Energiser Investments Share Discussion Threads

[waldron] 06/5/2016 05:32

Weekly Overview: Engie, LNG – and Services Merger Off the Menu

This week saw the new CEO of Engie, Isabelle Kocher, present her plan for a new-look French state-run behemoth, ready to take on the challenges of a greener future. The former CFO, she stepped up from deputy to full CEO at the start of this month, replacing CEO Gerard Mestrallet and becoming the first female CEO of a top French firm.

Mestrallet had led Engie/GDF Suez since the 2008 merger between the state-owned utility and Suez, which he had led since 1995. She had been his successor-in-waiting for a year or more.

Given the plan’s references to consultations with staff representatives – and Kocher having already talked of disposals – there could be some big changes in the offing.

The company wants to boost its exposure to renewable energy sources and depend less on thermal energy and mature markets in Europe.

It has not yet gone as far as Germany’s E.ON, another company encumbered with the legacies of the past: hoovering up new production by signing long-term oil indexed gas purchase contracts, chiefly from Russia, left it ill-equipped to deal with the changing landscape.

This strategy had the effect of stifling competition; but it backfired when the eventual arrival of competitive gas supply coincided with collapsing industrial demand. This left Europe’s majors holding out-of-the-money contracts with companies such as Gazprom that they have been struggling to renegotiate for years. Both E.ON subsidiary Uniper and Engie are planning to join Gazprom in building Nord Stream 2.

Commenting on the shake-up of his national champion, Societe Generale’s senior European gas and LNG analyst Thierry Bros told NGE that problems can arise when big, centralised companies go green and hatch plans to build solar electricity schemes in Mozambique or wind farms in Turkey, for example.

E.ON cut itself in two, because it recognised that the same company cannot do both centralised and decentralised electricity, he said. Uniper is the untrendy part of it, embodying the assets that Ruhrgas built up, and the contracts and infrastructure that society needs – for the present decade at least.

E.ON and Engie were among those companies that fiercely resisted unbundling but if they had been made to years ago they would not be here today – they would be like National Grid, Centrica and – until recently – BG, Bros said.

In the late 1990s the former monopoly British Gas voluntarily broke itself up, realising the three activities of upstream production, trade and supply and gas transportation did not belong under one roof. Shareholders were rewarded when it demerged as their combined dividend rose.

The shares in upstream arm, BG, traded at a premium while it was regarded as being best in class; but that did perception did not survive the profit warnings that followed the series of problems a few years ago: cost-overruns in Australia, delays in Brazil and the lack of gas to liquefy and of payment in Egypt. While these were not all its fault, they weakened it, and in the process Shell’s argument for owning it – which never led anywhere hitherto – began to gain credibility.

That $54bn deal, finalised in late February, met all the regulatory requirements and now a wave of asset disposals, including those in the UK North Sea, is in the offing.

BG made a contribution to Shell’s results, especially in the area of LNG, where it now has a larger portfolio of destination-free cargoes for sale than anyone else. LNG sales volumes of 12.29mn mt were up by a quarter year-on-year in Q1 2016, thanks to BG’s assets, while production was up 14%, to 7.04mn metric tons.

The destination-free volume is set to grow as well, with the commissioning phase of the first train of Sabine Pass now effectively over and contractual deliveries starting in earnest. Shell now is one of the buyers, and BG secured the lowest fees as it was Cheniere’s first customer.

Much has been made of the cargoes’ arrival in Europe, although so far six of the seven cargoes have gone elsewhere: Dubai, Brazil, Argentina and India.

The architect of BG’s merchant LNG business, Martin Houston, has since February been in partnership with the architect of Cheniere’s LNG business, Charif Souki, in Tellurian Energy. Until last year, Houston ran Parallax Energy, with funding to develop an LNG business and had been in talks with Cheniere. The two individuals are now seeking to compete with Cheniere in LNG.

Cheniere still has only an interim CEO, following CEO Souki's December 2015 dismissal at the hands of activist shareholder, Carl Icahn. A full-time CEO is expected to be appointed in the coming months, after which the company’s new direction should become clearer. So far, the view has been that it will be a lot more cautious than formerly.
Halliburton-Baker Hughes Deal Squashed

A merger that did not come off was the Halliburton/Baker Hughes tie-up: anti-trust regulators deemed the new company would be too big, and the proposed divestments inadequate to create real competition.

Their customers wrote to regulators to complain that the new company's prices might go up, although it was the fall in the oil price and the subsequent cancelling or reneging on upstream service contracts that has left this sector in such dire straits today.

Baker Hughes CEO Martin Craighead described the attempt as an “extremely complex, global transaction and, ultimately, a solution could not be found to satisfy the antitrust concerns of regulators, both in the US and abroad."

Ratings agency Moody’s might downgrade its ratings for both by early June. It said May 2 that it has reassessed the companies' standalone financial and operating performance in light of the terminated merger and in the context of the very weak oilfield services operating environment.

When the deal was announced Halliburton was the largest, and Baker Hughes the third largest, oil-field services companies.

This leaves Baker Hughes with a $3.5bn break fee, which it might need to shore up its balance sheet, or to help it buy other companies with complementary activities without posing a threat to the rest of the market, such as last year’s Schlumberger-Cameron takeover.



William Powell



Natural Gas Europe welcomes all viewpoints. Should you wish to provide an alternative perspective on the above article, please contact [e-mail]

[sarkasm] 02/5/2016 19:12

Engie SA Told to Change Pricing Policy
May 02, 2016, 12:55:00 PM EDT By Dow Jones Business News



Comment

Shutterstock photo

PARIS—France's antitrust regulator has ordered power utility Engie SA to change its natural gas prices for non- residential customers to better reflect its costs.

Acting on a complaint filed in October by rival Direct Energie, the regulator, Autorité de la Concurrence, said Engie, formerly known as GDF Suez, didn't reflect all its costs in some of the individual offers made to large companies. The company's price policy could threaten to push rivals out of the market, it said.

Even though the probe isn't complete, the regulator said it found enough evidence to force Engie to change its pricing policy immediately.

The investigation shows how the energy market has become complex since the deregulation of electricity and gas distribution over the last decade. The new regulation lets customers decide whether to remain with former monopolies—Engie for natural gas and Electricité de France SA for electricity—or shift to new suppliers.

The government created regulated fees for residential customers for both Engie and EDF that take into account all the costs plus a "reasonable" profit margin.

Direct Energie, a new utility that operates in France, claimed that Engie was able to take advantage of its dominant position and the guaranteed profits on residential customers to make offers to some large non-residential customers which don't reflect costs, with the aim of driving rivals out of the market.

Engie said it has always respected the gas market's rules and insisted the market is already very competitive. The company said it is considering appealing the Autorité de la Concurrence's decision.

Autorité de la Concurrence can eventually decide to fine Engie for abusing its dominant position. Fines for breaching competition rules can total as much as 10% of a company's overall revenue, but are traditionally significantly lower.

Engie faces another investigation on from Autorité de la Concurrence on its practices toward residential customers that has been going on for two years and could lead to a separate fine.

Write to Inti Landauro at [e-mail]


(END) Dow Jones Newswires
05-02-161255ET


Read more:

[the grumpy old men] 02/5/2016 12:59

Monday, 02 May 2016 11:12
Engie predicts return to profit for CCGTs



A carbon tax at €30 could support CCGTs A carbon tax at €30 could support CCGTs

French gas power operator Engie expects CCGT gas power plants may soon become profitable again if French plans for a carbon tax are implemented successfully.

[waldron] 29/4/2016 08:54

PARIS--French power utility Engie SA (ENGI.FR) Friday confirmed its targets for 2016 even as its profitability shrunk in the first quarter, reflecting low commodity prices and a mild winter in Western Europe.

The company, which was formerly known as GDF Suez reiterated it expects a net recurring income--a measure that strips out restructuring costs and other impairments--will be between 2.4 billion euros ($2.74 billion) and EUR2.7 billion in 2016 compared with EUR2.6 billion in 2015.

The company reported earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 1.7% to EUR3.5 billion euros in the three months ended March. Sales over the period fell 14% to EUR18.9 billion. Analysts expected sales of about EUR21.14 billion in the first quarter.

The company attributed the revenue decline to lower oil and gas prices and to the lower demand for gas and electricity in its home country during the winter because of the warmer weather.

Like most of its peers in Europe, the group has suffered from sluggish demand for energy in Western Europe, where growth has been sluggish. At the same time, subsidies for renewable energy have made traditional power plants less profitable. As a result, the company had to close down power plants and write down assets worth billions of dollars over the past years.

The company's management has said it plans to reduce the company's exposure to energy prices by focusing on services and regulated businesses in which long-term contracts insure stable profitability.

Write to Inti Landauro at [e-mail]



(END) Dow Jones Newswires

April 29, 2016 02:33 ET (06:33 GMT)

[la forge] 28/4/2016 21:55

REMI Network
Canadian Facility Management & Design

ENGIE awarded expanded FM contract with DCC
ENGIE
Thursday, April 28, 2016
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ENGIE Services Inc. has announced its contract with Defence Construction Canada (DCC) has been expanded to provide facility management and support services for a range of military buildings. The expanded contract covers several military facilities and naval reserves in the Saguenay, Que. region.

The initial three-year contract commenced in the fourth quarter of 2015 with the option of a two-year extension. It covers all facility management related to daily operations, along with building inspection, maintenance and repair.

ENGIE will also manage and coordinate any additional construction work by having a team on duty 24 hours a day, seven days a week to provide all armouries with emergency response at any time throughout Quebec for services covered by the contract.

“The award of these new facilities is further recognition of our expertise in facility management,” said Pierre Lapointe, ENGIE vice president of operations, in a press release. “The project will benefit from our reputation in the province as well as our vast experience in the field, so we can help our client plan repairs. We are pleased to be working with Defence Construction Canada even further to support our client, the Department of National Defence and the Canadian Armed Forces.”

ENGIE will use its Planon solution in its web call centre to capture real-time data on user service requests for effective budget planning, service quality measurement and ensure documentation of daily management activities.

In addition to providing maintenance of the various sites under the contract, ENGIE will also be carrying out renovations to upgrade the existing infrastructure. This investment under the Federal Infrastructure Investments Program should create positive effects in local communities.

[waldron] 28/4/2016 15:55

ENGIE signs agreement with Antwerp Port Authority regarding alternative energy hub

ENGIE has announced that it has signed a 30-year concession agreement with the Antwerp Port Authority for the development of an alternative energy hub at quays 526 and 528 at the port. The concession will take effect on 1 October 2016, and the hub’s first phase will commence operations by late 2017.

The project will consist of three different parts: an LNG shore-to-ship LNG bunkering station for inland navigation; LNG and CNG filling stations for road transport; and charging stations for electric vehicles. The LNG bunker and filling station will include a standalone unit with permanent storage capacity and a flexible bunkering arm. One or more pumps can be used for the bunkering operation, depending on the volume and size of the connector on the ship’s LNG fuel tank. An LNG feeder ship will utilise the same connection for filling the LNG storage tank. The LNG vehicle filling station will involve one island with two LNG dispensers for trucks, and one island with two CNG dispensers for trucks, cars and buses. The site will also provide diesel, which will be primarily used for dual-fuel trucks. The LNG and CNG road vehicle filling stations will be developed by ENGIE in collaboration with G&V Energy.

The project is a cooperative venture between various subsidiaries of the ENGIE Group. ENGIE LNG Solutions is the concession holder and commercial operator, whilst construction, maintenance and management will be handled by ENGIE Fabricom and ENGIE Cofely, respectively.

Edited from press release by David Rowlands

Published on 28/04/2016

[waldron] 25/4/2016 18:25

​DIVI

ENGIE

05/05/2016

09/05/2016

Solde

0.50€

[ariane] 23/4/2016 08:20

Natural Gas Rises as Traders Expect Glut to Ease
Investors bet producers’ spending cuts and warm weather forecasts will spur a recovery
By Timothy Puko
Updated April 22, 2016 5:15 p.m. ET

Natural gas rose to match a nearly-three-month high Friday--its fifth winning week in the past seven--as investors continued to bet the market would burn off a storage glut.

source WALL STREET JOURNAL

[waldron] 20/4/2016 21:48

Engie to offload Polish coal-fired power plant for $567m
20/04/2016
By Diarmaid Williams
International Digital Editor

Engie has confirmed its wish to sell its Polaniec coal-fired power plant, in a deal reported to be around $567m.

Puls Biznesu newspaper had earlier reported that Engie had put its assets in Poland up for sale, including the 1800 MW coal-fuelled power plant in the south-eastern town of Polaniec.
Polaniec coal-fired power plant
A spokesperson for the French company said Engie had decided at the end of January to invite potential investors to express their interest in the Polaniec power plant assets as part of a strategic review of the firm's holdings.

Engie plans some 10 billion euros worth of asset sales by 2018, including fossil-fuel fired power generating plants, as it refocuses on gas networks, renewables and energy services.

Polaniec constitutes around 5.5 percent of power capacities installed in Poland and is the fifth electricity producer in the country.

[waldron] 20/4/2016 20:33

Germany urges Belgium to shut nuclear reactors temporarily

4 hours ago
From the section Europe

Image copyright EPA
Image caption Belgium aims to extend the life of its ageing reactors until 2025 despite public concerns over defects in some of the reactors' pressure vessels

German Environment Minister Barbara Hendricks has asked Belgium to close two nuclear reactors temporarily because of concerns over safety.

The two ageing Doel 3 and Tihange 2 reactors were taken offline in 2012 when defects were found in the walls of the reactors' pressure vessels.

They were restarted late last year amid concern in the Netherlands and Germany.

Belgium's authorities have rejected the German request, saying there is no need "from a nuclear safety point of view".

Ms Hendricks called for the reactors to be taken offline in response to a report by Germany's independent Reactor Safety Commission.

She said that "on the one hand [the report] says there are no concrete indications that the reactor pressure vessels will not resist the strain; but on the other hand they say you cannot, according to today's knowledge, be sure that they'll resist every possible strain. And that's why we need further investigation."
'Surprise'

Germany aims to turn off all its nuclear reactors by 2022 and there are particular worries in the south-west of the country about the safety of Belgium's Tihange plant, some 60km (38 miles) from the German border.

Two states, North Rhine-Westphalia and Rhineland Palatinate, have said they will take legal action against Belgian plans to extend the life of the two reactors until 2025.

Dutch politicians have also expressed concerns about the safety of the Doel plant, which was opened close to the border in the mid-1970s and has four ageing reactors. Its oldest reactor was briefly taken offline last week.

But Belgium's Federal Agency for Nuclear Control (FANC) reacted to Ms Hendricks's request with surprise.

The agency said a fortnight ago it had met German experts who had not raised any new issues. It said it was still convinced there was "no need to shut down these units" and its conclusions had not changed.
Belgium's nuclear difficulties

Belgium has two nuclear plants at Doel, near the port of Antwerp, and at Tihange near Liege
They have a total of seven reactors, which produce around 60% of the country's energy needs

Belgium's ageing reactors worry its neighbours

One of Doel's four reactors, Doel 4, was hit by an unresolved case of sabotage
Doel 3, was shut down for 21 months after the discovery of micro-cracks in the reactor's pressure vessels
A few days after being restarted, Doel 3 was shut down again on 31 December 2015 after a water leak was found
At Tihange, a fire started in the electricity supply system on 27 December
Micro-cracks were also found in the pressure vessels of a Tihange reactor

[the grumpy old men] 19/4/2016 15:52

Engie Signs Egypt Agreements

French utility giant Engie said it executed a cooperation agreement on LNG imports into Egypt with Egyptian state gas company Egas.

The agreement was one of two energy agreements signed on April 18 by Engie deputy CEO and chief operating officer Isabelle Kocher during a state visit to Egypt by French President Francois Hollande. There was no mention by Engie of how much LNG might be supplied by it to Egypt.

Egypt began importing LNG for the first time in 2015, when its total imports were 2.6 million metric tons - of which half from Qatar.

France's Engie in fact has a current long-term agreement to import 3.6 million metric tons/yr from Egypt from 2005 to 2025 on a free-on-board basis from the BG-Shell-run Egyptian LNG export plant at Idku. However because no feed gas was available to either of Egypt's two export plants, no LNG at all was exported by Egypt during 2015, and consequently Engie was unable to lift any cargoes from Egypt.

The other agreement signed by Kocher was for financing and development by Engie of two 50 MW solar photovoltaic projects and two same-sized wind projects. They form part of the Egyptian government's ambition to increase the share of renewables in Egypt's energy mix to 20% by 2022.

Engie is already developing, with partners Orascom and Toyota Tsusho, a 250 MW build-own-operate wind project in the Gulf of Suez. The French firm says it is also keen to develop its energy services activities in Egypt and participate in the country's 'sustainable cities' programme.



Mark Smedley



Natural Gas Europe welcomes all viewpoints. Should you wish to provide an alternative perspective on the above article, please contact [e-mail]

[ariane] 15/4/2016 20:00

At 8:00.
29
Apr
2016

Publication of 1st quarter 2016 financial information
03
May
2016

Shareholders’ meeting

[ariane] 15/4/2016 19:59

03/05/16 | 14:30 Assemblée extraordinaire