New conditioning plant paves the way for partnership between municipal utility Stadtwerke Bielefeld and WINGAS

The first cut of the spade: Wolfgang Brinkmann, Chairman of Stadtwerke Bielefeld, and Dr. Gerhard König, Chairman and Executive Director of WINGAS Sales and Marketing Division, today (24 Sept. 2003) made the symbolic first cut of the spade and thus launched construction of new natural gas conditioning plant on the premises of the firm Mitsubishi HiTech Paper GmbH. Construction work is due to be completed by as early as April next year; the plant will then feed natural gas into the Bielefeld grid from the first of October 2004. That will run up costs of around two million Euros of which WINGAS and Stadtwerke Bielefeld each bear 50 per cent. Construction of the plant fulfils the purpose of Stadtwerke Bielefeld to add a third source to its future gas procurement portfolio: in addition to suppliers of many years BEB Erdgas und Erdöl GmbH and RWE Gas (formerly WFG), Stadtwerke have signed a natural gas supply contract with WINGAS.

For Brinkmann, the advantages of the partnership between Stadtwerke and WINGAS are obvious: "We are creating a broader, and therefore more reliable basis for our regional energy supply by taking on board another partner in addition to our suppliers of many years, BEB Erdgas und Erdöl GmbH and RWE Gas. Our customers will be the first to benefit from the new addition, because the WINGAS gas system gives us access in future to international gas spot markets and will enable us to guarantee competitive prices," the Chairman explained. Mr. König also emphasised the advantages of the partnership: "The construction of the natural gas conditioning plant provides us with an excellent opportunity to push back technical boundaries with innovative solutions and to open up new market segments."

Technical solutions were indeed required with regard to the plant's construction, because the natural gas that WINGAS GmbH distributes is highly caloric - so-called H-Gas, which has a high calorific value. Only this gas is traded on international spot markets. Stadtwerke Bielefeld, however, supplies low caloric natural gas - so-calledL-Gas - with a low calorific value. The new conditioning plant now adjusts the high caloric gas to the quality specifications of the L-gas pipeline system of Stadtwerke Bielefeld by adding pressurized air.

"This provides us with natural gas quality which has been adjusted exactly to the requirements of our gas pipeline system," said Brinkmann. The customer will not notice a thing: natural gas can be used in Bielefeld consumption appliances accordingly adjusted without having to install new appliances. It goes without saying that the quality regulations set by the Deutsche Vereinigung des Gas- und Wasserfaches (DVGW is the self-regulating body of the gas and water industry) are rigorously enforced during this process. Invoicing will not be affected either, as the gas consumption measured at the customer's in cubic metres has for years been converted to the actual calorific value in kilowatt hours of the natural gas supplied, thus the actual energy amount is charged.

There were several reasons for choosing of the premises of Mitsubishi HiTech Paper as location for the conditioning plant, which can convert a maximum of 25 000 cubic metres per hour of H-Gas into L-Gas. Firstly, the WINGAS natural gas pipeline system runs directly past the company's site. Another reason was that this pipeline can supply natural gas to the new gas/steam turbine power station which Stadtwerke are building in order to supply the mutual customer Mitsubishi. Furthermore, a pipeline of sufficient dimension leads to the Stadtwerke grid.

On this point Mitsubishi Chairman Udo Wellerdiek had this to say: "We at Mitsubishi HiTech Paper are delighted to be able to provide a favourable location for the gas conditioning plant project. In this way, we are continuing the good energy partner relationship, which was entered into decades ago by the Feldmühle, as it was at that time, and Stadtwerke Bielefeld, and more recently with WINGAS. Another symbol of this partnership is the new power station on our premises by means of which from 2005 Stadtwerke will supply our company in the long term with electricity and heat. WINGAS will supply the natural gas required for this."

How Stadtwerke Bielefeld splits its gas procurement portfolio in future between the individual suppliers is to change in gas business year 2004/2005. The final share of the individual suppliers depends on the procurement of spot volumes of natural gas and the degree to which flexibility of natural gas supply contracts is utilised. After BEB, which remains in terms of volume the main supplier of Stadtwerke, WINGAS and RWE Gas contribute in roughly equal amounts to Bielefeld's natural gas supply.

Relatively short-term natural gas supply contracts have been signed with all three suppliers. This gives Stadtwerke the option in the near future of reshuffling its procurement portfolio in the near future in accordance with changing conditions in the liberalised gas market.

Background: WINGAS GmbH

WINGAS GmbH is a joint venture by Wintershall (65 per cent) and the Russian company OAO Gazprom (35 per cent). The company has been active in gas supply since 1990. Via its pipeline system, now more than 2000 kilometres in length, WINGAS supplies municipal utilities, major industrial organisations, regional gas supply companies and neighbouring countries.

09/24/03

Contact
Wolfgang König
Corporate Communications
Stadtwerke Bielefeld
fon: +49 0521/ 51 4064
wolfgang.koenig@stadtwerke-bielefeld.de

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