1 / 13

EBRD: Financing opportunities for the Associated Petroleum Gas utilization

EBRD: Financing opportunities for the Associated Petroleum Gas utilization. October 2014. EBRD’s economic footprint. Key figures. €90bn invested since 1991 3,944 projects to date in 2013 €38bn portfolio in 2013 86% debt and 14% equity in 2013

brent-leonard
Download Presentation

EBRD: Financing opportunities for the Associated Petroleum Gas utilization

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EBRD: Financing opportunities for the Associated Petroleum Gas utilization October 2014

  2. EBRD’s economic footprint • Key figures • €90bninvested since 1991 • 3,944projectsto date in 2013 • €38bn portfolio in 2013 • 86%debt and 14%equity in 2013 • 79% of portfolio in the private sector in 2013 • €8.5bn invested in 2013 • 392 projects signed in 2013 • AAA/Aaa rated institution

  3. Where do we operate? 38 offices and 34 countries. Half of banking team in the region.

  4. Energy and Natural Resources in EBRDDedicated sector approach and multidisciplinary teams • Key sectors • O&G: Upstream, Downstream, Retail • Power sector • Mining and processing • Our Team • 11 professional bankers focused on Russia and Central Asia • Permanent presence in: Almaty, Astana, London, Moscow • Technical expertise through in-house engineers • Power, petroleum, downstream, mining engineers

  5. Associated Petroleum Gas (APG)and the damage it causes • APG flaring takes place when gas produced in association with crude oil is not used for productive/energy purposes, due to lack of market outlets or for safety reasons • Greenhouse emissions (CO2) followed by APG flaring cause severe environmental damages, and have deep economic impact worldwide • 400 mm tonnes of CO2 releasedto the atmosphere • $30.6 bnworth of natural gas (Methane, CH4) are literally burned • Anticline • Impervious rock

  6. Overview of flaring levels and trendsWorld & CIS AGP volumes flared globally • For the last 20 years approximately 150 bcm of APG have been burned annually across the world • Policies and regulations to tackle the problem in many countries have led to 20% decline in volumes of APG flared since 2005 • The main oil producing countries in CIS flare more than 20 bcm of APG per year with Russia being responsible for the major part of it and having the lowest APG utilization rate • APG flaring remains a significant problem in CIS in light of a forecast 18% oil production increase by 2020 • 20% • Source: GGFR/NOAA APG flaring in CIS • APG flaring in 2012 • APG utilization rate in 2012 • Turkmenistan4% • Azerbaijan5% • Russia 86% • Kazakhstan5% • Total 2012: 20 BCM • Source: (**) Oil production in CIS* (mmbbl / day) • Actual • Forecasts • (*) Russia, Kazakhstan, Azerbaijan and Turkmenistan • (**) Data sources/estimates. Russia: Central Dispatch Office of the Russian Fuel and Energy Industry. Kazakhstan: Ministry of Oil and Gas. Turkmenistan: NOAA/GGFR and Carbon Limits estimates based on IHS data sources. Azerbaijan: BP in Azerbaijan sustainability reports • Source: EIA World Energy Outlook, 2013 Carbon Limits estimates based on different sources

  7. Overview of flaring levels and trends (1/2)Kazakhstan Kazakhstan: Overview of the main flaring areas • Kazakhstan has made significant progress in APG flaring reduction(3 times down) on the back of several proper changes in Subsoil Regulation • However, there maybe underreporting in APG utilization rates by companies if compared with satellite images • 97% of all APG flaring occurs in four zones in the Western and Central Kazakhstan • Source: Ministry of Oil and Gas Kazakhstan: Overview of the main flaring areas Kazakhstan: Underreporting of flare volumes • BCM per year • Source: Ministry of Oil and Gas, satellite estimates from and NOAA/GGFR • Source: Carbon Limits based on NOAA and IHS data

  8. Overview of flaring levels and trends (2/2)Kazakhstan • Investments are still needed to reach 95% APG utilization rate taking into account: • Possible underreporting in APG flaring by companies • A projected steady increase in Kazakhstan’s domestic gas demand – the IEA forecasts an 2.2% average annual growth rate through 2035 • A projected 50% increase in oil production by 2020 • Power generation is a key utilization option for associated gas • More than 2GW of gas-fired installed capacity • More than ¾ of power generation still comes from coal, which is non-environmental-friendly fuel Oil production in Kazakhstan (mmbbl/ day) • Actual • Forecasts • Source: EIA World Energy Outlook Share of gas-fired generation in Kazakhstan • 11% • 34% • 2008 • 2035 • Gas-fired generation • Other generation • Source: http://www.encharter.org/fileadmin/user_upload/Publications/Kazakhstan_ICMS_2013_ENG.pdf

  9. EBRD and Gas Flaring Reduction • Associated Petroleum Gas Flaring Reduction • Part of Sustainable Energy Initiative – a unique business model to finance sustainable energy projects, combining investments with technical assistance and policy dialogue • A comprehensive study performed by the EBRD • Review of current flaring situation in Kazakhstan, Russia, Azerbaijan and Turkmenistan • Analysis of gas utilisation options • Identifying project partners • Develop bankable investment projects • Communication on policy aspects • Energy efficiency and CO2 emissions

  10. EBRD – What Role Can We Play? • ‘Bankable’ transactions attracting other lenders + third party finance • Promoting dialogue amongst Sponsors, Governments, Civil Society • Help organise independent due diligence and in introducing international public procurement principles • Experience in transactions with complicated environmental aspects • Addressing project problems through technical studies such as Oil Refineries Study and APG Flaring Study • Technical co-operation: policy dialogue & finance

  11. EBRD Product Flexibility • Project-based financing to public or privately-owned companies and concessionaries. • Senior, subordinated, convertible. • LT (up to 10y or more) or ST revolving. • Floating / Fixed rates. • Choice of currencies (€, $, KZT). • Possibility to structure A/B financings and syndicate to market • Common stock or preferred • Minority position only (up to 35%) • Mezzanine • Exit: IPO, trade sale or put/call Loans Equity • Partial guarantees • Currency swaps • Bonds • TCs and facilities Other

  12. Blueline (ex Monolit) - AGP processing (Russia) • Client: Blueline (ex. Monolit) a Russian limited liability company, a part of Roza Mira group of companies. Roza Mira is a well-established medium-size independent oil products trading group in Russia • EBRD Finance: $87 million senior project finance loan facility for a defined use of proceeds • Tenor: A-loan: 8 years and B-Loan: 5 years • Objectives: commercial utilization of associated petroleum gas (APG) currently produced and burned on 2 oil fields in the Western Siberia • Syndications/Co-Financing: USD 32 million syndicated as a B-Loan to Unicredit • EBRD added Value: supporting the project addressing gas flaring and environmental improvements and realising the commercial value of APG which would otherwise be burned via producing hydrocarbon products and energy; support of higher standards of transparency and corporate governance conduct

  13. Thank you Contact: Yerlan Ramazanov Principal Banker Astana Business Tower 12 Samal micro district, Astana, 010000, Kazakhstan Tel: +7 7172 580204 (ext. 113) Email: RamazanY@ebrd.com

More Related