Retail therapy - Gazprom Marketing and Trading

ISSUE 5 THE MAGAZINE FOR GM&T CUSTOMERS
Retail therapy
The power behind
Britain’s biggest high
street names
GM&T ISSUE 5
IN THIS ISSUE
The Energy
Event 2011 was
attended by
3,500 visitors
Page 21
The energy
industry
contributes £28
billion to the UK
economy Page7
you’ll discover that...
In its first year of
operations, GM&T
Singapore had a
turnover of US$651m
Page 8
The fashion brand
Dorothy Perkins
takes its name
from a classic
rambling rose
Page13
Gazprom is ranked 15th in
Forbes’s Global 2000 list of
the world’s largest public
companies Page 4
In 2011GM&T Retail celebrated
its fifth anniversary by
changing its name to
Gazprom Energy Page10
LNG is created by cooling natural
gas to -160° Celsius Page14
2
GM&T—ISSUE 5
Ewa Hemmerling, Global External Communications advisor
from the editor
Gazprom Energy
ended the year on a
high with recognition
of our dedication to
exceptional customer
service at the Energy
Excellence Awards
Welcome to the December 2011 edition
of GM&T magazine. It’s the time of year
when we look back at the past year and
reflect on how we did against our
targets, goals and expectations. So,
what has this year been like for GM&T
and how did we do?
The last year saw GM&T grow, not
only in terms of annual turnover and
staff numbers, but also in terms of
markets entered, numbers of energy
products and sites supplied.
In August, GM&T’s retail supply
business, “Gazprom Energy”,
celebrated its 5th anniversary as a
wholly-owned Gazprom company.
Since its beginnings, the company has
undergone many changes as it has
grown and developed and is now one
of the UK’s most successful regional
downstream/retail energy
companies. Under its new name and
with a brand new identity, Gazprom
Energy ends the year on a high note
after winning the Energy Supplier of
the Year award at the Energy
Excellence Awards, fitting recognition
for our dedication to delivering
exceptional customer service.
Our Asia-Pacific business has also
gone from strength to strength.
During 2011, GM&T Singapore signed
agreements for 80 carbon projects and,
as our strategy for growth promised,
we have delivered GM&T’s first
physical cargoes of crude and LPG.
The company’s successful growth
was reflected in its move into brand
new offices in October this year. This is
yet another magnificent declaration of
our confidence in the global energy
markets and offers a clear statement
about our future ambition.
That ambition is also revealed by a
series of extremely successful
acquisitions, including a 100 per cent
stake in German retail power
company Envacom that provides the
springboard for a new entity,
Gazprom Marketing & Trading Retail
Germania GmbH, to supply SMEs and
large industrial customers in
Germany.
Meanwhile, the acquisition of
UK-based Cyclo Systems International
and its sophisticated set of energy
management products and services is
proof of our commitment to
innovation and excellence in our
practices and solutions.
But we wouldn’t have been able to
achieve all of this without our
customers, counterparties, our parent
company and of course our people. So
we would like to say thank you to all
those who have put their trust in us
and supported us throughout this
year. We promise this is only the
beginning and we will work hard to
deliver our promises in meeting your
goals. Last but not least, we would
like to take this opportunity to wish
you all a Merry Christmas and Happy
New Year.
GM&T—ISSUE 5
3
INDUSTRY NEWS FROM GM&T
Pipeline
Germany deal
Gazprom Marketing & Trading has
acquired a 100 per cent stake in German
retail power company Envacom
Service GmbH. The new entity,
Gazprom Marketing & Trading Retail
Germania GmbH, will be part
of the UK-based Gazprom Energy
retail brand.
Envacom currently sells power
mainly to domestic customers, but
Gazprom Energy in Germany will
follow the UK business model by
focussing on SMEs and large industrial
customers.
The new Managing Director
of Gazprom Energy in Germany,
Jozua Knol, said: “The acquisition
is a significant step in our strategy
to accelerate growth in our power
business. We look forward to
providing security for existing staff
and customers, creating new jobs and
promoting competition within the
German power market.”
Jon Feingold, Gazprom Energy’s MD,
said: “Germany is one of the largest
and most liquid energy markets in
Europe. We’re confident we can grow
market share and our business in
Germany by implementing the same
model that has seen significant success
in the British, Irish, French and more
recently Dutch
commercial sectors.”
They said it
What people have been
saying about energy
recently
Mark Eccles,
Head of Gas for
Gazprom Energy
Industry honour
Gazprom Energy won the Supplier of
the Year category at the Energy ‘Buying
& Supplying’ Excellence Awards at the
May Fair Hotel in London last month.
The awards were linked to The Energy
Lectures London at the Institute of
Contemporary Arts.
Jon Feingold, Managing Director,
Gazprom Energy, said: “This is a
tremendous achievement and a
significant honour within the industry.
Our entry was based on positive
testimonials from our customers.
Our team make the business what it
is and work hard to ensure we reach our
goals and satisfy our customers.”
l Gazprom Energy has also been
shortlisted for the Supplier of the
Year award at the Energy Awards in
December and Gazprom Global Energy
Solutions (GGES) is in the running for
Energy Efficient Product of the Year.
Top of the league
Twenty-two organisations including Gazprom Energy and Gazprom
Global Energy Solutions customers UBS and Manchester United FC
topped the UK Environment Agency’s first Performance
League Table for organisations managing their energy
efficiency via the Carbon Reduction Commitment scheme.
Other Gazprom customers in the PLT were Bristol
City Council, University of Birmingham
and PricewaterhouseCoopers.
4
GM&T—ISSUE 5
“It is not fair that big energy
companies can push their prices
up for the vast majority of their
consumers – who do not switch –
while introducing cut-throat offers
for new customers that stop small
firms entering the market. That
looks to me like predatory pricing.
It must and will stop.”
UK Energy Secretary
Chris Huhne
“The unmistakable lesson from
the effect of emissions reduction
policies, 1997-2010, is that policies
tend to have a lower impact
than forecast, and therefore their
strength needs to be increased if
targets are to be achieved.”
UCL Energy Institute Professor
Paul Ekins, consultant to
Cambridge Econometrics, which
says the UK is set to miss its legally
binding climate change targets
“The improved financial
performance of companies with
high carbon performance is a
clear indicator that it makes good
business sense to manage and
reduce carbon emissions.”
Paul Simpson, Chief Executive,
Carbon Disclosure Project
India is
a key
market
for LNG
New deals
Gazprom Global LNG is aiming to
strengthen supplies to India after
its GM&T Singapore affiliate signed
memorandums of understanding
with GAIL (India) Limited, Gujarat
State Petroleum Company and
Petronet LNG. One of the key
markets for LNG supplies, India also
offers significant gas, power and
downstream opportunities.
Z-Lynk, a sophisticated set of
energy management products and
services already used by the City of
London to control public lighting and
heating is to be offered to customers
of Gazprom Global Energy Solutions
(GGES).
GGES has acquired UK technology
provider Cyclo Systems International,
whose Z-Lynk turns existing power
lines into ‘smart grids’ providing real
time energy monitoring. Roll out will
begin in the UK, Europe and AsiaPacific.
GM&T USA has agreed a 23-year
contract as sole supplier to Associated
Electric Cooperative Inc’s St. Francis
power facility in Glennonville,
Missouri, which consumes up to 86
million cubic feet of natural gas per
day at peak capacity. GM&T USA’s
MD John Hattenberger said:
“We see natural-gas fired
peak demand plants as
an important growth
opportunity.”
Q2 sales boost
Gazprom’s 2011 Quarter 2/H1 IFRS
results saw total gas sales increase
by 37 per cent on the corresponding
period in 2010 despite the usual
seasonal downturn. The results
exceeded analyst expectations,
reflecting stronger global demand for
natural gas and Gazprom’s role as a
leading reliable and secure supplier to
global markets.
Headline figures (in millions of
Russian Roubles and US Dollars):
l Net sales (including gas, oil,
electricity and heat): RR 2,347,071/
US$ 82,180 – up 37% on the same
period of the prior year
l Profit before tax: RR 973,982/
US$ 34,103 – up 52% compared to the
same period of the prior year
l Profit for the period attributable to
the owners of OAO Gazprom
(after profit tax): RR 771,669/
US$ 27,019 – up 56% compared to
the same period of the prior year
l Decrease in net debt of 17%,
down to RR 811,609
Green deal hope
The UK’s Energy Act became law in October with
DECC preparing to launch its ‘Green Deal’ next autumn.
More than half of UK homes have insufficient insulation and around
50 per cent more energy is used to heat and power them
than to power UK industry. DECC expects to attract
capital investment of up to £15bn pounds in the
residential sector by the end
of the decade.
GM&T—ISSUE 5
5
Pipeline
A class of
their own
The toast was to future tanker
captains when the new GM&T
sponsored Tanker Operations
Classroom was officially opened at
the Admiral Makarov State Maritime
Academy in St Petersburg on Friday
16 September.
The grand opening was attended by
representatives of the Russian Ministry
of Transport, the port of St Petersburg
and shipping companies.
GM&T’s partnership with the
Academy aims to contribute positively
to developing world-class shipping
experts.
“It will provide the cadets with a solid
theoretical base that will complement
their practical training at sea,” said
Nikolai Grigoriev, GM&T’s Director of
Global Shipping and Logistics. “We
hope in future to see the cadets who
started their training in this classroom
as captains of the oil and liquefied gas
tankers serving the trading and export
needs of the Gazprom group.”
Plans are in place to support the
creation in the Academy of a more
substantial Marine Technical Centre
for future marine engineers and
electrical engineers.
MAJOR
CONTRIBUTION
The energy sector generated 45,000 new job opportunities
between 2008 and 2010, according to a report by Ernst & Young
that said the industry contributes £28 billion to the
UK economy.Last year, the report added, the UK’s power
and gas sector had a turnover of £88bn.
We will Endur
Gazprom has introduced an industry
leading solution to enable round theclock trading across the globe for oil,
FX, coal and gas and to facilitate a much
faster response to changing market
conditions.
Efficient and scalable, the Endur
platform allows for better decision
making through more timely and
accurate reporting; improves efficiency
in capturing, confirming and settling
deals, and reduces operational risk
through better reporting tools. Endur
will play a leading role in Gazprom’s
future growth.
They said it
What people have been saying
about energy recently
“Australia’s decision to put
a price on carbon emissions
is an important step, both
environmentally and economically,
because in our European experience
it is the most cost-efficient way to
reduce emissions and also a great,
green business opportunity.”
European Commission President
Jose Manuel Barroso
“IATA is not opposed to emissions
trading… but the EU’s unilateral
and regional approach to ETS
could not be more misguided.”
Tony Tyler, Director General and
CEO, IATA
“Will a vast gas field turn
Blackpool into the Dallas of the
North? Or will tapping into
this precious resource cause
earthquakes and poison the
water in your tap?”
Daily Mail headline,
September 2011
6
GM&T—ISSUE 5
UK domestic gas prices increased by
an average of 17.4 per cent in the latest
round of price rises. Electricity costs
an average 10.8 per cent more. The
average annual standard bill now costs
£1,322.
Energy regulator Ofgem’s two-year
smart meter trial in 18,000 homes found
participating households used 3 per
cent less energy than before the meter.
The UK government plans to install smart
meters in every UK home and small
business between 2014 and 2019.
Finance Intern Alex
Lawson, who is on
the Year in Industry
programme, at
Gazprom Energy’s
stand at Manchester
Metropolitan
University careers fair
Bright futures
Gazprom Energy is preparing for
the 2012 intake of its Year in Industry
scheme. After the success of last year’s
programme, up to seven students
will be offered a paid 12-month work
placement in a department relating to
their degree. Students are currently
working in IT, Finance and Marketing
at the Manchester head office. In 2012,
students will also be able to apply for a
placement in the Trading team.
Year in Industry gives students the
chance to apply the theory learned at
university on live projects and make
a real contribution to the business.
Gazprom Energy can develop talent
and future business leaders who can
come back after graduating.
The company has changed apprentice
providers to Manchester-based
Apprentice Academy, who source
candidates with the qualities to
become permanent team members
and enjoy exciting futures with a
global business. Since the first
apprentice was recruited in
July 2009 a further ten have
joined in areas such as
Sales, Finance and
Billing.
Top ranking
Gazprom is ranked 15th in Forbes
magazine’s latest Global 2000 list of
the world’s biggest public companies.
Gazprom was also rated third in terms
of profit, which was $25.72billion.
Forbes creates four separate lists of
the 2000 biggest companies rated on
the basis of four metrics; sales, profits,
assets and market value based on the
latest available financial data. Each list
has a minimum cut off value in order
for a company to qualify. A company
needs to be eligible for at least one of
the lists in order to be eligible for the
final Global 2000 ranking.
Forbes compiles its list by screening
data from Thompson Reuters
Fundamentals and Wordscope
databases via FactSet Research
Systems for companies that were
publicly trading as of
March 11, 2011.
Cuadrilla Resources estimates
that 200 trillion cubic feet of
shale gas lies in an area around
the Lancashire seaside town
of Blackpool, nearly 40 times
previous projections for all
Britain’s shale resources.
GAZOMETER
Facts and figures from
around the energy sector
Hurricane Irene knocked
out power to 6.69
million US homes and
businesses when it
hit the east coast at
the end of August. It
also contributed to a
5.9% fall in US gasoline
consumption for that
week.
Total indigenous UK production of
natural gas in the second quarter of 2011
was a record 24.8 per cent lower than
in the corresponding quarter of 2010,
according to the Office for National
Statistics. Oil production in UK waters
was down by 16%. This was partly
attributed to planned maintenance
as well as emptying oil reservoirs,
says the Department of Energy and
Climate Change.
UK government HQs at Whitehall
cut carbon emissions in one
year by an average of
13.8%. DECC led the way
with cuts of more
than 20%.
GM&T—ISSUE 5
7
OFFICE PROFILE SINGAPORE
When did GM&T first open an office in
Singapore and what have been the
main achievements since then?
Singapore opened in March 2010 with
three ex-pats from London, initially
concentrating on LNG sales from our
Sakhalin facility to the traditional
buyers in Japan and Korea. The
LNG business has expanded far
beyond the original set of customers
and we’ve developed a portfolio
of supply options. We have traded
GM&T’s first physical oil and LPG
cargoes and developed the carbon
business exponentially in a time
of great uncertainty resulting in
significant profit for GM&T group
and because of our location, a
reduction in the group’s tax burden.
We have proven global capability.
This success is due to the efforts and
teamwork of a large number of people
in London and Houston as well as
the Singapore team.
in London, the move was seamless.
We occupy almost 20,000 square feet
on the 41st floor of one of the most
environmentally advanced buildings
in Singapore, if not Asia Pacific.
What are your plans for expansion?
The trading floor forms a hub that can
house up to 20 traders specialising in
crude oil, LPG, LNG and FX, while
the Clean Energy, Shipping, Finance,
IT, Legal, Human Resources and
PA team surround this area. There’s
space for 135 people, and I anticipate
expanding into it as we develop our
presence but that may take a couple
of years.
How is the South East Asian energy
market structured?
Asia Pacific is very different from
Europe or the Americas. It is in
essence a collection of dissimilar and
disconnected markets from energy
rich Australia and rapidly growing
How many people work in Singapore
China and India to the lands of
and which territories do they serve?
imminent potential such as Thailand
The office has 52 people covering
and Indonesia, the desperately poor,
most support functions, LNG sales
such as Bangladesh and of course
and shipping, carbon origination
strong and stable Singapore.
and biomass trading, oil, FX and LPG
The emerging markets are
trading and an exploratory start to
becoming hungrier consumers. Many
marketing AMR (Automated Meter
countries that historically exported
Reading). We sell products to 17
gas, or were at least self-sufficient, are
different countries and have sourced
now starting to import as demand
gas from Australia, Nigeria, Egypt, the outstrips supply. China’s natural
Middle East as well as Russia.
gas imports more than doubled in
the first quarter of this year, due to
How is the company settling in to its
higher domestic demand. India also
new state-of-the-art offices?
faces an increasing gas shortfall. We
Moving to the Ocean Financial Centre see India as a key market for LNG,
with its spectacular 360 degree views along with Japan and other north
of Singapore was a milestone for a
Asian countries. We recently signed
young office. It shows that Gazprom
preliminary deals with Indian energy
is in Asia for the long term and will
users, GAIL, Gujarat State Petroleum
Company and Petronet to supply up
invest and grow in the coming
to 7.5 metric tonnes of gas a year from
years. Thanks to excellent planning,
Russia’s LNG projects.
especially by the IT guys here and
Singapore
sling
Arthur Tait, Managing Director of
GM&T Singapore, talks about the Asian
market and his ambitions for the region
8
GM&T—ISSUE 5
Above: Ocean
Financial Centre
is one of the most
environmentally
advanced
buildings in Asia
Right: Arthur Tait
says Gazprom
is in Asia for the
long term
How does it compare to European
markets, can you use the same
business models?
There is no pipeline access to
Russian gas, little liberalisation
of markets, and some political
instability, but there are levels of
growth long forgotten in Europe
and a very strong demand for more
energy. The business model is a
little different, but our adherence to
the same stringent risk models and
governance procedures as adopted
and developed in Europe is crucial.
Who are your main customers and
what services are they looking for?
In the last 12 months, we have traded
LNG with customers in Japan, China,
Korea, Taiwan, India, Malaysia,
Oman and Abu Dhabi, most of which
GM&T had no relationship with
before we set up here. A competitive
price is always important, but much
of our success has been due to our
ability to respond to customers’
requirements and special needs.
There’s no better example of this than
being the first supplier to deliver an
additional cargo to Japan following
the terrible earthquake earlier this
year. It was an immense team effort
between our shipping and LNG
trading departments. The special
relationship we have developed
with our colleagues in Sakhalin was
absolutely crucial.
What effect is the global economic
crisis having on the region?
At the moment it’s a sellers’ market,
but it’s incredibly dynamic with
new terminals and supply sources
entering the mix on a regular basis.
We have some very strong
competitors, but with our
renowned service and fast moving
entrepreneurial flair we are focussed
on the strongest markets and most
robust counterparties. While our
competitors are more often than not
the same as in Europe, our customers
are often names which may not be
familiar, but are as financially sound
as any in Europe or the USA. Asia
Pacific has in general dealt with the
global economic crisis well, but does
not operate in isolation. Much of
China and India’s output, and
Japan’s car production heads to
western markets. Asia’s strong
banks have a considerable exposure
to European debt, so there is some
caution, illustrated by a slowing
down of most Asian economies.
They are, however, still showing
positive growth with little likelihood
of slipping back into recession.
The Energy market remains overall
quite buoyant.
NORTH KOREA
SOUTH KOREA
CHINA
Abu Dhabi
U.A.E.
INDIA
JAPAN
BANGLADESH
TAIWAN
MALAYSIA
GAZPROM
OFFICE
Left: The Singapore
operation sells
products
to 17 countries
GM&T—ISSUE 5
9
GAZPROM ENERGY’s 5th birthday
How we’ve
grown
GM&T Retail recently
celebrated its fifth birthday,
most notably with a rebrand
and a new name – Gazprom
Energy. The company
has come a long way in
five years and this is an
opportunity to chart some
important milestones and
look forward to the next
five years…
2006–2007
Gazprom enters the UK’s energy retail
market by buying Cheshire-based
Pennine Natural Gas. Launching as
Gazprom Marketing & Trading Retail
(GM&T Retail) with a staff of 10, the
fledgling company serves 7,048 sites
with 0.1 BCM of gas.
2007–2008
GM&T Retail acquires a stake in
Automated Meter Reading (AMR)
provider TruRead and signs up to
supply its first major football clubs,
including Chelsea FC. Staff numbers
grow to 14 and 0.4 BCM of gas is
supplied to 11,763 sites.
2008–2009
The number of staff more than doubles
to 29 and the company moves to
new offices, in the Bauhaus building
in central Manchester. Gas supply
increases to 1.8 BCM serving 16,507
sites. This is also the year of the first
gas customer in Ireland and the first
carbon customer.
2009–2010
GM&T Retail enters the UK power
market, generating 0.2 TWh to 3,387
sites, and creates Gazprom Global
Energy Solutions (GGES) to offer
customers end-to-end solutions for
all smart metering applications.
The company has grown to 88
staff supplying 3.5 BCM of gas to
23,344 sites.
2010–2011
Gazprom Energy was launched on 12
September 2011. A new name and a
new brand identity for a company of
145 staff serving 30,706 gas sites with
3.4 BCM and 6,388 sites with 1.5 TWh.
Gazprom enters the German power
market after acquiring a domestic
power supplier based in Walluf.
The company also wins its first gas
customer in the Netherlands as well as
the Energy Supplier of the Year title at
the Energy Excellence Awards.
the next five years
Under its new name, Gazprom Energy
aims to grow faster in the next five
years than ever before. The target
is more than 100,000 gas sites and
200,000 power sites. Staff numbers
are predicted to double again to 300 as
power supply rises to 15 TWh and gas
supply to more than 20 BCM.
10
GM&T—ISSUE 5
GAZPROM ENERGY HOLLAND
Let’s go Dutch
Gazprom Energy is continuing its expansion into new European
markets by opening an office in Holland
With its first sales agreed and supplies
due to commence from 1 January 2012,
Gazprom Energy is all set to start its
operation in Holland, the latest stage
in its drive to enter new markets and
diversify its product offering.
Preparations to become
operational in the Dutch energy
market have been progressing
steadily over the last six months with
the launch of the new business being
overseen by Sytse van Heijst and
Manfred Bartels, both experts in the
Benelux energy markets. Manfred
and Sytse are teaming up to form
Gazprom Energy’s new Benelux front
office. This will be based in the Dutch
city of ‘s-Hertogenbosch, located in
the heart of Holland. The city already
hosts the Dutch headquarters of both
RWE/Essent and Dong Energy.
Setting up Gazprom Energy was
a natural step for GM&T, as the new
Dutch office follows in the footsteps
of offices in the UK, France and more
recently Germany in offering the
best customer service and flexible
products to help them meet their
goals.
“The first task was to prepare
a business plan and become
operationally ready in the Dutch
market,” says Sytse. “A major
milestone came on 1 July 2011 when
the country’s energy regulator
awarded us a Dutch Gas supply
licence. This is the first time that a
non-Dutch legal entity has been
granted an energy supply licence.”
That was followed by the grant of
a full shipping licence for gas by the
Dutch national gas transportation
authority in October, which means
Gazprom Energy is allowed to
supply and ship gas to every
individual meter in Holland.
Supplying energy to Belgian
customers is expected to start in
2013 when the regulatory conditions
become more favourable to new
entrants. Again the initial first focus
will be on supplying gas to the
small and medium enterprises
(SME) market.
“We’ve been busy setting up all the
necessary back-office applications
and have developed a front-office
application which allows us to make
offers to (multi-site) customers in
a practical and efficient way,” says
Manfred. “The initial focus in Holland
is to supply SMEs with gas at a fixed
price or at prices related to the APXEndex market, the energy exchange
that operates spot and futures
markets for electricity and natural
gas in the Netherlands, the United
Kingdom and Belgium.”
Looking forward, Gazprom Energy
aims to enhance its proposition by
offering power products. It is normal
in Holland for smaller SME customers
to buy gas and power from the same
supplier. “Our preparations are also
geared to being able to start quoting
for gas supplies to the larger business
customer segment, which will include
industrial supplies,” says Sytse.
GM&T—ISSUE 5
11
BRANDING
What was the thinking behind the
rebrand, why change?
Marketing
Executive
Yvonne
Henderson
The new name, identity and website
reflect the growth of the company in
the last five years. After starting out
as a small gas supplier with less than
1,000 customers, we now supply gas
and or power to more than 35,000
sites in the UK, Ireland and France.
Before we grew any bigger and moved
into more markets and countries, we
wanted to ensure that we had a clear,
strong identity that would appeal to a
wider customer base.
How does the new brand reposition
Gazprom Energy in the market?
The name makes us instantly
recognisable as a supplier of
energy products. Gazprom Energy
personifies our values and the people
who are a key part of our service. We
are, and would like to be seen as, a
modern, approachable and reliable
business partner. Rather than just
being a supplier, we’re looking to
build long-lasting relationships with
our customers.
What are the key elements and what
does it say about Gazprom Energy?
Fresh
Energy
Deciding on a new name, identity
and website is not a decision to be
taken lightly. Marketing Executive
Yvonne Henderson explains the
thinking behind repositioning
Gazprom Marketing & Trading
Retail as Gazprom Energy
12
GM&T—ISSUE 5
We’ve made subtle changes to
the logo. The modern blue and
grey shades , along with the blue
illustrations and atmospheric black
and white photography are designed
to emphasise our transparent and
direct approach. The concept is
simplicity and there’s a fun side to
make it stand out from competitors
who generally use a very traditional
and ‘safe’ approach to branding and
communications.
Simplicity and
clarity are the
key elements
of the Gazprom
Energy brand
What are the values that underpin
the rebrand?
Gazprom Energy is a responsive,
helpful, understanding and forwardthinking supplier that offers an
innovative and flexible suite of
products. Our supplies are secure
and our service is transparent and
straight-talking. The brand is also
designed to reflect our internal
values of team spirit, innovation,
outstanding communication and
unstoppable passion for excellence,
growth and learning.
What was behind the decision
to change the name to Gazprom
Energy?
In choosing a new name, we wanted
something that would appeal to our
customers in both the UK and across
the world. We went for ‘energy’
because it’s simple, clear and is
globally understood. It was important
to retain the Gazprom name, which is
very strong, particularly in Europe.
What were the aims for the
corporate website?
We have big plans for our website
and online presence so we needed
a website that would allow us the
flexibility and control to make
on-going improvements. We’ve
started with something reasonably
simple, yet attractive, which we can
continuously grow and develop. As
well as refreshing our UK website,
we’ve added French and Dutch
areas for our customers in France
and the Netherlands. We’ll soon be
integrating a version for our new
customers in Germany too.
What do Gazprom Energy’s customers
think of the new brand? Do they like it?
Feedback after launch at the Energy
Event in September showed that
customers are really impressed with
the new brand. It’s friendly, smart and
clear – just like our people. It has also
helped internally because our staff
can see what the company represents;
it reminds them of our values.
How do you intend to reach your
target audiences and promote the
brand?
The brand has been designed to grow
with the company. It’s flexible, just
like us. We’re working on a number
of marketing and communications
initiatives for 2012 and beyond to
increase awareness both internally
and externally.
GM&T—ISSUE 5
13
customer PROFILE ARCADIA GROUP
Top
of
the
shops
Covering eight
famous fashion
brands, Arcadia
Group has turned to
Gazprom Energy to
provide solutions for
its stores and offices
across the UK
Encompassing some of the most
famous names on the high street,
Arcadia Group’s franchises,
including BHS, Burton, Dorothy
Perkins, Evans, Miss Selfridge, Outfit,
Topshop, Topman and Wallis, are
loved by millions.
High street retailers are an
important barometer of the health of
the economy and energy efficiency
is vital to help some of the nation’s
most popular stores maintain their
competitive edge.
“We chose Gazprom Energy
because of its customer service,
proactive account management and
energy management services,” says
Dean Laurent, Arcadia’s Purchasing
Manager, Sustainable Energy
Management. “Key factors for us are
price and billing, which our accounts
payable teams access via Gazprom
Energy’s online services portal.”
The BHS portfolio comprises
170 sites and Gazprom Energy
has supplied many of these with
both fixed and flexible products.
A large percentage have also been
equipped with automatic meter
readers (AMR), establishing a solid
foundation for Arcadia Group’s
14
GM&T—ISSUE 5
GM&T—ISSUE 5
15
Sir Philip Green with daughter Chloe
long-term commitment to reducing
consumption, cutting CO2 emissions
and mitigating costs.
Earlier this year, Gazprom
Energy and Arcadia agreed a deal to
supply the entire Arcadia portfolio
amounting to a further 110 sites across
the UK on top of the 170 BHS sites.
Arcadia inherited the current
contract when the group took control
of BHS in 2009. “We’ve been with
Gazprom for a few years on the BHS
side,” says Dean.
“We’ve just signed a new deal for
the entire business and I am also
engaged with Gazprom in reviewing
our old fashioned gas oil burner
systems at 13 of our stores. Alongside
that we are also looking at multifunctional meters for our Distribution
Centres.”
Dean says that Gazprom’s services
were superior to those of Arcadia’s
incumbent supplier. “Billing was
very good, again compared to our
incumbent, but pricing was the main
driver as Gazprom was the most
competitive for the period of time
we wanted.”
Arcadia Group was born out of
the old Burton Group in 1997, but
16
GM&T—ISSUE 5
the beginnings of the business can be
traced back to the very beginning of
the 20th century when Lithuanian
émigré entrepreneur Montague
Burton, one of the forefathers of
modern retailing, set up a menswear
business in Chesterfield.
By the time Montague died in 1952,
he had received a knighthood for
services to industrial relations and
built a business that was the largest
multiple tailor in the world.
Today, Arcadia is owned by Taveta,
the investment vehicle owned by
Sir Philip Green and his family. The
group is the UK’s largest privately
owned clothing retailer with more
than 2,500 outlets. It employs more
than 42,000 staff.
“Such a large portfolio means we
have a wide variance of store type,
from very small local high street stores
with a single gas boiler, right up to
multi-floor stores with restaurants
and massive plant rooms,” says Dean.
“We always want to challenge our
energy use both at stores and our head
offices. To help us, Gazprom Energy is
very proactive. I have been impressed
with what has been discussed and
what’s been delivered.”
ARCADIA GROUP
Founded:
1903 as the Cross-Tailoring Company
in Chesterfield. As Burton, it relocated
to Leeds in 1910. Arcadia emerged
from Burton’s demerger and divestment of its department store business
in 1997.
A RESPONSIBLE RETAILER
Arcadia Group is dedicated to responsible retailing through its Fashion
Footprint programme and is pursuing
Carbon Trust Standard Accreditation,
which measures its footprint and looks
at plans to manage reductions. Since
2008 the group has reduced its CO²
emissions by more than 13,000 tonnes
and approximately half of its total
electricity comes from 100 per cent
renewable energy sources.
In 2010 as part of its sustainable
green store plan, Arcadia completed
a scheme to replace around 300,000
lamps with energy efficient light
bulbs.
Burton – tailors to generations of British men
THE FULL MONTY
There are reputedly as many as 16
different stories to account for the
origin of the phrase ‘the Full Monty’,
including ‘breaking the bank at Monte
Carlo’ and Field Marshal Sir Bernard
Montgomery’s love of a full English
breakfast. But many believe the most
likely source of the phrase comes from
Montague Burton, whose classic three
piece suit with jacket, trousers and
waistcoat was known as a ‘full Monty’.
Profile:
Arcadia Group has more than 2,500
UK outlets across seven brands. It
operates a flourishing online business
and has 420 international franchise
stores in more than 30 countries
across Europe, the Far East and Middle
East.
ARCADIA BRANDS
The name Dorothy Perkins was
inspired by a classic rambling rose.
Burton provided the suits for England’s
1966 World Cup winning team and
later supported the Bobby Moore
Foundation’s work into bowel cancer
research. Originally launched as
Evans Outsize in 1930, Evans is the
UK market leader in womenswear
above size 14. Launched in 1966,
Miss Selfridge is Arcadia’s youngest
brand, it is targeted at customers
aged 18-24. In 2007, fans queued
around the block as the Kate Moss
for Topshop range was launched.
Topshop’s ‘brother’ Topman occupies
two floors of the ‘world’s largest fashion store’ on Oxford Street in London.
Wallis was founded in Islington in 1923
and now has 134 standalone stores
in the UK. Outfit offers a selection of
all seven Arcadia
brand ranges
in out-of-town
stores.
England’s
Bobby Moore
kitted out by
Burton
Suits you, sir
Did you know
During the First World War, Burton supplied a quarter of all clothing to the
British armed forces. By the end of the
Second World War the company was
estimated to be clothing around a fifth
of the British male population.
GM&T—ISSUE 5
17
shipping
Blueprint
for the
future
Gazprom Global LNG has agreed a longterm charter deal for two technically
advanced LNG carriers featuring the latest
environmentally-friendly engines
Featuring the latest environmental
developments in shipping
technology, the two ultramodern
Atlantic-Max ice2 class LNG carriers
commissioned by Sovcomflot,
Russia’s largest shipping company,
to serve Gazprom Global LNG for a
period of 15 years are clean burning
and energy efficient.
With governments working
towards their 2050 carbon reduction
targets, shipping emissions are
increasingly in the spotlight. The new
International Maritime Organisation
is already introducing stricter
standards on emissions of nitrogen
oxides (NOx) and sulphur oxides
(SOx) while the established Sulphur
Emission Control Areas (SECAs) in the
English Channel, North Sea and Baltic
are set to be extended from next year
to include the United States and the
18
GM&T—ISSUE 5
European Union’s ports.
The emissions footprint of GM&T
Group’s shipping operations is
an important factor in its future
strategies which is why its new
ships will be fitted with Dual Fuel
Medium Speed Diesel Engines built
by MAN Diesel & Turbo of Augsburg.
Operating on either boil-off gas from
the cargo, liquid distillate (Marine
Gas Oil) or residual (Heavy Fuel Oil),
SOx and particulate matter emissions
will be practically eliminated, CO2
emissions will be reduced by 3050% and NOx emissions will also
be significantly reduced giving the
carriers a much lower environmental
footprint than Qatari ‘Q-Flex/
Max’ ships, which run on HFO only,
or conventional steam ships that
consume 50% or more fuel per unit of
cargo.
LNG: at a glance
l LNG is created by cooling natural
gas to -160° Celsius. This reduces
its volume by a factor of more than
600, allowing it to be transported
efficiently by ship to serve customers
in regions with restricted access to
pipeline gas.
l At its destination, LNG is unloaded
at receiving terminals and stored as
a liquid until it is converted back to
natural gas and sent via local pipeline
for distribution.
l LNG is odourless, non-toxic, cleanburning and non-corrosive. In the
absence of an ignition source, it
evaporates quickly and disperses,
leaving no residue. LNG spills on water
or land require no environmental
clean-up.
The new carriers are being built
by STX Offshore and Shipbuilding in
South Korea with the co-operation of
the United Shipbuilding Corporation
of Russia. Shipping industry experts
are convinced that carbon emissions
will inevitably be taxed, and GM&T
Group estimates that savings from
the vessels, the first of which will be
delivered in the fourth quarter of 2013
and the second in mid-2014, could
reach US$3-4m per annum each.
Meeting the most stringent
requirements for controlling and
limiting operational emissions and
discharges, as well as the prevention
of environmental pollution in case
of emergency, the ships will have
ECO-S certification from the Russian
Maritime Register of Shipping.
Aside from the engines,
innovations in hull shape, paint
and equipment will also increase
fuel efficiency and environmental
performance, countering increases
in operating costs that might be
incurred through the need for more
expensive fuel grades or, in extreme
cases, the retrofit of ships. Despite
their 40% lower energy requirements
and carbon emissions than
conventional carriers, it is estimated
that Q-Flex carriers, which were
first introduced in 2007, will soon
be unable to operate economically
in the US and EU and will need to
be modified at an estimated cost of
US$900m.
London-based GGLNG has
developed a worldwide LNG
marketing and marine transportation
portfolio across the world. Through
its Singapore-based affiliate, it
now ranks among the most active
LNG traders and charterers in Asia.
Gazprom’s LNG business vision is
to build a long and medium-term
LNG supply portfolio, entering new
markets (including those inaccessible
by pipeline gas), introducing
new products and services and
establishing relationships with new
suppliers and customers.
Designed for the harshest climatic
conditions, the 170,000 cubic metre
capacity carriers also feature a
membrane structure for the cargo
system and incorporate the latest
requirements for vessel safety,
crew accommodation and working
conditions. They will be able to
operate between almost all existing
LNG terminals, including year-round
exports from Russia’s first LNG
project, Sakhalin-2, and the Shtokman
LNG project terminal.
GM&T—ISSUE 5
19
THE ENERGY EVENT
Star of the show
Gazprom Energy chose the UK’s leading
industry event to launch its new brand
Here’s to the future:
Gazprom Energy’s new
brand was toasted at a
champagne reception
20
GM&T—ISSUE 5
With more than 3,500 visitors flocking
to the UK energy industry’s leading
annual exhibition and conference in
September, Gazprom Energy picked
the perfect moment to unveil its new
brand and visual identity.
The Energy Event focuses on
energy procurement, management
and efficiency, bringing together all
of the industry’s main players for two
days of exhibiting and networking.
This year’s event stepped up a notch
by moving to Birmingham’s NEC
from its previous base at the nearby
Motorcycle Museum.
A free lecture and seminar
programme was hosted by a mix of
business and energy professionals.
With more than 150 companies
exhibiting, Gazprom Energy’s stand
stood out with its fresh, bright design
and social ambiance.
The 10-strong team at the event
included Managing Director Jon
Feingold, Head of Power Steve
Armitage and Head of Gas Mark
Eccles plus representatives from the
sales and marketing teams.
Gazprom Energy used a guerrilla
advertising campaign to promote
the launch; a series of intriguing
tiles were placed on the floor of the
exhibition hall to tempt visitors to the
stand where a celebratory lunchtime
champagne reception was held to
welcome the new brand.
“Lunchtime is usually the quietest
time, but our reception was a huge hit
and meant we were one of the busiest
stands in the hall,” says Yvonne
Henderson, Marketing Executive for
Gazprom Energy. “It was an excellent
opportunity for the team to network
with existing and prospective
customers.”
Among the visitors were Scott
Birley from Get Solutions, who
thought the new brand was “slick”;
Camilla Sanders of the Energy Team
who liked the “bold, simple and
engaging” feel; and Clive Ferrey from
Summit Energy, who described it as
“clean and inviting”.
“An electronic survey allowed us to
measure the success of our advertising
campaigns and also get some valuable
feedback on what our target audience
thought of the new Gazprom Energy
brand,” says Yvonne. “The feedback
was extremely positive.”
CARBON WORKSHOP
The transition from phase II to phase
III of the European Union Emissions
Trading Scheme (EU ETS) was the
main theme of Gazprom Energy’s
carbon workshops, in which more
than 20 senior staff from prospective
clients and customers, including Tata
Steel, Ineos, GlaxoSmithKline, Ford,
British Sugar, Kraft, Renault and
Ahlstrom, considered the significant
risk they face as they begin to buy
carbon credits in the market.
Two workshops were held, first at
Gazprom Marketing & Trading’s
London HQ on 28 September followed
by a similar event in Paris a week later
for prospective European customers.
Anindya Boral, Associate Director
with independent analysts Thomson
Reuters Point Carbon, reviewed
phase II, which will conclude at the
end of 2012, and gave an overview
of the prices and available volumes
expected in phase III, considering all
the potential influences from different
parties around the world.
Tatiana Fayzullina, Gazprom’s
Head of Gas for Transportation, then
discussed Joint Implementation (JI)
projects being developed in Russia
and the difference between these and
the Clean Development Mechanism
(CDM). This also included a review
of the potential delivery of Emission
Reduction Units (ERU) credits
Emissions
trading
tops
agenda
Ahead of phase III of the EU’s ETS scheme,
Gazprom Energy held a workshop to advise
prospective customers of their options
into the EU ETS over the next year.
Ignacio Gistau, Gazprom’s Head of
Downstream Origination offered
advice on how Gazprom Energy offers
clients who are exposed to the market
in phase III a portfolio management
solution with up-to-date market
information that allows them to
make informed decisions on carbon
credit transactions, thus reducing the
significant risk in phase III which runs
for eight years from 1 January 2013.
Ford Motor Company’s Senior
Environmental Engineer Rita
Neumann was among the delegates.
“It’s important for Ford to look ahead
to phase III of the EU ETS and the
workshop gave interesting insights
on this,” she said. “The speakers
were very knowledgeable. ERUs are
relatively unknown so it was good
to hear more about them and the
method of forecasting of EU Emission
Allowances prices was made clearer
by the Point Carbon presentation.”
Gazprom Energy’s Business
Development Manager Simon Watson
said: “These workshops followed the
success of those in 2010, which were
attended by 20 large industrial emitters
of CO2. Since the latest workshops,
we’ve continued to work with the
attendees to propose solutions and
benefits offered by the EU ETS scheme.
With uncertainty around 2012 and
phase III, work will continue in London
and Paris to develop more workshops
for next year.”
GM&T—ISSUE 5
21
Mark SULLIVAN, SUMMIT ENERGY
PROFILE
Richmond-based
Summit Energy
provides energy risk and
procurement services to
clients around the globe
How long have you worked with
Gazprom Energy?
The management team at Summit
have worked with Gazprom Energy
since its inception in the UK through
Gazprom’s acquisition of Pennine Gas.
How does the relationship between
Gazprom Energy and Summit
Energy work?
We maintain a clear ethic towards
our clients, who engage us to look
after their interests. We are keen to
ensure that they have the best supply
arrangements to fit their needs. We
look for responsiveness, the right
product, competitive pricing and
on-going support. We’ve taken on
new clients who work with, and have
awarded business on a competitive
basis, to Gazprom Energy. We’re
confident that when we award
business it works well.
L-R: Mark Sullivan,
Operations
Director UK,
Clive Ferrey,
Sales Director
UK, Noreen
Guy, Managing
Director UK, Mark
Daubney, Risk
Manager
What does your day-to-day
job involve?
I am responsible for ensuring
seamless delivery to our clients and
expanding our offering by drawing
on the huge resources at our disposal.
Our experience is such that we have
a good idea of what UK clients are
looking for in terms of product and
customer service. We’re intent on
continuously improving the service
and value for our clients.
What are you concentrating on at
the moment?
Right now it’s getting to grips with the
vast offering available from Schneider
and communicating it to our clients.
Tell us about Summit Energy
It is the global major in the provision
of risk and procurement services to
energy intensive clients. Our total
managed spend equates to some
$20billion per annum and our team of
nearly 400 energy professionals serve
more than 650 client portfolios in 75
countries. Recently acquired by the
Schneider-Electric group, our client
support potential has expanded into
the demand side with all the resources
of the ‘global energy management
specialist’ at our disposal.
What specific business challenges
do you face?
The team here in Richmond aims
to develop Summit’s reputation and
reach nationally as well as supporting the international client. Our
brand, extensive experience and
the reputation of our UK management team helps a prestigious
client list gain significant value.
We expect another year of strong
growth in 2012.
22
GM&T—ISSUE 5
What excites you about your job?
Being part of a team that can bring
such a strong offering to a market
we have grown up and worked in
for so many years. Being in the UK
energy markets ensures a 90 degree
learning curve from day one, but,
being a new entrant with all the best
tools in the box and now the resources
of Schneider-Electric to draw on, the
curve has just cranked up a notch or
three. We are relishing the challenge.
Why did you choose Gazpron Energy
and why have you stuck with them?
Competitive products and a
willingness to support them fully
has seen Gazprom Energy make
significant inroads into the UK
supply market in recent years. The
team at Gazprom Energy, from Jon
Feingold and our primary contact
Andrew Morris to the operational
units, provide solid support to
Summit’s processes and the clients
we have entrusted to them.
Summit Energy
International
Summit Energy International
offers a comprehensive
range of supply side risk
and procurement solutions to some of the world’s
largest energy consuming
organisations. The company was recently acquired by
Schneider-Electric allowing
for the co-ordination of supply and demand side strategies and putting at Summit’s
disposal the expertise of
110,000 energy professionals in approximately
140 countries. Summit’s
award-winning dashboarDView™ online portal allows
clients to access their key
data wherever they are
in the world, including on
portable devices. From
hedge reports to budget
variance information and
detailed cost, consumption
and carbon reporting at
site, division or corporate
level, dashboarDView™
gives customers unrivalled
access to, and control over,
their energy and carbon
exposure.
Portraits by Roger Harris
Economical
cars
Page header
TOP FIVE
With growing concern about fuel costs and carbon emissions, motorists are
increasingly looking at more economical cars. GM&T presents a guide to
the most fuel efficient options in five different classes
Small Family
Toyota Prius 1.8 VVT-i T3
Supermini
Fiat 500 Twin Air
For the environmentally conscious
city dweller, the supermini market
offers plenty of choice. In terms of
pure economy, the five-seat Kia Rio
Ecodynamics, claiming fuel economy
of 88.3mpg and emissions of 85g/
km CO2, just about pips the two-seat
Smart Fortwo (85.6mpg and 86g/km).
These cars also offer the dual benefits
of cheaper road tax and exemption
from the London Congestion Charge.
But a cheaper option than both is the
Fiat 500 with a starting price of £9,465.
Featuring a stop-start engine system
that saves fuel and emissions when
the engine is idling in traffic, the little
Fiat also offers retro-styling that is
particularly attractive so you can have
fun and be green at the same time.
Mention hybrid engines and most
people’s thoughts immediately turn
to the famous Toyota Prius. The first
green car to really break the mainstream market, the Prius combines
cheap running costs and extremely low
emissions with the qualities expected
of a larger car. The basic but roomy
T3 offers average fuel consumption
of between 70.6 and 72.4 miles per
gallon. Toyota has steadily improved
the car’s performance over the years
and compared to rivals such as the
Honda Insight 1.3, the Volvo S40 and
VW’s Golf 1.6 TDI 105 Bluemotion, it
is the only car in its class to produce
emissions below 100g/km. On the
downside, it’s more expensive than
others in this class – prices start at just
over £20,000 – but it is more likely to
hold its value in the used car market.
Large Family
Volkswagen Passat 2.0 TDI
BlueMotion
In the quest for fuel efficiency and low
emissions, much of the focus has been
on incredibly small city runarounds
with just enough luggage space for a
handbag or a briefcase. Larger families
also have plenty of choice. It’s fairly
close between the Passat and rivals
such as the Peugeot 407, Renault
Laguna and Vauxhall Insignia but the
Passat’s low-resistance tyres, attention
to aerodynamics and excellent fuel
economy are impressive with CO2
emissions rated at 120g/km and
average fuel consumption at 61.4mpg.
Executive
BMW 520d SE
Dynamic and stylish, the multi-awardwinning BMW, which was described
in a review by What Car? Magazine
as “the businessman’s darling”, is
also one of the cleanest in its class,
particularly the 2.0-litre diesel which
averages 55.4mpg and emissions
around 125g/km. Features such as an
indicator to help drivers know when
to change gear and using brake energy
to recharge the battery help maximise
efficiency.
Large 4x4
Lexus RX450h SUV Hybrid
For many people the very idea that you
can be environmentally conscious and
be “a school run mum belting round
your leafy London suburb in a 2,700kg
SUV”, as the BBC’s Top Gear magazine
put it, is a contradiction in terms. We’ve
come a long way from the frugality of
the tiny Fiat 500 to the Lexus, but it does
at least come as a hybrid, combining
a 3.5-litre petrol V6 engine with an
electric motor to provide reasonable
fuel economy at an average of 44.8mpg
and emissions of 148g/km, although
that’s still a fair bit more than the
executive BMW.
GM&T—ISSUE 5
23
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Managing editor
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Agency editor
Tony Matthews
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company. Permission to reprint
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Published in December 2011 by
Gazprom Marketing & Trading