How to attract funds for storage
investments?
Andrea Stegher
GSE Vice-President &
Chairman of Security of Supply and Investment WG
GIE Annual Conference 2008
Bucharest, 24 October 2008
Agenda
• The GSE Investment Database: updated figures
• Financing storage projects
• The financial crisis and possible impacts on storage
developments
• How to attract funds for storage investments
• Conclusions
The GSE Investments Database
• Database of EU storage investments was launched in July 2007:
– Publicly available information
– Projects divided into 3 categories: planned, committed and under
construction
– Updated regularly
– From an initial 30 bcm WG capacity increase to 2015 (July 2007) to around
60 bcm (October 2008)
– Grand total of around 110 projects
• “Independents”/new players are increasing their role: 25% of projects and 30% of
planned new capacity (~ 19 bcm)
• A powerful and transparent instrument to evaluate storage supply
perspectives.
Storage Investments: GSE internal survey
• Results of a 2006 internal survey conducted among GSE members
showed that nearly all respondents were satisfied or very satisfied with
financing the investment
Overall importance and satisfaction ratings
for storage investment
Regulation / Access
Regime
Planning & Consents
Financing the
Investment
0
Not Very
Satisfied /
Important
1
Satisfaction
2
3
Importance
4
5
Very
Satisfied /
Important
Storage investments:
which impacts from the financial crisis
•
Is the 2006 result still true ?
•
Possibly too early to draw conclusions on real consequences, but analysis could
be conducted on two different aspects:
– Direct: restricting financing opportunities for new ventures (addressing
mainly independent players ?)
• Short term impact: delay of planned projects
• Selling development options to “more robust” players
• A possibly “positive” side of the story: reduction in cushion gas prices
– Indirect: revision of gas consumption and storage need estimates
• Long term impact: reassessment of storage future demand
How to attract funds for storage investments
•
Possible title reformulation: “How to keep funds in storage investments”
•
Issue is: how storage is looked at in a more volatile world ?
•
Two features of storage projects could provide the key to making funds
available (on time):
– To serve clients
• New capacities should rely on a solid client base: if product is “right”, investment
should be fine
– To contribute to SOS
• New gas flows come from further away and could be “diverted” (e.g. LNG world
competition)
•
In some areas we could nonetheless see some projects disappear
GSE beliefs for preserving a sound investment
climate for storage
Regulatory framework
…does not
believe in
unnecessary
administrative
& regulatory
burdens
…believes
that binding
regulation,
if implemented,
must remain in
the scope
of GGPSSO
Access and transparency
…reaffirms its
commitment to
the full
implementation
of GGPSSO
…considers
GGPSSO a
guarantee for
equal treatment
of storage users &
positive investment
signals
Market investments
…strives for the
realisation of a
competitive
internal gas
market
…is committed
to promoting
a clear & stable
investment
climate fostering
new ventures
Thank you for your attention !
http://www.gie.eu.com