Another chapter in the success story begins:

WINGAS opens up markets in Europe

Against the background of progressively more liberalised European markets, WINGAS is decisively writing the next chapter in its ongoing success story which has now run for more than 10 years: the German-Russian joint venture is expanding its activities beyond the borders of its home market of Germany at an increased rate to include other European markets. As early as last year, WINGAS concluded a framework agreement with Gazexport, a subsidiary of the Russian Gazprom, for the purpose of marketing Russian natural gas in the trading hubes (marketplaces) of Belgium and the United Kingdom. In addition the company has also signed supply contracts with customers from Belgian industry and since the beginning of this year has been supplying the first major customers in Belgium. Dr. Rainer Seele, WINGAS chairman, announced his company's entry in the medium term to the British market as well. "Our competitive advantage is that we have learned to be protagonists in a competitive environment. And we have succeeded in applying our experience from the German market to neighbouring European markets", said Seele.

With a volume of 81 billion kWh, WINGAS sold 22 % more in the first half of the year compared with the same period of the previous year (67 billion kWh). The increase was due, said Seele, firstly to an increase in the supply to new customers in Germany and the Europe-wide expansion of the company, and secondly to the low temperatures during the last winter half-year. Despite a stagnating German market, last year WINGAS already succeeded in further increasing its market share and in increasing the sales volume of natural gas for 2002 by 9 % in comparison with the previous year, to 131.1 (2001: 120.7) billion kilowatt hours.

The largest natural gas producer in the world, the Russian company Gazprom, and BASF subsidiary Wintershall joined forces 13 years ago to market natural gas. WIEH (Wintershall Erdgas Handelshaus GmbH) and WIEE (Wintershall Erdgas Handelshaus Zug AG) are two more joint ventures. The natural gas trading business has developed very successfully in the past: natural gas trading operations and the marketing of storage and transportation capacities account for roughly a quarter of the entire Wintershall operating result (2002: 1.2 billion Euros).

Gazprom is the most important supplier of WINGAS. "Many years of supplying Russian gas to Germany are characterised by a high degree of reliability and security", explained Seele. These volumes are supplemented mainly by natural gas supplies from the North Sea, whereby WINGAS also takes additional advantage of procurement opportunities provided by spot markets. For this purpose in March of this year WINGAS also acquired a 25 % share in HubCo-North West European Hub Service Company GmbH, the operating company of a natural gas trading hub in the North German region of Bunde/Emden.

The partners Wintershall and Gazprom have invested to date a total of 2.7 billion Euros in building up the WINGAS natural gas pipeline system. The pipeline network has exceeded the mark of 2000 kilometres in length. It connects the major gas reserves of Siberia with the growing sales markets in Western Europe and additionally enables WINGAS access to the further developing European spot markets. With the natural gas storage plant at Rehden, which possesses a working gas volume of over four billion cubic metres, WINGAS has at its disposal over a fifth of the entire storage capacity available in Germany. For the purposes of optimising its system, WINGAS is currently planning the construction of a 500-kilometre Southern German natural gas pipeline: SEL (Süddeutsche Erdgasleitung), from south of Lampertheim all the way to Burghausen on the German-Austrian border. This project is at the same time the largest current investment for WINGAS, at a sum of several hundred million euros. "Pipeline construction and third-party access are independent, necessary instruments in the complete liberalisation of the natural gas market. Even the most efficient third-party access management cannot replace free pipeline construction", emphasised Seele. This applied, he said, particularly in those regions of Europe where high growth rates in natural gas consumption are expected. "Investments in adjusting transportation capacities for increasing natural gas demand will in future be of decisive importance in ensuring long-term security of natural gas supply in Western Europe."

P-6b - 08/26/03

Contact
Michael Sasse
fon: +49 561 301-3301
fax: +49 561 301-1321
press@wingas.de

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