concert was held on 9 October at the Russian House of Science and Culture. This address, well-known to Berlin residents for decades, has been the location of some unforgettable encounters with Russian and German culture.

The Open World project then moved on to Leipzig. With audience interest running high, two concerts played to a full house on 12 October at the renowned Central House of Actors. This year’s performers included The Saxons, Germany’s break dance champions.

Much that was new and interesting awaited the children at the program’s final stage in the city of Kassel. Open World has long maintained a creative relationship with a local school, the Heinrich-Schütz-Schule. Project participants and their Kassel peers attended three days of workshops, culminating in an entertaining show entitled Live Your Own Fairy Tale, staged in the school’s concert hall. This performance attracted a full house as usual, with young talents drawing rapturous applause from the audience.

In each city, project participants had the opportunity to become involved in an extensive program of educational excursions, interact with their peers, and gather a multitude of new impressions and memorable meetings.

The project’s long-time benefactors – Gazprom Export and its German partners, Gazprom Germania, Verbundnetz Gas AG, and WINGAS GmbH – are delighted to be able to offer children an opportunity for creative interaction, self-expression, developing friendships and knowledge of the world.

The tour of Germany is part of the international charity project Open World, run by Austrian nonprofit organization Energy for Life Social Foundation.




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Documents

Blue Fuel Newsletter | November 2014 | Vol. 7 | Issue 4