Gas Value Chain

Exploration & Production

In E&P, we are specialising on evaluation of relevant cost & revenue elements as well as on various types of in-built risks. Typical projects are not only related to direct project risk & return, but to actual total risk including political & economic risks.

Trading

Similar to power trading, we are both doing strategic & operative projects in this segment. Strategic projects include Risk & Return analysis, opportunistic trading & particularly spark spread optimisation for integrated utilities.

Similar to power, on the operative side, we are co-operating with a number of software providers, both ETRM providers and electronic confirmation matching (ECM) providers. Typical projects include initial analysis of existing workflow management in energy trading rooms. This is then followed by detailed concepts on both organisational optimisation & potential workflow automation. Depending on the specific focus & trading volume of the respective client company, suggestions are presented & realised whereever requested.

Transmission & Storage

This sector has frequently been nearly top of the agenda of international decision makers. Consequently, our work in this area has a significant political aspect. But also under ‘normal’ delivery conditions, major gas pipelines produce ongoing debates & challenges for both pipeline operators & regulatory bodies. E.g., we are involved in projects that produce acceptable grid access outcomes for both parties. Coming from another angle, we are also frequently researching & realising new transport routes (as well as new markets) for exporters.

Distribution

Commercially successful extension and management of gas distribution grids is becoming more and more difficult for modern regulated gas utilities. The challenge basically lies in the complete reversal of past business practice, where pipelines and energy costs were lumped together and together covered full costs of the gas utility. Separation of these cost items – as required in most liberalised markets – forces gas utilities to think twice about ongoing extension and increase of grid density.

The economics of gas distribution is somewhat different to power distribution, as power lines are – at least to some extent – currently still indispensable for commercial & private consumers, whereas gas delivery is only demanded at the right price vis-a-vis competing fuels (eg. district heating, oil, biomass).

Retail

Because of complex delivery terms, new entrants in the gas retail market normally acquire (parts of) incumbents. But even existing suppliers need to carefully choose potential new customers as – different to power – relevant gas volumes are only supplied by a handful of producers. These producers face the difficulty of huge up-front investments covering exploration of and production from new fields, they therefore require some security in the form of long-term contracts.

The EU however sees these longterm contracts as a somewhat questionable practice to secure production volume, all these positions result in a challenging goal conflict.