Platt's Asia Energy Outlook 2010 | Petroleum | Natural Gas

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com November 2009
2010
Asia Energy
Outlook
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2009 Platts
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Oil Price
History
Redefined
Stockpiling or Consuming:
China’s Current Oil Demand
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insight
November 2009 insight 1
Publisher’s Note
Guest Editor’s Note
Martin Daniel
Patsy Wurster
Welcome to the third annual 2009 Asia Energy Outlook issue of Platts Insight. In pre-
vious years, we have sought to bring you a breakdown of the most pressing energy
matters facing the region and this year is no exception. Platts distinguished and global
editorial staff are well positioned to provide a unique level of analysis to Insight readers.
Indeed, demand for this level of reporting has forced us to continually increase the
distribution of the magazine—it now goes to more than 30,000 industry professionals
and financiers in Asia, North America, Europe and the entire Pacific Rim region.
Perhaps an increase in demand for reliable energy information is reflective of the
changes occurring in the industry. As companies deepen their commitment to find-
ing and using cleaner, more sustainable and alternative sources of energy, for example,
there is an equally great need to understand how to incorporate these relatively new
ideas into the traditional ways that many companies have conducted their business.
The 2009 Asia Energy Outlook tackles some of these challenges by looking at the
increasingly active oil and coal markets in India, providing an overview of devel-
opments in the Chinese oil and renewables markets, examining the active Asian
LNG sector, covering the growing West Asian electricity market and exploring
global carbon and emissions issues.
Also, we are pleased to be able to showcase once again the full Platts Top 250
Global Energy Company Rankings

. Each year, Platts ranks the world’s top energy
companies by financial performance, identifies who’s up and who’s down and pro-
vides a breakdown of the Top 250 by industry and region while offering commen-
tary on trends and movement within the list.
We’ll be publishing additional issues of Insight throughout the year in conjunction
with other major events. If you’d like to learn more about our 2009 and 2010 issues,
visit our web site at http://platts.com/Magazines/Insight/. Thank you for reading.
Patsy Wurster
Publisher, Platts Insight
“The global crisis is altering the shape of the world’s economy and shifting the
global economic center of gravity to the East.” So writes Lawrence Wong, and it is
a theme repeated throughout this issue of Insight.
Stories from across the energy spectrum show Asia is currently leading the way.
A genuinely global gas market is emerging as the Asian LNG business comple-
ments European and North American activity. Renewable energy investment is
burgeoning in Asian countries such as China, while regional investors such as Abu
Dhabi’s Masdar are at the forefront of innovative activity. The carbon market, to
date a cozy European business, is going global following elections in Australia, the
US and Japan—and negotiators at the upcoming Copenhagen climate talks who
fail to acknowledge the new reality will be sadly disappointed.
But there are equally important shifts occurring within the Asian energy econo-
my, and these are also reflected in this issue. Within the region, India has developed
a new assertiveness, coming out of the shadow of China. If foreign companies won’t
invest there, then domestic ones will—a message finding resonance elsewhere.
And across the region the need to balance economic, social and environmen-
tal goals is also finding resonance. Witness the words of a senior Indian official,
speaking about the country’s energy needs in this issue’s coal story: “We also can-
not override the environment—we need to implement policy that looks after all
aspects including diversity, forestry, elephant trails. Riding roughshod over these
is not the way to develop growth.”
Martin Daniel
Editor, Platts Power in Asia
2 insight November 2009
Inside
Authors
1 Publisher’s Note
Patsy Wurster
1 Guest Editor’s Note
Martin Daniel
5 Stockpiling or Consuming: China’s
Current Oil Demand
Ross McCracken
10 Onwards and Upwards: Middle
Eastern Electricity Prospects
Martin Daniel
20 The Great LNG Bear of 2009, and Its
Approaching Sequel
Jonty Rushforth
28 New Renewable Energy Markets
Take Shape Across Asia
David R. Jones
33 As World Mopes, India
Invests in Itself
Vandana Hari
37 India: Stalking an Asian
Coal Revolution
James O’Connell
42 Carbon Trading —
Asia and the New World Order
Frank Watson and Mayumi Watanabe
46 A Sustainable Energy Future for Asia
Lawrence Wong
48 Oil Price History Redefined
(Platts Top 250 Global Energy
Company Rankings

)
Melanie Wold
Martin Daniel read Modern History at Oxford University. After
research on economic history there, he joined the Econom-
ics Unit of the then British Coal Corporation, following which
he became head of the Supply, Transport and Markets Group
at IEA Coal Research. He then worked at a UK energy media
and consultancy until 2001 when he joined Platts, where he
edits the newsletter Power in Asia. He is an active naturalist,
specializing in Asian forest birds.
Vandana Hari is Platts News Director for oil and gas industry
coverage in Asia, managing the Asia news operations of
Platts’ real-time electronic news service and flagship print
publication Platts Oilgram News. She is a regular commenta-
tor on BBC and CNBC television in Asia, providing her analy-
sis and view on oil industry developments and price trends.
She holds a bachelor’s degree in science and post-graduate
diplomas in journalism from the YWCA and the Times Re-
Martin Daniel Vandana Hari David R. Jones Ross McCracken James O’Connell
Jonty Rushforth Mayumi Watanabe Frank Watson Melanie Wold Lawrence Wong
November 2009 insight 3
search Foundation in New Delhi, and began her career with India’s
leading English-language daily The Times of India in 1989.
David R. Jones is Platts’ global renewable energy editor, based
in London. An environmental journalist with 20 years’ experience,
Jones edited newsletters on US state and local government, medical
waste management, oil pollution, and solid waste before joining
Platts in 2001 to cover coal and energy policy.
Ross McCracken, editor of Energy Economist, joined Platts in 1999 to
run the European and West African crude desk. He was previously
an editor with an Oxford University-based political and economic
consultancy, and has taught in Poland and China. He holds a master’s
degree in European studies from the London School of Economics
and his undergraduate degree is from the University of East Anglia.
James O’Connell, international coal managing editor, joined Platts
Metals in 2001, covering global precious metals trading. He joined
the coal team in early 2007, leading reporters in Europe and Asia
producing news for the global coal, electrical and steel industries.
He previously worked for Irish broadcaster RTE. He holds a BA in
English and History and a Higher Diploma in Applied Communica-
tions from the National University of Ireland.
Jonty Rushforth has been a journalist for eight years, and writing
about the energy industry and markets for four. After initially editing a
magazine about lawyers in Latin America, he moved to Platts, covering
European gas and power. In 2009 he moved to Singapore and helped
launch Platts’ spot Asian LNG assessment, the Japan Korea Marker.
Mayumi Watanabe joined Platts in 2004 having previously worked
for the Japanese media groups Yomiuri and Takarajima. She is
known for bringing transparency to molybdenum and indium, metals
used for solar cells, and normally works in Tokyo on the metals and
steel markets. She has written over 3,000 stories on these markets to
date. She co-authored her article while seconded to Platts’ London
office to work on the emissions market.
Frank Watson, managing editor of Platts Emissions Daily, is a
financial journalist and editor with nine years experience of com-
modities coverage, specializing in energy markets. He has headed
up the global emissions team at Platts since May 2008, having held
the position of Europe Editor on emissions markets since August
2005. Frank developed Platts’ coverage of the emerging EU Emis-
sions Trading Scheme, UN Clean Development Mechanism and Joint
Implementation schemes, covering regulatory policy under the EU
ETS and Kyoto Protocol, producing independent over-the-counter
price assessments, market commentary and analysis.
Melanie Wold is a freelance journalist specializing in US and European
investigative news stories covering a wide range of financial markets
and technology. She has written for industry publications including
Financial News, Securities Industry News, Traders Magazine, CME
Magazine and Profit & Loss Magazine. Prior to her freelance career,
Melanie was the European editor for Dealing with Technology and
Inside Market Data, both Incisive Media publications. Melanie has also
worked for Dow Jones Telerate and Platts, in various editorial and mar-
keting roles. Melanie holds a bachelor of science degree in business
administration from the University of Maine.
Lawrence Wong is chief executive of the Energy Market Authority
(EMA) in Singapore. In his career in the civil service, he has held
appointments in Trade & Industry, Finance, Health, and also as the
principal private secretary to the Prime Minister. Mr. Wong has a
masters in public administration from the Harvard Kennedy School.
He also obtained undergraduate and masters degrees in econom-
ics from the University of Wisconsin-Madison and the University of
Michigan-Ann Arbor.
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November 2009 insight 5
oil
Stockpiling or
Consuming: China’s
Current Oil Demand
Ross McCracken, Editor, Platts Energy Economist
Based on refinery throughput and crude import data,
Chinese oil demand appears to be rising, while new car sales
are at record levels—the beginnings perhaps of a new oil
supply crunch. However, other data paints a very different
picture; falling consumption and large rises in inventory levels.
China is stockpiling not consuming, a process that should act
as a medium-term stabilizing factor on the oil market.
Future oil demand growth remains
highly uncertain, sensitive to the speed
and extent of the economic recovery,
as outlined in the International Energy
Agency’s Medium-Term Oil report, pub-
lished in June 2009. However, what is
clear is that Chinese oil demand growth
is a key factor. Not only is it expected
to be the largest single source of de-
mand growth, but its sensitivity to GDP
growth is larger than for OECD coun-
tries. The IEA estimates that Chinese oil
demand could reach 9.6 million barrels
a day (b/d) in 2014 under a high GDP
growth scenario, or 8.5 million b/d un-
der conditions of lower growth.
As a result, oil demand in China is be-
ing closely watched. However, two dif-
ferent stories are emerging that reflect
the Chinese authorities release of sta-
tistics and the way in which the media
reports them.
According to data supplied by Cus-
toms and the National Bureau of Statis-
tics, and then interpreted by the media,
Chinese oil demand is racing ahead. It
rose by 4.21% on the year in July to a
record 34.92 million metric tons (mt).
This is ‘implied’ oil demand, the word
‘implied’ often falling from the media
headline where economy of wordage
and impact are all important. The figure
actually represents refinery throughput
plus net imported oil products. On the
same basis, implied oil demand in the
January-July period rose 0.7% to 221.47
million mt, compared with the same
period in 2008, the first increase since
the start of 2009.
However, if implied Chinese oil de-
mand appears to be up, consump-
tion appears to be down. According to
China’s official Xinhua news agency,
surveys by the China Petroleum and
6 insight November 2009
Chemical Industry Association (CP-
CIA) show that consumption of crude
oil dropped 2.9% in first-half 2009 to
190 million mt or 7.7 million b/d.
The missing link is, of course, stocks.
The government releases data on imports,
exports, domestic crude production and
refinery throughput, but does not release
official data on the country’s actual oil
consumption figure and oil stockpiles.
Using the implied demand data, it can
be seen that crude stocks in China—
domestic production plus net crude im-
ports less refinery throughput—rose by
8.53 million mt in the year to July.
Like the government, the CPCIA does
not provide overall stock levels, but it
does comment on changes in their lev-
els. According to the association, oil
product inventories registered large in-
creases in July. Chinese financial news
website Caijing reported that the July
oil products stocks of China’s giant re-
finers Sinopec and PetroChina were up
30% on the year, while July oil prod-
ucts sales were down 6%. The CPCIA
reported that through end-June, Chi-
na’s oil products inventory was 43.5%
higher than a year ago.
Oil Product Stockpiles
So while Chinese refiners have been
increasing their throughput, hitting
all-time highs from May through to
July, and reflecting rises in regulated oil
product prices, it appears that the extra
output is being stockpiled rather than
consumed, while crude inventories are
also growing.
The increase in refinery throughput
in the second quarter of 2009 reflects
the resumption of operations at several
key refineries following maintenance,
as well as the start-up of a 240,000 b/d
refinery at Huizhou and a 160,000 b/d
refinery expansion project in Quan-
zhou. China’s state oil companies are
expected to add nearly 1 million b/d
of new refinery capacity by end-2009,
and they are still announcing new
plans; on September 17 Sinopec said
it would invest $3.5 billion to add a
further 240,000 b/d of capacity to the
Quanzhou refinery as part of a second
phase expansion.
It is doubtful that, in the short term, a
market exists for the additional output
either domestically or internationally.
Floating storage of oil products globally
was reported by the IEA to have risen
above 60 million barrels at end-June,
while preliminary data for end-August
indicated some stabilization at about
60-65 million barrels, down slightly
from end-July. Floating storage for
crude was put at 50-55 million barrels
at end-August down from about 65 mil-
lion barrels at end-July.
The problem of excess oil stocks is re-
flected in Chinese state company plans
to expand their own storage capacity.
At the beginning of September, the
China National Petroleum Corpora-
tion announced that it would expand
its oil storage capacity to over 45 mil-
lion mt in coming years, 15 million mt
of which would be for commercial use.
Local reports said that 66 new facilities
oil
-1,000
-800
-600
-400
-200
0
2008 2006 2004 2002 2000 1990 1980
0
1,500
3,000
4,500
6,000
7,500
Imports[+]/Exports[-] (left)
Consumption (right)
1. Chinese gasoline consumption and imports/export balance (10,000 mt).
Source: National Bureau of Statistics
November 2009 insight 7
oil
are planned to come into operation in
2009. CNPC itself opened ten new stor-
age facilities in first-half 2009.
The rush to build new storage reflects
both the long-term government aim of
increasing China’s strategic petroleum
reserve, as well as the short-term neces-
sity of finding a parking space for the
oil products being produced. Accord-
ing to a draft of the multi-billion-dol-
lar stimulus package for the oil, petro-
chemical and chemical sectors released
earlier this year, China hopes to have
the capacity to store an additional three
million mt of oil products by end-2009,
six million mt by 2010 and 10 million
mt by 2011.
Far from indicating a recovery in the
world economy and heralding the ap-
proach of a second oil supply crunch,
lackluster domestic Chinese consump-
tion suggests a slower recovery, while
increased stock levels and storage ca-
pacity can be seen as a medium-term
stabilizing factor for the oil market. The
relevant question might not be about
demand growth, but about what hap-
pens when China stops stockpiling.
Although it is only one month’s
data, preliminary indications for Au-
gust, released in September by the
Chinese General Administration of
Customs, appear to confirm this out-
look. Chinese refinery throughput fell
in August from the record high of July,
the first month-on-month drop in
2009. Crude imports and oil product
imports also fell. The former remains
high, 18% up on the same period of
2008 at 18.47 million metric tons
(4.38 million b/d), but the latter was
down 28.87% on July and 18.86% on
the year at 2.71 million metric tons.
At the same time, crude and oil prod-
uct exports jumped 25% and 10.65%
respectively on the month.
Transport Key
Chinese oil demand growth is cen-
tered on the transportation sector with
gasoline and diesel demand on a ris-
ing trend and fuel oil usage declining.
This trend is likely to continue as fuel
oil use for power production is further
reduced, and as conventional refinery
capacity squeezes out China’s ‘teapots’,
which typically use fuel oil as a feed-
stock to produce off-specification gaso-
line and diesel.
In line with rising gasoline demand,
Chinese domestic car sales have in-
creased markedly in recent months,
another statistic used to reinforce the
apparent recovery in Chinese oil de-
mand. This reflects heavy government
subsidization. Beijing has halved taxes
on new cars and offered subsidies to the
country’s rural population to buy small
vehicles. Even in 2008, shielded from
crude’s highs on international markets
by regulated domestic prices, the num-
-1,000
0
1,000
2,000
3,000
2008 2006 2004 2002 2000 1990 1980
1,000
2,000
3,000
4,000
5,000
Imports[+]/Exports[-] (left)
Consumption (right)
2. Chinese fuel oil consumption and imports/export balance (10,000 mt).
Source: National Bureau of Statistics
The relevant question might not be about
demand growth, but about what happens
when China stops stockpiling.
8 insight November 2009
oil
ber of cars on China’s roads rose by a
quarter over 2007.
How China’s transportation system
develops will heavily influence the
country’s future oil demand. The re-
covery in new cars sales in 2009 follows
a rise in monthly average sales from
360,794 in 2003 to 732,712 in 2007,
while they still rose 6.7% in 2008, de-
spite the economic slowdown. Yet per
capita car ownership remains a fraction
of that in developed countries and there
is clearly pent up demand for travel, as
shown by rail use statistics.
But how will China’s per capita car
ownership evolve? While the huge size
of the population suggests an enor-
mous market, it may also prove a self-
limiting factor as population density is
high and urban pollution is already an
issue. In addition, the country’s road
infrastructure is different to that in Eu-
rope or the United States.
Moreover, the relationship between
per capita car ownership and oil de-
mand growth is uncertain. Strong
growth in car ownership in Europe
since 1980 does not correlate with the
region’s oil demand growth. While
again the comparison suffers from be-
ing for a developed country versus a de-
veloping one, Japanese oil demand has
been falling since 1999, but per capita
car ownership rose from 404 per thou-
sand people in 1999 to 441 per thou-
sand in 2004.
That China’s oil demand will start to
rise as growth recovers is certain, reflect-
ing the country’s developmental sta-
tus. But in the short-term, oil demand
growth is arguably being over-stated
by a reliance on data based on refinery
throughput. In addition, while car own-
ership has a long way to rise to reach
developed country levels, there are in-
ternal limitations specific to China that
suggest the country will never achieve
or perhaps even approach US levels. Nor
can demand management initiatives be
ruled out by government, whether driv-
en by environmental, security of supply
or local pollution imperatives. ■
Tibet
Guangdong
Fujian
Macau
Hong Kong
Xinjiang
Ningxia
Qinghai
Gansu
Shaanxi
Yunnan
Guizhou
Sichuan
Chongqing
Guangxi
Hunan
Hubei
Henan
Shandong
Jiangxi
Anhui
Zhejiang
Jiangsu
Shanghai
Heilongjiang
Jilin
Liaoning
Inner Mongolia
Shanxi
Hebei
Tianjin
Beijing
Hainan
South China
Sea
Bay of Bengal Philippine
Sea
Pacific
Ocean
East China Sea
Sea of
Japan
(East Sea)
Yellow Sea
SOUTH
KOREA
NORTH
KOREA
RUSSI A
JAPAN
TAJI KI STAN
PAKI STAN
PHI LI PPI NES
NEPAL
MONGOLI A
LAOS
VI ETNAM
KYRGYZSTAN
KAZAKHSTAN
I NDI A
CHI NA
BURMA
BHUTAN
BANGLADESH
TAI WAN
Hanoi
Vientiane
Seoul
Pyongyang
Kathmandu
Ulan Bator
Astana
Bishkek
NewDelhi
Thimphu
Dhaka
Beijing
1,000-2,000
500-1,000
0-500
2,000-4,000
3. Chinese oil product consumption 2007 (10,000 tons).
Source: National Bureau of Statistics
10 insight November 2009
The Middle Eastern electricity sec-
tor doesn’t always get the attention it
deserves, bracketed as it is between the
sheer scale of the wider Asian power mar-
ket and the opportunities afforded by the
competitive European market. But recent
developments in the electricity sector of
the region in general and of the countries
comprising the Gulf Cooperation Coun-
cil (GCC) in particular underline the fact
that the Middle East is not only one of the
fastest growing but also most prospective
of global electricity markets.
Just a few examples may suffice to il-
lustrate the point. In September, Kuwait,
until now one of the last bastions of state
ownership of power generation in the re-
gion, saw at least ten consortia express
interest in providing consultancy servic-
es for what would be the country’s first
privately-owned independent water and
power producer (IWPP) project. Mean-
while Oman awarded a consultancy con-
tract covering services for what would
be the region’s first large-scale coal-fired
power plant. Elsewhere, the competition
to build the region’s first nuclear plant
is nearing a conclusion in Abu Dhabi.
And the initial phase of the region’s first
interconnected grid, covering Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia and
the United Arab Emirates (UAE), the six
countries comprising the GCC, entered
operation in the third quarter of 2009.
Admittedly for decades up to the late
1990s the Middle Eastern power sec-
tor was seen as a backwater, and not
entirely without reason. Regardless of
country, the region’s electricity supply
industries showed very similar charac-
teristics, even though the different na-
tional grids were not connected to each
other. They were heavily subsidized be-
cause they charged below-cost prices for
their output, they comprised integrated
generation, transmission, distribution
and supply systems, they operated under
complete state control, they used power
plants fired almost exclusively with
indigenous oil and gas, and they were
relatively small by global standards. Put
simply, the region offered limited op-
portunities for outside involvement.
The Emergence of Private Power
Exceptions to this monolithic picture
appeared from the mid 1990s after Oman
tendered the region’s first independent
power producer (IPP) project. Awarded
to a predecessor of France’s GDF Suez
Energy International, the Manah-1 proj-
ect entered operation in 1996.
Manah-1 was relatively small at 90
megawatts (MW). And much of the
$216 million of funding for the proj-
ect was provided by the International
Finance Corporation, the private sector
lending arm of the World Bank Group,
together with the export credit agen-
cies of the United Kingdom and France.
These lenders are typical of the multi-
lateral and bilateral institutions usu-
ally called on to finance pioneering IPP
projects in untried markets.
electricity
Onwards and Upwards:
Middle Eastern
Electricity Prospects
Martin Daniel, Editor, Platts Power in Asia
November 2009 insight 11
electricity
But Manah-1 was the precursor of an
increasing number of increasingly am-
bitious projects as the private generation
model spread across the region over the
next decade or so. Involving both IPPs
and off-grid captive generators serving
energy-intensive industrial consumers,
the projects have grown markedly in
size and cost.
Take for example the Ras Laffan-C
IWPP project in Qatar, which will have
2,730 MW of electric capacity and has
an estimated cost of $3.8 billion. The
project was awarded in March 2008 to
the Ras Girtas Power Company, which
again includes GDF Suez Energy Inter-
national, this time in consortium with
Japan’s Mitsui & Co., Shikoku Electric
and Chubu Electric, as well as two local
energy companies.
In common with Manah-1, Ras Laf-
fan-C is being funded in part by mul-
tilateral, bilateral and export credit
agencies, in this case the Japan Bank
for International Cooperation, Export
Development Canada, Italy’s SACE and
the Islamic Development Bank. But the
project, which closed on $3.25 billion
of debt in August 2008, differs from
Manah-1 in that it got much of its fund-
ing from a syndicate of 21 international
and regional commercial banks, with
the finance extended by these banks
indicating the experience and comfort
levels such institutions have achieved
in lending to Middle Eastern private
power projects over the past decade.
Indeed from the late 1990s on, at a
time when power markets in many
parts of the world were closed or un-
attractive to international developers
and lenders, the Middle East became a
hotspot for private power investment.
Since Manah-1 in 1996, IPP and IWPP
developers in the GCC countries alone
have closed finance on projects with
more than 31,330 MW of electric and
1,724 million imperial gallons a day of
desalinated water capacity costing al-
most $42 billion (Table 1).
Moreover, this excludes the very large
amount of capacity developed on what
is effectively an IPP basis but to serve
industrial customers rather than the
grid. The 1,074 MW of captive genera-
tion capacity built by Tihama Power at
four sites in Saudi Arabia to serve the
energy company Saudi Aramco is typi-
cal of this type of investment.
The amount of activity is reflected in
the list of international investors active
in the region. GDF Suez Energy Interna-
tional may be the largest single inves-
tor but it is far from the only one, with
other European companies including
the UK-based International Power and
France’s Total also being active. Com-
panies from the US have become less
prominent since developers such as
CMS and PSEG withdrew in the mid
2000s to concentrate on their home
market, but are still represented by in-
vestors such as AES.
There is a strong contingent of Asian
investors including Japanese trading
houses such as Marubeni, Mitsubishi,
Mitsui and Sumitomo, and Japanese
electric power companies such as To-
kyo, Chubu, and Shikoku. Southeast
Asian companies including Singapore’s
Sembcorp Utilities and Malaysia’s
MMC, Tenaga Nasional Berhad and
Tanjong are also active. The substantial
Malaysian presence reflects not only
the level and maturity of IPP develop-
ment in their home market but also the
investors’ experience of funding large-
scale power projects using Islamic fi-
nancial instruments.
This is also a factor in the presence of
investors from within the region’s own
power and financial sectors, such as
the Abu Dhabi National Energy Com-
pany (Taqa) and the Gulf Investment
Corporation. Several of the region’s
governments, such as Abu Dhabi and
Saudi Arabia, require that domestic
companies hold controlling or signifi-
cant stakes in their IPP and IWPP proj-
ects, explaining their involvement. But
some of the regional-based IPP play-
ers are also active beyond their home
market and, indeed, outside the Middle
East in the case of Taqa.
Private Power Limitations
While private generation has become
entrenched in the Middle East and espe-
cially the GCC, it has not been accom-
panied by wider liberalization of the re-
12 insight November 2009
electricity
gion’s electricity supply industries. True,
the privatization of existing generating
plants has occurred in places such as
Abu Dhabi, but it is usually where the
plant is to be expanded or replaced with
more capacity. Meanwhile with very
few exceptions the region’s electricity
transmission, distribution and supply
systems remain state-owned and in all
cases fully regulated. And critically, the
retail electricity prices charged through-
out the region still rarely cover the cost
of supply and are again fully regulated.
This means that the success of IPP and
IWPP projects in securing international
investors and lenders depends basically
on the bankability of the host govern-
ment, not of the power offtaker. And
outside the captive generation sector,
the sale of a plant’s output using any-
thing other than the single buyer model
backed by state guarantees is not feasible.
The region is very much at base camp in
terms of the ascent to a fully liberalized
and competitive power market.
Moreover since 2008 there has been
some reversion to the state financing and
ownership of power generating plants at
one time planned as IPP or IWPP proj-
ects. But the retreat from private and for-
eign participation to direct state invest-
ment in countries such as Saudi Arabia is
less ideological than pragmatic.
The reversion to state investment
originated with the rapidly increasing
cost of engineering, procurement and
construction contracts from the mid
2000s. Caused by the spiraling price of
equipment and other inputs at a time of
strong demand, as well as by the limited
pool of eligible contractors, the problem
was exacerbated from 2008 by the in-
creasing cost and much tighter avail-
ability of limited recourse finance as a
result of the global economic crisis.
The upshot was that many planned
private generation projects in the re-
gion have suffered significant delays
in implementation since 2007, leading
to fears of power shortages a few years
down the line. Some governments have
thus reverted for the moment to the
quicker and in cases cheaper model
of state financing to expedite the fast-
track construction of plants.
Projected Demand Growth
The potential for power shortages
reflects the robust pace of growth in
electricity consumption in the GCC
countries and the wider Middle Eastern
region. Electricity use has increased at
a near double-digit level since the sec-
ond half of the 1990s, and is projected
to grow at a similar level over the next
decade or so at least.
For instance Bahrain is projecting
average growth of 8% a year to 2020,
while the UAE has projected 9% annual
growth to the same year. Kuwait sees
average growth of up to 9% a year to
2015, somewhat below the 10.8% an-
nual increase anticipated by Qatar to
the same year, while Oman is positing a
10% annual increase to 2014 and Saudi
Arabia a similar 10% increase to 2017.
The high past and projected growth
rate is partly due to the very low prices
paid for electricity by many of the re-
gion’s residential consumers. This has
led to burgeoning growth in electric-
ity use to operate air-conditioners and
other domestic appliances.
The introduction of higher prices
would slow or even reverse the rate of
growth in household electricity con-
sumption if governments were to reduce
subsidies and require residential power
users to pay economic tariffs. But pres-
ent indications are that this is unlikely
to occur, especially in those countries
with access to petrodollars. And even if
it did occur, industrial and thus overall
electricity demand is likely to continue
growing strongly.
This is because Middle Eastern gov-
ernments are acutely aware that their
hydrocarbon resources can yield added
value if the oil and gas is not export-
ed as a raw material but used either
directly or as electricity in the local
processing and manufacture of goods.
This has led to large-scale investment
in electricity-intensive projects such as
petrochemical plants, steelworks and
aluminum smelters.
The latter industry is a good example,
not least since electricity can account
for about 40% of smelting costs. And
aluminum smelters are proliferating in
the GCC and wider region.
November 2009 insight 13
electricity
Some of the smelters have been around
for decades. In Bahrain, Aluminium
Bahrain’s 830,000 metric tons (mt) a
year smelter is powered by a 2,150-MW
gas-fired power complex near Sitra which
was built in four stages from the 1970s.
Also developed in stages was the Dubai
Aluminium Company’s integrated com-
plex near Jebel Ali in Dubai, which by
2006 comprised an 860,000 mt/year
smelter and a 1,750-MW power plant.
Also part-owned by Dubai Alumin-
ium in the UAE is a 700,000 mt/year
smelter and 2,000-MW power project
at Taweelah in Abu Dhabi. Developed
through the project company Emirates
Aluminum, the complex is scheduled
for operation from 2010.
The same year is due to see the com-
missioning of Qatalum’s 1,350-MW
gas-fired power project and 585,000
mt/year smelter at Mesaieed in Qatar.
And ahead of both these 2010 proj-
ects, the Sohar Aluminum Company
in Oman has recently commissioned
a 1,000-MW project in tandem with a
350,000 mt/year smelter.
All of these operating and construct-
ing projects could be dwarfed by the
integrated smelter and power project
being developed in stages at Jazan Eco-
nomic City in Saudi Arabia by a consor-
tium including the local Saudi Binladin
Group, Malaysia’s MMC Corporation
and China’s Chalco. To host a 4,860-
MW power project once fully built, the
first stage of the project will include a
2,460-MW power plant scheduled for
operation from 2012.
Saudi Arabia is also home to an in-
tegrated project comprising a 1.6 mil-
lion mt/year aluminum refinery and a
720,000 mt/year smelter being devel-
oped at Ras Al Zour by the local Ma’aden.
Originally planned to include a 1,600-
MW oil-fired captive plant, it may now
draw power from a 2,400-MW state-run
project being developed in the area.
Add in the electricity needs of petro-
chemical and other industrial projects,
not to mention the large and often-
increasing amount of power needed to
produce the region’s oil and gas, and
the high projected growth in GCC
and wider regional electricity demand
is largely explained. For instance, Sau-
di Arabia has projected that the 169.3
TWh of power it consumed in 2006
will rise to 572 TWh in 2032, while in-
stalled capacity of 39,242 MW in 2008
is projected to rise to 140,000 MW by
2032. In the somewhat nearer term, the
state-controlled Saudi Electricity Com-
pany has projected that peak demand
will rise from 41,043 MW in 2009 to
75,155 MW in 2020.
Meanwhile Qatar, which had 3,660
MW of operational capacity in 2006, is
projecting that it will need 16,260 MW
of new plant from 2011 to 2036 on top
of the additional capacity built between
2006 and 2010. And the UAE projects
-3
-2
-1
0
1
2
3
4
5
6
7
North America Central/
South America
Europe/
Eurasia
Africa Asia Pacific Middle East World
p
e
r
c
e
n
t
a
g
e
1. Primary energy consumption by region, 2008 compared with 2007.
Source: BP Statistical Review of World Energy 2009
14 insight November 2009
electricity
that the 16,760 MW of capacity installed
in 2006 will rise to 40,858 MW by 2020.
The projections of those countries
whose forecasts extend less far into the
future are also indicative of the scale of
the needs. Oman, for example, is pro-
jecting that the demand of 13.9 TWh
recorded in 2006 will almost double to
27.5 TWh as early as 2014.
And the growth bonanza is not lim-
ited to the GCC countries. Iraq, for ex-
ample, anticipates strong growth in fu-
ture demand on top of the fact that the
6,000 MW of capacity available in mid
2009 is well below existing demand of
more than 10,000 MW. In early 2009
the country thus signed agreements
to purchase more than 10,000 MW of
generating equipment as the first stage
of government plans to quadruple in-
stalled capacity by 2015.
Meanwhile neighboring Iran is plan-
ning to add a large amount of capac-
ity to satisfy unmet existing demand,
meet future requirements and replace
aging generators. In this regard the
South Korean construction company
Doosan Heavy Industries recently said
that “the Iranian power generation
market is embracing a flurry of proj-
ects to construct new combined-cycle
power plants due to the deterioration
of existing power plants.”
Needed: Capital and Fuel
The new capacity and the associated
expansion of the region’s transmission
and distribution networks projected by
the region’s governments and power
utilities will require a very considerable
amount of capital. The International
Energy Agency (IEA) in its World Energy
Outlook 2008 projected in its reference
scenario that $158 billion of invest-
ment would be required by the Middle
East power generation and wires sector
from 2007 to 2015, with $59 billion of
the total being for generating plants.
The IEA went on to project that from
2016 to 2030 the regional electricity
sector would need a further $352 bil-
lion of investment. This would include
$135 billion for generating plants and
$217 billion for transmission and distri-
bution systems.
Apart from a considerable amount of
capital, the new capacity needed to meet
the projected growth in demand will
need a considerable amount of fuel.
Middle Eastern electricity was tradi-
tionally generated almost entirely from
oil. Baseload power was produced from
crude oil or heavy fuel oil burnt in large
steam turbine plants, while diesel and
other lighter oil products provided the
feedstock for peaking plants and small-
er, isolated grid systems.
That was followed in the 1990s by a
switch to the use of natural gas in more
efficient plants as oil prices increased
and resources depleted. Over the past
decade, gas used in combined-cycle and
other plants has taken over from oil in
many areas. According to the IEA, 380
TWh, or 56%, of the region’s 681 TWh
of power needs in 2006 were generated
from gas, with 240 TWh coming from
oil and the remaining 8% coming from
coal and hydroelectric plants.
However, there is increasing competi-
tion for the region’s gas. It is required for
export as liquefied natural gas (LNG) or
through pipelines, for use as feedstock
in the petrochemical and other indus-
trial sectors, and for reinjection to en-
hance oil recovery.
Gas use for power generation has thus
come into question. This is especially
true in countries with limited indig-
enous resources and where alternative
supplies are not available from regional
pipelines such as Dolphin Energy’s sys-
tem, which links Qatar with Oman and
the UAE, or from the LNG imports pro-
posed in, for instance, Kuwait.
This has led to a reversion to oil use in
a few areas. For example, the Saudi Ara-
bian authorities require that new power
plants in some parts of the country are
fired with heavy crude or heavy fuel oil
to conserve gas reserves. But the question
mark over gas has also spawned interest
in the use of coal, nuclear, renewable and
alternative energy sources to help meet
the region’s future power needs.
Coal to the Rescue?
The Middle East has sparse coal re-
sources. There is limited production
and consumption of indigenous coal,
November 2009 insight 15
electricity
with Turkish and Iranian use of locally
mined coal for power generation being
exceptions. But as gas prices rose from
the mid 2000s a number of Middle
Eastern countries examined the option
of importing coal.
Oman is one such country. In the mid
2000s a consortium comprising the lo-
cal Oman Oil Corporation with South
Korea’s LG Energy and Korea Southern
Power commissioned studies by consul-
tants John T Boyd and PB Power on coal
mining and power projects, respective-
ly. Based on these studies the consor-
tium sought to undertake an integrated
mining and power project on the basis
of direct negotiation with the power au-
thorities. But in April 2008 the govern-
ment decided to award the country’s
first coal-fired project through an open
competitive tender.
The state-run Oman Power and Water
Procurement Corporation is thus plan-
ning to tender a 1,000-MW to 1,200-
MW coal-fired IPP project at Duqm for
operation from 2015. Technical and fi-
nancial advisory contracts on the proj-
ect were awarded to WorleyParsons and
KPMG, respectively in September 2009.
Several other jurisdictions have ex-
amined the coal option, especially in
the UAE. For instance a 1,000-MW
coal-fired IPP project at Ajman is being
developed by Malaysia’s MMC Utili-
ties under an agreement signed in July
2008. The project would operate under
a 20-year concession with the cost be-
ing estimated at $2 billion.
A separate coal-fired plant is planned
at Ras al Khaimah, another of the north-
ern emirates. Through a special purpose
vehicle, Middle East Coal, the state-run
RAK Investment Authority bought eq-
uity in an Indonesian coal mining proj-
ect in early 2009 to provide fuel for the
Mina Saqr project. In the first instance
this is planned to have 600 MW from
2011, but it could eventually host up to
4,000 MW of capacity.
In Dubai a 2,000-MW gasified coal-
fired combined-cycle plant was under
consideration in 2008 when the state-
owned Dubai Electricity & Water Au-
thority signed a memorandum of un-
derstanding relating to the project with
a consortium of local and Chinese com-
panies. Meanwhile in neighboring Abu
Dhabi a clean coal technology-based
power plant costing $1 billion was be-
ing studied by Taqa in 2007.
Renewable and Nuclear Prospects
Abu Dhabi’s interest in clean coal
technology reflects its wider focus on
renewable and alternative energy proj-
ects. The Abu Dhabi Future Energy
Company (Masdar) is responsible for
promoting renewable and new energy
projects, with one of its first projects be-
ing a 10-MW solar photovoltaic plant at
North America Central/
South America
Europe/
Eurasia
Africa Asia Pacific Middle East World
p
e
r
c
e
n
t
a
g
e
-2
-1
0
1
2
3
4
5
6
2. Electricity consumption by world region, 2008 compared with 2007.
Source: BP Statistical Review of World Energy 2009
16 insight November 2009
electricity
Masdar City. Developed through a joint
venture with Germany’s Conergy, the
project was commissioned in 2009.
Masdar is also promoting at least
500 MW of concentrated solar capac-
ity through 100-MW projects. The 25-
year concession for the first scheme, a
parabolic trough-based project at Ma-
dinat Zayad known as Shams-1, was
tendered on a build, own and oper-
ate basis in 2008 with four bids being
received. But the high-priced bids led
Masdar to look at relocating the plant
and tendering it again.
Beyond the solar business, Masdar
is developing a 390-MW hydrogen-fu-
eled power project through Hydrogen
Power Abu Dhabi, a joint venture with
Hydrogen Energy, which comprises
the UK’s BP Alternative Energy and
Rio Tinto. The project will incorporate
CO
2
capture and storage in producing
oil fields. A final investment decision is
currently targeted for the third quarter
of 2010 with initial operation envis-
aged from 2013.
Several other countries in the region
have ambitious plans for renewable and
especially solar energy. For instance in
Qatar the state-run Qatar General Elec-
tricity and Water Corporation said in
2008 that solar plants should account
for 4,500 MW of the 16,260 MW of
the new capacity it projected as needed
from 2011 to 2036. The capacity would
be installed in 500-MW complexes.
Meanwhile in Oman a 2008 study
sponsored by the Authority for Electric-
ity Regulation and undertaken by con-
sultants Cowi and Partners proposed
the establishment of large-scale solar
thermal plants and up to 750 MW of
wind turbine capacity in the south of
the country. The tender for a 200-MW
solar thermal project was under consid-
eration in 2009.
Apart from renewable energy, nuclear
power is in the frame as a long-term so-
lution for the electricity requirements
of many Middle Eastern countries.
Iran’s highly-contentious nuclear pro-
gram started much earlier than most,
and has since hogged most of the head-
lines, but it is far from the only regional
country with nuclear aspirations.
The UAE in general and Abu Dhabi
in particular have travelled well down
the road to nuclear generation. In 2008
the UAE forecast that it would require
40,858 MW of capacity by 2020, with
30% projected to be nuclear plants.
Abu Dhabi is planning to develop nu-
clear capacity on the basis of joint local
and foreign ownership in line with its
IWPP model. Sites on the coast between
Abu Dhabi and Ruwais and in Fujairah
were investigated from 2008, with con-
struction of the first four reactors then
scheduled to begin by 2012 and opera-
tion planned from 2017.
In April 2009 three consortia were
prequalified for the foreign equity stake
including France’s GdF Suez Energy
International, Areva and Total; Japan’s
Hitachi with the US’s GE Energy; and
South Korea’s Korea Electric Power with
Hyundai Engineering & Construction.
The $41-billion project contract was
said to be near award at the time of
writing (early October).
Trading Power, Sourcing Kit
The Middle East’s burgeoning elec-
tricity demand will be met not only by
building more generating plants within
each country but also by trading elec-
tricity between countries to take advan-
tage of differing national load patterns.
As a first step the GCC Grid Intercon-
nection Authority is connecting the
grids of the six GCC countries through
a three-stage project due to be complet-
ed in 2010. The $1.25-billion project
involves 5,000 MW of potential elec-
tricity flows regulated by a power ex-
change and trading agreement signed
in July 2009 by all six countries apart
from Oman.
The GCC project could be followed
by the gradual interconnection of elec-
tricity systems in the wider region and
beyond. But meeting the projected de-
mand will still require the construction
of a large amount of additional generat-
ing plant.
This is expected to include a substan-
tial amount of renewable and nuclear
capacity as well as some coal and oil-
fired plant. But meeting the region’s
power needs will still need a substantial
November 2009 insight 17
electricity
amount of additional gas-fired plant.
And, as already noted, the fueling of
this capacity could have a significant
impact on the availability and price of
gas for other uses.
There is little question that this will be
one of the key issues facing the Middle
Eastern power and wider regional en-
ergy sector for decades to come. In this
context, increasing the efficiency of gas-
fired generating plant—getting more
kilowatt-hours per Btu—is an important
concern for the region’s power utilities.
The efficiency issue is also important
because power plant equipment and
construction costs have tended to be
significantly higher in the Middle East
than elsewhere. Middle Eastern power
plants have traditionally been “gold-
plated” facilities built and equipped
by leading US, European, Japanese and
South Korean companies. Chinese, Indi-
an, Russian and other suppliers of often-
cheaper equipment and construction
services have made limited inroads.
While the high cost per kilowatt of
regional generating projects partly re-
flects indigenous factors such as high la-
bor and other input costs, it also reflects
stringent qualification criteria which
have in turn resulted in a limited pool of
eligible equipment and contractors. Not
only do these tend to be more expen-
sive per se, but from the mid 2000s the
substantial number of projects chasing
a limited number of contractors made
for even more expensive plants.
In some recent tenders there appears
to have been greater acceptance of
non-traditional sources of equipment
and services. This has been assisted
by the improving quality and perfor-
mance of, for instance, the main Chi-
nese and Indian equipment suppliers
and contractors.
The likelihood is thus that there will be
some shift in the sourcing of power plant
equipment with a possible reduction in
unit costs. But the Middle East appears
likely to remain a high cost region.
The Inevitability of Competition?
The substantial amount of invest-
ment required by the regional power
sector means that capital will in all
probability continue to be sourced from
both state coffers and from private in-
vestors and lenders. But perhaps the
biggest question mark over the future
shape and direction of the Middle East-
ern power sector is whether that private
involvement will remain limited to IPP
and IWPP projects operating under the
single buyer model, or whether the re-
gion goes further down the liberaliza-
tion route and embraces competitive
electricity generation and supply.
Given the generally conservative na-
ture of Middle Eastern economic ac-
tivity, a move to merchant generation
and contestable consumers might seem
improbable any time soon. In particu-
lar, to have any real meaning a move
to competitive electricity supply would
require a shift to cost-reflective retail
tariffs, which would be unlikely to be
politically popular.
But given the cost of subsidizing pow-
er use, retail tariff hikes are not out of
the question. And wholesale competi-
tion between generators would not nec-
essarily impact on retail prices and thus
may prove easier to adopt.
Some Middle Eastern countries have
in fact already prepared detailed road-
maps for the transition to a more com-
petitive market. Most notably, the priva-
tization and liberalization of the Saudi
Arabian power market is planned.
The country’s state-run Electricity
and Cogeneration Regulatory Authority
(ECRA) said in 2008 that a three-phase
program was under consideration. This
would see the state-controlled Saudi
Electricity become a holding company
from 2010 with its power plants being
unbundled into four generating com-
panies and its transmission assets be-
ing transferred to the proposed Saudi
Grid Company. ECRA envisaged that
at least three of the generating com-
panies would be privatized, while the
grid company might either seek a stra-
tegic partner or tender out projects on a
build and lease basis.
A second phase of the program run-
ning to 2013 would involve the intro-
duction of wholesale competition and
a spot market. It would also involve
the corporatization and possibly sale of
18 insight November 2009
electricity
Saudi Electricity’s distribution and sup-
ply assets in the ECRA blueprint.
The third phase from 2013 to 2016
would involve the full introduction of
wholesale competition and the start of
retail competition, according to ECRA.
While the timetable attached to the
Saudi Arabian liberalization program
may prove ambitious, the radical na-
ture of the program in one of the re-
gion’s more conservative jurisdictions
is indicative of the wider potential for
change. And as the Middle Eastern
power market becomes more intercon-
nected, and fueling and technology
issues become increasingly pressing, it
seems likely that the pressure to intro-
duce competition into the wholesale
market will grow as a way of securing
cost and efficiency gains.
Regardless of the various question
marks, one thing is clear—going for-
ward the Middle Eastern electricity
sector will require close attention both
from power industry players and the
wider energy community. ■
Table 1. Financed IPP and IWPP projects in GCC countries by year of operation.
Source: Platts, based on national and company data
Note: IPP = independent power producer, IWPP = independent water and power producer, AE = acquire and expand, oc = open cycle, cc = combined
cycle, st = steam turbine, g = natural gas, o = oil, Taqa = Abu Dhabi National Energy Corp, IP = International Power, QEWC = Qatar Electricity & Water Co,
GDF = GDF Suez Energy International, GIC = Gulf Investment Corp.
Country Project Type and fuel mw migd Op $m Key investors
Oman Manah-1 IPP (oc-g) 90 - 1996 216 MENA Infrastructure
Oman Manah-2 IPP (oc-g) 180 - 2000 104 MENA Infrastructure
UAE Taweelah-A2 IWPP (cc-g) 720 50 2001 541 Taqa, Marubeni
Oman Kamil IPP (oc-g) 285 - 2002 133 IP
Qatar Ras Abu F-1 IPP (oc-g) 377 - 2002 213 QEWC
Oman Salalah IPP-AE (oc-g) 242 - 2003 270 Dhofar Power
UAE Taweelah-A1 IWPP-AE (cc-g) 1,360 84 2003 1,473 Taqa, Total, GDF
Oman Barka-1 IWPP (cc-g) 427 20 2003 455 AES
UAE Shuweihat-1 IWPP (cc-g) 1,500 100 2004 1,636 Taqa, IP, Sumitomo
Qatar Ras Laffan-A IWPP (cc-g) 756 40 2004 700 AES, QEWC
Oman Sohar IWPP (cc-g) 585 33 2007 620 GDF
Bahrain Ezzel IPP (cc-g) 950 - 2007 500 GDF, GIC
Bahrain Hidd IWPP-AE (cc-g) 910 90 2007 1,250 IP, GDF, Sumitomo
Qatar Ras Abu F-2 IPP (cc-g) 597 29 2007 623 QEWC
UAE Umm al Nar IWPP-AE (cc-g) 2,450 94 2007 2,116 Taqa, IP, Tepco, Mitsui
UAE Taweelah-B IWPP-AE (cc-g) 1,973 157 2008 2,900 Taqa, Marubeni, Tanjong
Qatar Ras Laffan-B IWPP (cc-g) 1,025 60 2008 900 QEWC, IP, Chubu
Oman Barka-2 IWPP-AE (cc-g) 678 26 2009 800 GDF, Mubadala
Saudi Shoaiba-3 IWPP (st-o) 917 195 2009 2,460 Malakoff, TNB, Acwa
UAE Qidfa IWPP-AE (cc-g) 880 100 2009 1,360 Taqa, Sembcorp
Qatar Mesaieed IPP (cc-g) 2,000 - 2010 2,400 Marubeni, Chubu
Saudi Shuqaiq IWPP (st-o) 1,020 47 2010 1,870 Mitsubishi, GIC, Acwa
Saudi Jubail IWPP (cc-g) 2,750 210 2010 3,443 GDF, GIC, Acwa
UAE Fujairah-2 IWPP (cc-g) 2,000 130 2010 2,800 Taqa, IP, Marubeni
Bahrain Al Dur IWPP (cc-g) 1,234 96 2011 2,100 GDF, GIC
UAE Shuweihat-2 IWPP (cc-g) 1,500 100 2011 3,200 Taqa, GDF, Marubeni
Qatar Ras Laffan-C IWPP (cc-g) 2,730 63 2011 3,800 GDF, Mitsui, Chubu
Saudi Rabigh IPP (st-o) 1,200 - 2013 2,700 Kepco, Acwa
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20 insight November 2009
Market observers had expected 2009
to be a bearish year for liquefied natural
gas (LNG). Increased unconventional
gas production in the US had already
knocked back imports in 2008, while a
wave of new gas liquefaction capacity
was due to come onstream worldwide.
In some ways, the observers have been
proven right, at least insofar as prices
have come down. US Henry Hub front
month prices have fallen back from
above $8.00/MMBtu in July 2008 to
trade below $3.00/MMBtu in September
2009, while the front month at the UK’s
National Balancing Point (NBP) has seen
an even more dramatic fall, from above
$14.00/MMBtu in September 2008 to
below $4.00/MMBtu in 2009.
Spot prices for LNG followed suit.
While LNG is a price taker in the At-
lantic basin, in Asia Pacific it also re-
sponds to local fundamentals. A loss
of Japanese nuclear output in 2007 had
raised gas demand for power genera-
tion, while new consumers and robust
economic growth among traditional
buyers kept demand buoyant across the
region into late 2008, and spot buyers
paid upwards of $20.00/MMBtu.
By summer 2009, spot LNG prices
had fallen considerably. Platts’ Japan
Korea Marker (JKM), an assessment of
prices for spot cargoes delivered in the
forward month to Japan or Korea, fell to
under $4.00/MMBtu in May, dipping
below NBP hub prices in the UK.
But while the market had expected a
supply-driven fall in prices, in the end
much of that supply did not appear.
“In fact global liquefaction is lower
this year so far than it was at the same
time last year, and it looks like it will
finish, if not lower, then only a little
above last year or flat,” Keith Barnett,
director of global commodities strat-
egy analysis at Merrill Lynch, said in
liquefied natural gas
The Great LNG Bear
of 2009, and Its
Approaching Sequel
Jonty Rushforth, Senior Asia LNG Editor, Platts LNG
Source: Getty Images
November 2009 insight 21
liquefied natural gas
September. He points to “significant
problems” at plants in Nigeria, produc-
tion cuts in Algeria, and “lesser prob-
lems with Asian production.”
And LNG production units, or
trains, have been slower to come on
than expected, Barnett says. “Why
hurry to bring production online, and
pay overtime, in the current pricing
environment?”
Low production was evident by the
summer, when Anglo-Dutch major
Shell reported a 6% year-on-year drop
in LNG production worldwide for its
second quarter results. Shell saw both
sides of the supply situation, as it has
equity in new capacity that came on-
stream in Russia and Australia, but also
saw LNG output from Nigeria plummet
due to upstream problems. Excluding
Nigeria, Shell’s equity production was
up 7% year on year in the second quar-
ter, it said.
Fellow major ExxonMobil, which
does not strip out LNG from the broad-
er gas picture in its quarterly results,
said in July that its average gas produc-
tion in the second quarter was down
5.6% year on year, to 8.013 million
cubic feet per day. The company said
that “new production volumes from
project additions in Qatar, the United
States and the North Sea were more
than offset by field decline and lower
European demand.”
So if supply has dropped back, what
has pulled down prices? “For LNG, it’s
primarily been down to a big drop in
consumption in Japan, Korea, Taiwan,
and to some extent Spain,” John Harris,
director for global LNG at Cambridge
Energy Research Associates (CERA),
says. “European demand has also suf-
fered from the economic downturn.
The US has suffered from supply side
weakness, but demand has also been
hit there … On the whole, price has
been demand-led this year.”
Total Asian LNG imports were al-
ready looking lower year on year in the
last quarter of 2008, although in Janu-
ary 2009 they again showed an annual
increase, of 452,175 metric tons (mt), or
4.4%. But from then on the decline be-
gan in earnest, reaching a peak annual
rate of 18.7% in May, a drop of 1.77 mil-
lion mt over the previous year.
Liquefaction trains are not easily
turned down; analysts say there is tol-
erance for perhaps a 5% reduction in
output, but not much more. So the
fall in previously anticipated Asian
1
2
3
4
5
6
7
8
9
10
2-Feb 2-Mar 6-Apr 4-May 1-Jun 6-Jul 3-Aug 7-Sep
$
/
M
M
B
t
u
Algonquin City Gate Fwd Mo LNG Japan/Korea Marker UK NBP Fwd Mo
SoCal Fwd Mo France PEG Fwd Mo
1. Global gas prices, 2009.
Source: Platts
22 insight November 2009
liquefied natural gas
requirements had to be otherwise ac-
counted for.
In 2008 Asian buyers had attracted
some spot and short-term cargoes across
from the Atlantic basin by paying sig-
nificant premiums to gas hub prices. As
spot interest fell back in 2009, the Asian
premium disappeared. “Asian buyers
are not paying as much for LNG,” says
Chris Holmes, vice president at Purvin &
Gertz. “They want hub prices, so we’ve
seen LNG prices come down. There’s no
reason why people should pay the high
prices they paid last year.”
With no premium in Asia Pacific, most
Atlantic cargoes stayed west. Between
April and July 2008, Japan received
2.1 million mt of LNG from Trinidad,
Algeria, Egypt, Nigeria, and Equatorial
Guinea. In the same period a year later
it received just 342,306 mt from Nigeria
and Equatorial Guinea, and none from
the other producers.
But even after cutting out the cross-
regional imports, Asian buyers still need-
ed to cut back. They used contractual
“downward quantity tolerance” clauses,
which typically allow drops of 5-10%
in term supplies. That in turn left Asian
producers with spare product. With no
interest locally, they turned to European
markets, and prices reflected that switch
in focus. The JKM was flat to the UK’s
NBP, or showed a discount, for much of
the second quarter of 2009.
With the LNG heading west, the UK
in particular saw a rapid rise in imports,
facilitated by the commissioning of two
major new regasification terminals and
the expansion of an existing one. NBP
prices fell back, and so the few buyers
left in Asia reduced their own price ex-
pectations as a result. A Japanese nucle-
ar outage provided some relief for sup-
pliers, followed by a gradual economic
recovery in traditional Asian markets,
but spot prices struggled to climb much
above $5.00/MMBtu.
Takayuki Nogami, senior economist
for global oil and gas markets at Japan
Oil, Gas and Metals National Corp
(JOGMEC), summarizes the situation:
“Asia Pacific demand has plunged, with
a double-digit drop, due to the reces-
sion. Buyers have reduced imports, LNG
spot markets in the Atlantic Basin are
bearish, and some new LNG supply has
come on stream, flooding the market.
That left regional spot prices at $4.00-
5.00/MMBtu DES [delivered ex-ship] in
Asian markets.”
That is not to say that all is lost and
prices will tumble to all-time lows,
however. In fact, Asian spot prices
seem to have stabilized at about the
level Nogami identifies. One reason for
that is that the low prices have brought
in opportunistic buyers. China, with
two new terminals starting up in 2009,
has seen annual import growth every
2
4
6
8
10
12
m
t

m
i
l
l
i
o
n
s
China South Korea Taiwan Japan India
1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09
2. Total Asian LNG imports, 2008-9.
Source: Platts
November 2009 insight 23
liquefied natural gas
month this year. And India reached its
highest ever monthly import volume,
at 1.04 million mt, in March, when
much of the rest of the region was see-
ing severe declines.
For both countries, spot LNG is con-
siderably cheaper compared to alterna-
tive fuels, namely naphtha in India and
fuel oil in China. Both of those alterna-
tives have risen steadily since the start
of 2009, with fuel oil FOB Singapore
at around $10.00/MMBtu in the sum-
mer and naphtha CFR Japan as high as
$15.00/MMBtu.
CERA’s John Harris says that since
those buyers have already been brought
into the market, lower prices would not
attract any more demand for LNG in
Asia: “Spot buying has been a reflec-
tion of low spot prices. If prices were
any lower, you wouldn’t see any more
demand.” He adds that “sellers are go-
ing to be inclined to look at alternative
fuels and extract that value.”
By the third quarter, there were also
signs of some recovery in demand in
the traditional LNG markets. Taiwan’s
CPC issued a tender in September for
three spot cargoes after staying out of
the market for several months. Trad-
ers began talking of some spot demand
from South Korea as well, although for
only for a few cargoes.
So could the slight signs of recovery
in demand from the traditional mar-
kets, combined with opportunistic buy-
ing from new markets, pull prices back
up in 2010? Merrill Lynch’s Keith Bar-
nett thinks not: “I really don’t see any-
thing that can turn the market around.
A miraculous recovery in north Asian
countries could take some of the pres-
sure off, but otherwise it’s going to be a
grind as it works out.”
The problem is that the effect that
everyone was waiting to see in 2009 is
likely to finally come through in 2010
instead. The “missing gas” is heading
inexorably towards the markets. An-
drew Pearson, head of LNG research
at Wood Mackenzie, says: “New LNG
supply projects have begun to start up,
although it will be next year before
this new volume has its full impact
on the market. Next year we will see a
big increase in LNG trade as these new
plants ramp up.”
Already new trains have started up in
2009 in Russia, Indonesia, Yemen and
Qatar, with more trains scheduled to
follow in Yemen and Qatar, and a new
project in Peru, in 2010. Of those that
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24-Mar 7-Apr 21-Apr 5-May 19-May 2-Jun 16-Jun 30-Jun 14-Jul 28-Jul 11-Aug 25-Aug 8-Sep 22-Sep
$
/
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M
B
t
u
Qinhuangdao Coal Minas FOB Indonesia FO 180 FOB Spore
Naphtha CFR Japan LNG Japan/Korea Marker
3. Oil products vs JKM.
Source: Platts
24 insight November 2009
liquefied natural gas
have started, some have ramped up pro-
duction slowly, but could be at full ca-
pacity in 2010. And it is possible that
production problems in Algeria and Ni-
geria could be resolved by 2010, adding
further supply.
Takayuki Nogami at JOGMEC says
that with “the new supplies coming on,
in addition to those which started this
year, LNG fundamentals will be quite
anemic in 2010, too.” He sees spot gas
prices in the US and UK in “a low range
of $3.00-5.00/MMBtu,” with spot LNG
“somewhat at the same level as natural
gas spot prices in the US and UK, re-
flecting weak fundamentals.”
The problem is that the new LNG
coming in has to go somewhere, and
the traditional markets are already
struggling to absorb the excess this
year, before the new wave really im-
pacts. There are new terminals, such
as those in China and India, and new
floating terminals in Kuwait and South
America. But these may not make much
of a difference. Purvin & Gertz’ Holmes
says the new terminals are “marginal.”
He adds: “What’s coming on in produc-
tion far outweighs that. There’s tens of
millions of tons coming on.”
Some of the excess in 2009 has head-
ed to Europe, and that trend could
continue in 2010. But Europe began
2009 with low LNG storage levels af-
ter Russian pipeline gas flows through
Ukraine were cut in the winter. That
created a widespread need for gas
throughout the summer, but there’s no
guarantee that the same circumstances
will occur in 2010.
And for Europe to take any more
gas, pipeline suppliers would need to
cede market space to LNG producers,
with little obvious incentive. The Eu-
ropean suppliers provide gas on con-
tracts linked to oil prices, which have
remained comparatively high relative
to spot gas, while any excess LNG head-
ing to the continent would have to take
the relevant hub prices. In a contest be-
tween the two supply sources, the home
team will have the advantage.
But instead, several commentators
think the bulk of any 2010 excess will
head to the US, where there is ample
spare import capacity. Harris says that
if the supply that had been expected
had appeared this year, “we would
have seen much more of it go to the
US.” “With the startup of new projects
in the months ahead, we should see
much more go to the US,” he adds.
The US also has a more diffuse and
flexible domestic gas market. “At the
end of the day, the US has the largest
most liquid storage capacity to take it,”
says Keith Barnett at Merrill Lynch.
“And it also has the shortest investment
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M
B
t
u
FO 180 FOB Spore LNG Japan/Korea Spot Crg DES S Korea LNG average import price
4. Fuel oil vs term, spot LNG.
Source: Platts
November 2009 insight 25
liquefied natural gas
cycles for [exploration and production].
So LNG sellers can pummel the US pro-
ducers for a year or two, and then the
producers can pick up the pieces af-
ter that. For these billion-dollar LNG
projects, you can’t really turn them
around—it’s like a supertanker versus a
Smart car.”
For excess LNG in 2010 to head to the
US, either European import capacity
would have to be full, or prices would
have to favor the west Atlantic. Particu-
larly during the summer, import capac-
ity is unlikely to be fully used, which
leaves price incentives as the likely mo-
tivator. And that means that the price
for excess LNG worldwide would be set
by Henry Hub values.
NYMEX futures have already fallen
significantly in the last year and more,
dropping steadily from the $13.577/
MMBtu high recorded on July 3, 2008.
At the time of writing (early October)
front month futures had recovered
from the September lows of mid 2s to
hit $4.00/MMBtu, but this is still a rela-
tively low number.
Could NYMEX prices recover in the
year ahead? One factor that analysts
have focused on is the US drilling rate,
which has declined in 2009 as prices
have fallen back. The theory is that
that will mean lower production and
hence higher prices. “Many analysts
are putting their hopes on that, that
it will push prices up to $7.00/MMB-
tu in the last half of 2010,” says Keith
Barnett. But he adds: “I’m not one of
those people.” He points out that as
domestic producers pull back, LNG
moves in. And LNG producers may be
willing to accept extremely low prices
before they blink.
Unlike unconventional gas produc-
tion in the US, much of which is dry,
non-associated shale gas, LNG pro-
duction worldwide is often associated
with liquids production. Because those
liquids—condensate and LPG—attract
relatively high prices compared with
methane, the projects can keep pro-
ducing even when they receive little
income for the LNG itself. For projects
such as Qatar’s RasGas and Qatargas,
and Australia’s North West Shelf, it is as
if LNG production had zero cost.
“Essentially shipping is the margin-
al cost, so prices can be pushed down
quite low before there’s any incentive
to stop producing,” Chris Holmes at
Purvin & Gertz says. Just how low is
“quite low”? “If Henry Hub went below
$2.00/MMBtu, you would struggle to
send LNG to the US, certainly from the
Middle East,” he says.
A floor of $2.00/MMBtu may be scant
comfort to producers, and there is more
bad news on the upside. Although US
5
10
15
20
25
30
Winter 10/11 Winter 09/10
1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 9/09 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09 8/09
5. NBP Winters in $/MMBtu as a percentage of Dated Brent.
Source: Platts
26 insight November 2009
liquefied natural gas
gas producers have been pushing pro-
duction back, analysts say the trend of
late has been to drill wells in prepara-
tion for any market turnaround. Bar-
nett says: “There are as many as 1,000
wells that have not been completed, and
could be started up in as little as three
months. They’re drilled and cased, but
not perforated and fractured.” Any US
price rise would likely be met by a rapid
production response, likely keeping a
lid on prices.
So hub prices are likely to remain in
the $2.00-4.00/MMBtu range we have
seen this year. Spot LNG prices in Asia
Pacific might be somewhat above that
if there were localized demand, but few
analysts see potential for spot LNG to
climb back to even early 2009 levels.
JOGMEC’s Takayuki Nogami says there
is a “low probability of prices at $7.00-
8.00/MMBtu, barring a severe winter
storm,” while CERA’s John Harris says
Asian LNG prices will be “between
Henry Hub and oil.”
The 2010 price picture therefore looks
like a reproduction of 2009, but with
different drivers. Whereas this year saw
a collapse in demand pushing prices
lower, the following year will see sup-
ply pressuring prices. Any uptick in de-
mand in Asia Pacific is likely to be eas-
ily met by the increase in LNG supplies,
with buyers bidding against a weak
Henry Hub price, and any unmet At-
lantic demand fed by the uncompleted
US wells.
That outlook could hold true beyond
2010. Andrew Pearson at Wood Mack-
enzie says that for the Pacific basin “our
view is that the market should stay soft
for the next few years, until the new
wave of supply, currently coming on-
stream, is absorbed into the market.”
There is a postscript to that picture,
however. While spot LNG prices have
bounced along a bottom in 2009,
producers selling LNG on long-term
contracts have had the benefit of oil
indexation. Nogami says that if crude
prices fell back to $40-50/barrel, term
LNG prices would be $7.00-8.00/
MMBtu. But if they maintain “their
current momentum,” prices would
rise to $10.00/MMBtu.
LNG projects tend to sell most out-
put under term contracts, so the low
price environment will not be hitting
LNG producers as much as might be
expected, and certainly not as much
as those US producers who take Henry
Hub pricing.
But that disconnect between spot
and term LNG pricing may have an
impact beyond the current downturn.
Pearson points out that the last few
years saw very few LNG projects sanc-
tioned, whereas this year and next
“look more encouraging.” Australia’s
giant Gorgon project has already been
sanctioned in 2009, while a string of
LNG projects in Papua New Guinea
and several coal seam gas-based proj-
ects in Australia are heading towards
final investment decisions in the next
year or so.
Pearson says that the first wave of this
new supply will still attract “close to oil
parity pricing, probably around 14-15%
of JCC,” referring to the Japanese Crude
Cocktail benchmark. But it will be “the
projects at the back end of the supply
curve which will be put under pressure
as the competition is intense and there
is insufficient market for all the vol-
ume,” he says.
There are already reports that one re-
cent contract has been signed with an
“s-curve shape” to protect the buyers
at oil prices not too much more than
the current price. “This is evidence
that the pendulum is swinging back
towards the buyers after many years
of a suppliers’ market,” says Pearson.
“With this, everything is up for grabs.
There’s a lot more leverage for buyers
to dictate whether they buy DES or
FOB, include caps or floors, and po-
tentially even take a stake in the sup-
ply project.”
With buyers facing yet another year
of paying close to oil prices for long-
term supplies of LNG while spot prices
reflect weak fundamentals, any in-
crease in their power is likely to mean
a significant shift towards flexibility
and a weaker oil linkage. And because
of the long lifecycle of LNG projects,
that shift will affect the market for de-
cades to come. ■
28 insight November 2009
The rush to develop renewable ener-
gy in Asia that gathered steam in 2009
seems set to continue in 2010, with
China spearheading the drive while
other Asian countries stake their claims
in the market.
China is by far the region’s largest
renewable energy producer, and the
nation’s leaders have affirmed their
commitment to expanding renewables
production. China has set the target
of securing 15% of its energy capac-
ity from renewable resources by 2020,
including 100 gigawatts (GW) of wind
power, with Premier Wen Jiabao saying
in 2009 that the government should
establish a broad strategy to foster the
wind power industry.
The potential for renewables expan-
sion is certainly abundant. China in
2008 doubled its wind energy capacity
for the fourth straight year, bringing
national capacity to 12.15 GW.
The State Grid Corporation of China
(SGCC), the larger of China’s two elec-
tric transmission and distribution com-
panies, has higher expectations of wind
power. It forecasts that the nation’s
wind power generation capacity will
increase to 35 GW by 2010 and to 150
GW by 2020, while solar power capac-
ity will increase to 1 GW by 2010 and
20 GW by 2020.
Altogether, China’s wind, solar and
nuclear power capacity will provide
more than 16% of the country’s elec-
tricity by the end of the next decade,
the SGCC said.
Other organizations also are project-
ing continued growth in China’s renew-
ables sector. The Global Wind Energy
Council, for instance, expects China to
soon overtake the United States as the
world leader in wind power capacity.
Solar power, including solar thermal
and solar photovoltaic (PV) generation,
is also thriving in China. The coun-
try currently is tied for second place
in Ernst & Young’s Renewable Energy
Country Indices, a leading indicator of
renewables investment climates, hav-
ing gained several points in the E&Y
rankings in 2009.
“This represents a marked move by
the Chinese authorities to support do-
mestic PV generation, with 2020 targets
for solar power rising to 9 GW, which is
75 times the current solar capacity of
about 120 MW. Support of PV within
the sector will also strengthen the Chi-
nese solar cell supply chain, which cur-
rently relies on exports for the vast ma-
jority of its revenues,” according to the
E&Y index.
Barriers to development remain,
however. The country’s legislature, the
National People’s Congress, is consid-
ering a draft amendment “in a bid to
remove the power transmission bottle-
neck that hinders industrial develop-
ment,” the official People’s Daily On-
line site reported. “The draft requires
renewables
New Renewable
Energy Markets Take
Shape Across Asia
David R. Jones, Editor, Platts Renewable Energy Report
November 2009 insight 29
renewables
related ministries to map out concrete
plans for meeting the country’s me-
dium-term and long-term renewable
energy targets, which should be based
on the overall national energy strategy
and available technologies.”
In some areas of China, infrastructure
is lacking to incorporate new renewable
electricity generation. The People’s Daily
Online, citing reports from the China
Wind Energy Association, said that “more
than 20% of the country’s wind power
machines did not generate any electric-
ity last year because the equipment was
not yet connected to the grid.”
The draft law would also establish a
nationwide annual purchase quota for
renewable energy sources to protect
the interests of renewable energy en-
terprises, and calls for the creation of a
government fund to support research
and development on renewable ener-
gy-related technologies and a smart-
grid system.
India comes a distant second to Chi-
na among Asian renewables markets.
Still, it boasts abundant clean energy
resources, and the government is look-
ing to vastly expand its renewable ener-
gy generation as part of the solution to
acute nationwide power shortages. In-
dia currently has nearly 15 GW of grid-
connected renewable energy plants and
another 322 MW of off-grid and dis-
tributed generation systems.
Solar power could be the country’s
next boom market. India would pro-
duce 20 GW of solar energy by 2020 as
part of the country’s strategy to tackle
climate change, under a policy endorsed
by a top government committee.
The Prime Minister’s Council for Cli-
mate Change has approved the 20-GW
target for solar power generation over
the next 11 years, and the council is
looking at still more ambitious goals to
further increase solar power use in the
coming decades. Currently, the country
has just 5 MW of off-grid and grid-con-
nected solar photovoltaic power.
Adoption of the 2020 solar energy tar-
get follows the creation of the National
Solar Mission by the council in 2008
as one of eight missions in India’s Na-
tional Action Plan on Climate Change.
The 20-GW solar target goes far beyond
the 1-GW goal for 2017 proposed earlier
under the mission.
The National Action Plan’s solar mis-
sion calls for the tapping of solar ther-
mal power and solar PV to take advan-
tage of India’s plentiful sunshine, and
notes that most parts of India experi-
ence clear, sunny weather 250-300 days
a year. Solar energy can provide both
utility-scale power production and de-
centralized, village-level generation,
which would cut losses from long-dis-
tance electricity transmission.
“Where necessary for purposes of
system balance or ensuring cost-effec-
tiveness and reliability, it would also
promote the integration of other renew-
able energy technologies, for example
biomass and wind, with solar energy
options,” according to the plan. The
strategy also called for research and de-
velopment investment to increase the
efficiency of solar cells and “improve-
ments in PV module technology with
higher packing density and suitability
for solar roofs.”
The Prime Minister’s Council cur-
rently is drafting a detailed plan which
has the target of generating 1-1.5 GW
by 2012, 6-7 GW by 2017 and 20 GW
by 2020. It is expected to initially fo-
cus on deploying solar rooftop and on-
site solar PV arrays on government and
public sector enterprise buildings, and
using vacant lands at power plants.
Key trends in Asia for 2010

Continued acceleration of renewables
in China

Growth of wind and solar power in India

Emergence of Australia, and
re-emergence of Japan, as magnets
for renewables investment

Growing interest in wind power and
biomass in southeast Asia
30 insight November 2009
renewables
Additionally, a new analysis co-au-
thored by the Global Wind Energy Coun-
cil found that the country has at least
48.5 GW of wind energy potential—and
that through repowering old wind tur-
bines with new ones and making more
land available for wind farms, India
could reach 100 GW of wind power.
The study, Indian Wind Energy Out-
look 2009, written by GWEC and the
Indian Wind Turbine Manufacturer As-
sociation, noted that the nation ranks
fifth worldwide in installed wind ca-
pacity and has a strong wind-turbine
manufacturing base, with domestic
producer Suzlon joined in recent years
by foreign companies. Wind power de-
velopment in India has been fostered
by strong state government support
measures, such as feed-in tariffs and re-
newable portfolio standards.
But “at the moment there is no coher-
ent national renewable energy policy to
drive the development of wind energy,”
the study said. “This is urgently needed
to realize the country’s full potential
and reap the benefits for both the envi-
ronment and the economy.”
Among the region’s other leading
economies, Australia and Japan are pre-
paring to make major pushes in 2010
to develop renewable energy. Australia
has long been the region’s slacker in re-
newables promotion, but that is about
to change.
The country’s renewable energy in-
dustry is set for a huge boost after Par-
liament passed legislation in 2009 set-
ting a 20% renewable energy target for
2020. The new law is expected to gener-
ate up to A$28 billion ($24 billion) of
investment in renewable energy supply
and create 28,000 jobs, the country’s
Clean Energy Council estimates. Aus-
tralia currently generates about 8% of
its electricity from renewables.
The new targets will come into force
from next year, with the 2010 target
increasing to 12,500 GWh from 9,500
GWh, rising to 45,850 GWh in 2020,
and remaining at 45,000 GWh from
2021 to 2030. As under Australia’s pre-
vious renewables legislation, generators
of power from such renewable sources
as wind, solar, hydroelectricity and
geothermal will receive one Renewable
Energy Certificate (REC) for each MWh
of power they produce.
Selling RECs to regulated companies
such as power retailers, which are re-
quired to surrender a certain number
of RECs each year, will provide renew-
ables generators with an additional rev-
enue stream. The penalty for regulated
energy companies that fail to surren-
Table 1. India new and renewable energy.
Source: India Ministry of New and Renewable Energy
Note: MWeq. = Megawatt equivalent; kWp = kilowatt peak; sq. m. = square meter; 1 lakh = 100,000, nos. = number of units.
Cumulative achievements as of July 31, 2009
Sources / Systems Achievements during
2009-10 (up to July 31)
Cumulative Achievements
Power From Renewables
Grid-connected renewable power
Biomass Power (Agro residues) 70 MW 773.3 MW
Wind Power 222 MW 10.464 GW
Small Hydro Power (up to 25 MW) 31 MW 2.461 GW
Cogeneration-bagasse 106 MW 1.155 GW
Waste to Energy – 59 MW
Solar Power 2 MW
Sub Total (in MW) 429 MW 14.914 GW
Off-grid/Distributed Renewable
Power (including Captive/CHP plants)
Biomass Power / Cogen.(non-bagasse) 5 MW 175.78 MW
Biomass Gasifier 1.56 MWeq. 107.02 MWeq
Waste-to- Energy – 34.06 MWeq
Solar PV Power Plants and Street Lights – 5 MWp
Aero-Generators/Hybrid Systems – 0.89 MW
Sub Total 6.56 MWeq 322.75 MWeq
Total (Grid and Off-grid) 435.56 MW 15.236.75 GW
Remote Village Electrification Villages/Hamlets 4297 villages + 1156 hamlets
Decentralized Energy Systems
Family Type Biogas Plants 0.03 lakh 41.27 lakh
Home Lighting System – 4,50,000 nos.
Solar Lantern – 7,30,000 nos.
SPV Pumps – 7,148 nos.
Solar Water Heating – Collector Area – 2.90 Mln. sq.m.
Solar Cookers – 6.57 lakh
Wind Pumps – 1347 nos.
Other Programs
Energy Parks – 511 nos.
Akshay Urja Shops – 284 nos.
November 2009 insight 31
renewables
der the required number of RECs rises
to A$65/MWh, up from the current
A$40/MWh.
Australia’s biggest green energy pro-
ducer, Origin Energy, welcomed the
new legislation.
“Along with the carbon pollution re-
duction scheme and the right support
for investment in electricity transmis-
sion, the [renewables] scheme will be an
important factor in whether companies
invest in the infrastructure required to
deliver carbon emissions reductions in
Australia,” Origin Executive General
Manager, Policy and Sustainability, Carl
McCamish said.
Some companies are acting quickly to
cash in on the Australian market. Aus-
tralian pension funds manager Indus-
try Funds Management, for example,
has started the process of selling a non-
controlling interest in renewable ener-
gy producer Pacific Hydro as it seeks to
raise funds to accelerate development
of Pacific Hydro’s pipeline of wind and
hydropower projects. It said passage of
Australia’s new renewables target is one
of the drivers for the timing of the sale,
given the large investment required to
meet the goal.
“With the passage of the renewable
energy target in Australia there’s an
investment opportunity of circa 12
GW of electricity between now and
2020,” the company said. “It’s prob-
ably unlikely that any single entity
could meet that investment challenge,
but certainly Pacific Hydro is keen to
participate in that opportunity to the
full extent possible.”
Japan, once a global pace-setter in re-
newable energy technology, has slipped
in recent years. It now ranks 21st in the
E&Y renewables country index, tying
with Turkey and behind countries like
Poland and Belgium.
Yet just as Australia emerged as a poten-
tially lucrative renewables market with
new legislation in 2009, Japan could be
ready to re-assert its market leadership
role in 2010. The Democratic Party of Ja-
pan’s landslide victory in the country’s
August 2009 elections could mark a new
beginning for Japanese renewable-ener-
gy and carbon-emissions policies.
The DPJ’s election manifesto high-
lights a range of specific initiatives the
party will pursue to promote renewable
energy production, foster development
of clean-energy technologies and slash
greenhouse gas emissions. The party,
for instance, intends to “fast-track the
introduction of a fixed-price purchase
system that requires power companies
to purchase the entire output of renew-
able energy generation (not just surplus
power), and promote the development
and diffusion of ‘smart’ electricity grid
technologies.” The goal will be to boost
the ratio of renewable energy in Japan’s
total primary energy supply to about
10% by 2020.
The DPJ also will introduce legislation
to subsidize purchases of solar panels for
residential homes and other buildings as
well as so-called green vehicles and ener-
gy-saving appliances. Further, the party’s
platform calls for making Japan the world
leader in environmental technologies. It
has vowed to promote research and de-
velopment and commercialization of
such technologies as fuel cells, supercon-
ductivity and biomass generation.
Beyond Asia’s major economies, there
are signs that countries throughout the
region are starting to deploy renewables
based on their domestic resources, ac-
cording to E&Y partner Ben Warren.
“There is biomass and bioenergy in
the tropical parts of Asia, there is wind
energy in the Philippines and Thailand.
They are interesting markets in their
own right,” he said in an interview.
Across Asia, renewable energy develop-
ment is gathering speed as countries seek
to ensure security of energy supplies and
tackle climate change. Few countries in
the region can tap significant oil or nat-
ural gas supplies, and only China, India,
Indonesia and Australia rank as major
coal producers. Even where fossil-fuel re-
sources are available, concerns about cli-
mate change continue to mount as more
extreme weather events batter nations
like Indonesia and the Philippines.
All told, the global clamor for action
on climate change is starting to trump
the unfettered use of fossil fuels, and
renewable energy stands poised to reap
the benefits in Asia as elsewhere. ■
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Keynote
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Roberta Bowman,
Senior Vice President and
Chief Sustainability Officer,
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Chief Executive Officer,
EDF Energy
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The Outlook for Sustainability:
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December 2, 2009
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November 2009 insight 33
India
As World Mopes,
India Invests in Itself
Vandana Hari, Asia News Director, Platts, Singapore
A 580,000 barrels a day (b/d) state-of-
the-art refinery is brought on stream, a
$1 billion petrochemical project ties up
funding, a Rajasthan onshore field be-
gins pumping crude, a giant deepwater
gas field starts production and is quickly
on its way to hitting targeted output, an
LNG import terminal nearly doubles ca-
pacity and term LNG imports jump 50%
to 7.5 million metric tons (mt) per year.
While the developed world tightened
its purse strings and almost ground to
a halt in 2009, India’s petroleum sector
came out to play—ignoring the reces-
sion and preparing for the years ahead.
This is also where India’s path di-
verged from that of its formidable Asian
competitor China. While Beijing went
on a major shopping spree for energy
assets around the world, India invested
in itself.
2009 was the year India gave itself the
world’s cheapest car. Ashok Raghunath
Vichare, a resident of Mumbai, received
the keys to the first Nano from none
other than Ratan Tata, the chairman
of the Tata group, on July 17. A month
later, the $2,000 car got a thumbs-up
from its owner, who said he had done
up to 100 kilometers per hour on the
highway and squeezed out 24 km from
a liter of gasoline.
Some 100,000 aspiring owners were
selected by ballot to be the first recipi-
ents of the Nano. Those not on that list
can expect to wait through 2011 to take
delivery of their automobile.
Tata, India’s largest automobile man-
ufacturer, sold 47,126 vehicles in the
domestic market in August, a 21.4%
increase from August 2008. The com-
pany’s exports, in contrast, slumped
nearly 78% on year.
India’s gasoline demand over January-
August was 13.7% higher than the cor-
responding period of 2008 at a cumula-
tive 8.32 million mt, no doubt helped
by cheaper car loans and government
stimulus packages.
But importantly, consumption of gas-
oil, an important indicator of indus-
trial and agricultural activity, was 7.7%
higher year on year in the first eight
months of 2009 at 36.54 million mt.
Overall refined products demand
to the end of August was 3.2% higher
than a year ago, according to latest oil
ministry data.
Early in the year, private refining
and petrochemicals giant Reliance
Industries Limited (RIL) decided to
place its bets on the domestic mar-
ket by asking the government to end
the “export-oriented unit” status of
its 660,000 b/d Jamnagar refinery in
mid-April, nearly a year before it was
due to expire.
Losing EOU status made RIL liable to
pay import taxes and other levies on
crude bought overseas for processing at
the plant, but more importantly, also
enabled it to sell refined product in the
domestic market without attracting im-
port duties.
The company’s new 580,000 b/d re-
finery at Jamnagar is sited in a “special
economic zone,” which means it is re-
quired to export all its products in re-
34 insight November 2009
turn for fiscal incentives from the cen-
tral government.
Essar Oil, India’s only other private
refiner, took down its 210,000 b/d Va-
dinar refinery in April to raise its capac-
ity to 280,000 b/d. Though the Vadinar
refinery continued to export some of
its output, Essar Oil also embraced the
domestic market in a bigger way, tying
up the bulk of its output in term sales
with the three state-owned marketers
Indian Oil Corp. (IOC), Bharat Petro-
leum Corp. Limited, and Hindustan Pe-
troleum Corp. Limited.
Exports accounted for only 12% of
Vadinar’s product sales in the April-
June quarter, compared with 30% a
year ago.
The company, which exited domes-
tic retail marketing in 2007 as rising
crude prices and domestic fuel subsidies
snuffed out margins, had reopened all
1,276 of its retail stations by mid-2009,
and announced plans to grow the num-
ber to 1,500 by March 2010, the end of
the current financial year.
Essar Oil is spending $1.56 billion to
expand Vadinar’s capacity to 320,000
b/d by December 2010 and has said it
sees a “ready domestic market” to ab-
sorb all the incremental production.
State-owned refiners, which dominate
the refining and marketing sector in In-
dia, are also in an expansionary phase.
The largest among them, IOC, is
scheduled to increase its Haldia refinery
capacity in West Bengal to 150,000 b/d
from 120,000 b/d by December or Janu-
ary 2010 and its Panipat refinery in the
northern state of Haryana to 300,000
b/d from 240,000 b/d by December.
BPCL expanded its Kochi refinery ca-
pacity in Kerala state to 190,000 b/d from
150,000 b/d in August. It has also set up
a 120,000 b/d greenfield refinery at Bina
in Madhya Pradesh state in partnership
with Oman Oil Company, which is near-
ly complete and set for commissioning
through the first half of 2010.
With Indian products demand con-
tinuing to grow modestly while export
markets remained in the doldrums,
refined product exports from the
country shrank, but so did imports—
a reflection of more barrels from the
export-oriented refiners finding home
in the domestic market.
January-August exports slumped
27.3% on year to 17.98 million mt. Prod-
uct imports in the same eight months
dropped 30.38% to 9.99 million mt.
Indian refiners maintained average
overall capacity utilization rates well
above 100% in 2009, in sharp contrast
to most of their peers in Asia.
Though Indian refiners are riding on
the back of a strong demand growth in
gasoil and gasoline, which account for
40% and 9% of the country’s total prod-
ucts consumption respectively, they are
increasingly in a quandary over the
growing surplus of naphtha.
Exports of the light distillate have
become tougher in the face of dramat-
ic declines in consumption by petro-
chemical producers in countries such
as Japan, South Korea and Taiwan.
India’s naphtha consumption in the
first eight months of 2009 at roughly
8.36 million mt was 7.8% lower than
the corresponding period a year ago,
largely due to gas substitution.
Downstream petrochemical projects
in the pipeline would start absorbing
some of the country’s surplus naphtha,
but only after two to three years.
Among the few immediate expan-
sions on the anvil are Haldia Petro-
chemicals, which is set to debottleneck
its West Bengal facility through the
end of 2009 to raise its naphtha crack-
ing capacity to 675,000 mt/year from
520,000 mt/year.
IOC is setting up a petrochemicals
complex based on a naphtha-fed steam
cracker as part of its Panipat refinery
expansion project in Haryana state,
which is expected to go into commer-
cial production in 2010. The cracker,
with an ethylene capacity of 860,000
mt/year, is expected to use naphtha
feedstock from the Panipat refinery as
well as IOC’s Mathura refinery in the
nearby Uttar Pradesh state and Koyali
refinery in Gujarat.
The other projects are further out.
For instance Brahmaputra Cracker and
Polymer Limited’s grassroots gas and
naphtha-based petrochemical project
in Assam state achieved financial clo-
India
November 2009 insight 35
India
sure in October, and is expected to use
up 160,000 mt/year of naphtha when it
goes on stream in April 2012.
India’s gas supply dynamics changed
even more dramatically than the refin-
ing scenario this year, with the start-
up of the deepwater D6 block in the
Krishna Godavari Basin off the coun-
try’s east coast.
Operator RIL began pumping gas from
D6 in April and had crossed the 1 Bcf/
day mark within three months. Output
from the block is tipped to reach a peak
of 2.8 Bcf/d by the end of 2009 or in
early 2010, nearly doubling national
gas production.
Another landmark upstream devel-
opment was the start of oil production
from Cairn India’s Rajasthan block—
the first onshore oil discovery in the
country in two decades. The company
began pumping sweet, waxy crude from
the Mangala field in the RJ-ON-90/1
block on August 29. Output from the
first three fields to be developed in the
block is expected to peak at 175,000 b/d
in the first half of 2011, or about 8.75
million mt/year, boosting the country’s
current and largely stagnant produc-
tion of about 34 million mt/year by
nearly 25%.
Even with substantial new D6 gas vol-
umes flowing to the power and fertiliz-
er producers—the priority sectors iden-
tified by the government to receive the
initial volumes—India’s LNG imports
hit an all-time high of 1.168 million
mt in August. The purchase represent-
ed a 44% leap from both the previous
month and August 2008.
Petronet LNG Limited, India’s maid-
en and largest LNG importer, complet-
ed an expansion of its 6.5 million mt/
year Dahej import and regasification
terminal on the country’s west coast in
March to a new maximum capacity of
11.5 million mt/year. Starting Novem-
ber 2009, the company was preparing
to ship in 7.5 million mt/year of term
LNG from Qatar’s RasGas, up from the
current 5 million mt/year.
India also imports spot LNG through
Dahej, and Shell’s Hazira terminal on
the west coast. A third LNG import
terminal, at Dabhol on the west coast,
is preparing for commissioning in the
coming months, and has offered the
1.5 million mt/year capacity it will have
available initially on a tolling basis.
The only setback clouding a year of
successes was a flopped upstream bid-
ding round. New Delhi offered a record
70 exploration blocks under the eighth
round of its New Exploration Licensing
Policy launched in April. The interna-
tional bidding round closed October 12
with bids coming in for only 36 blocks
and the international majors India has
been trying hard to woo largely con-
tinuing to stay away.
In contrast, the last round of up-
stream bidding in 2008, NELP VII, had
attracted bids for 45 of the 57 blocks on
offer. The bids totaled 181, compared
with just 76 this year.
Top officials in the oil ministry and
the upstream regulator, the Director-
ate General of Hydrocarbons, did not
hide their disappointment and rallied
their own reasons for the failure. These
included the global credit crunch and
international oil companies expressing
interest in development projects rather
than exploration blocks.
But the single biggest factor casting
a shadow on the bidding round was in
all likelihood the ongoing legal battle
between RIL and Reliance Natural Re-
sources Limited over D6 gas supplies
and lack of clarity on the government’s
role in setting gas prices and deciding
the country’s gas utilization policy. The
price of D6 gas was set following ap-
proval by a senior ministerial group in
September 2007 with the same group
picking the buyers for the first 1.4 Bcf/
day of D6 production.
Though crude production in India
is sold at international market prices,
natural gas is bound to take a more
gradual and meandering path to liber-
alization, thanks to the fertilizer and
power sectors. These require feedstock
at discounted prices because of the cap
on their own selling prices.
India’s ability to manage interna-
tional perceptions through the transi-
tion phase will be key in its ambition
to bring larger areas of its sedimentary
basins under exploration. ■
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25th Annual
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April 11–13, 2010 • Venetian Hotel • Las Vegas, Nevada
Platts is pleased to announce that this year the
25th Annual Global Power Markets Conference
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on April 11–13, 2010. For over 20 years,
Platts Global Power Markets Conference
has been the gathering place for power
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consistently provides an unparalleled
platform for exploring the issues
crucial to the development of electric
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Confirmed speakers for this year’s
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Executive
Sponsor:
November 2009 insight 37
coal
India: Stalking an Asian
Coal Revolution
James O’Connell, Managing Editor, Platts International Coal Report
2009 saw India emerge as a major
player in the international coal mar-
kets. No longer hiding behind the skirts
of state-owned monopolies, imports
are soaring in tandem with demand.
No longer tied exclusively to the apron
strings of the traditional supply routes
from Indonesia and Australia, it is vo-
raciously eyeing new markets. There’s a
change a-coming and old players such
as Europe had better watch out.
While much of the rest of the world
suffered economic stagnation or de-
cline from 2008, India struggled to
comprehend what the fuss was all
about. Booming industries such as steel
powered double-digit growth, while
the only blot on the landscape was if
fuel supplies could be guaranteed while
keeping costs under control.
Long in the shadow of China’s dragon,
India’s tiger has finally begun to present
its claws and make its presence felt.
As with any emerging power, India
is not trouble free. It is weighed down
with infrastructural constraints, out-
of-date procurement systems and over-
ly ambitious plans, especially in the
power generation field, which will see a
growing dependence on imported coal
in the decades ahead.
Major Opportunity for Private Players
India has massive reserves of coal,
over 250 billion metric tons (mt), but
it is of average quality and usually re-
quires blending with imported coal to
generate power. Sudhir Nair, the head
of energy and infrastructure at CRISIL
Research, has projected that by 2013-
2014 India will be the world’s second
largest importer of coal, behind only
Japan, and will require 117 million mt
of thermal and 52 million mt of coking
coal imports.
Nair noted that these figures are based
on the projection that 80% of capacity
additions in the power sector will in-
volve coal-fired plants. Coal will fuel
54 GW out of the 66 GW of total capac-
ity CRISIL believes will be developed by
March 2014.
Nair forecast that this will result in
254 million mt of incremental coal de-
mand by 2013-2014. He also assumed
that the state-controlled local producer
Coal India Ltd will meet its production
target of 588 million mt for that year,
leading to the import projection.
The Mumbai-based specialist suggest-
ed that, rather than being government
led, private enterprises will be the main
importers with the majority of imports
coming from Indonesia. Nair pointed
to tie-ups such as Reliance Power’s In-
donesian acquisitions, using Krishna-
patnam port, Essar Power importing
through Salaya port, and both Tata
Power and Adani Power importing In-
donesian coal through Mundra port for
their large-scale power projects.
He went on to project that western
ports would take the lion’s share of
coal traffic, accounting for 116 million
mt in 2013-2014. Of this, 83% would
consist of thermal coal and 17% coking
coal. Meanwhile eastern ports would
account for some 86 million mt, with
a higher concentration of coking coal
at 38%. These figures include some
38 insight November 2009
33 million mt of domestic production
moving internally between ports.
There are obstacles to the process,
with Nair pointing out that substan-
tial port developments are required to
handle the projected increase in coal
imports. He said that minor ports in
Orissa (Dhamra 15 million mt capacity,
Ashtaranga 12.5 million mt and Kirta-
nia 10 million mt) and Gujarat (Mundra
12 million mt and Pipavav 10 million
mt) are likely to play a central role in
the process of adding some 93 million
mt of annual coal-handling capacity by
March 2014.
Meanwhile major ports are expected
to add 35 million mt to their existing
capacity by 2013-14 to keep pace with
import expectations. Obstacles to such
development are the amount of capital
required and possible government in-
tervention regarding the minor ports,
Nair observed, adding that the capac-
ity additions would require coal-related
investment at minor ports of Rupee
169 billion ($3.61 billion) and at major
ports of Rupee 14.8 billion.
The message that Indian dependence
on and demand for imported coal is set
to rise in future decades was repeated
by RV Shahi, chairman of Indian logis-
tics company Infratech.
Shahi, a 35-year veteran of India’s
power sector, said the country could
not depend on domestic coal produc-
tion alone to sustain its massive power
generation expansion program—in-
stalled capacity is projected to surge to
800 GW by 2032-35. Analysis by his
company showed that, even with the
best intentions regarding the harness-
ing of renewable energy resources, coal-
fired plants would still account for 48%
to 60% of India’s electricity generation
by 2032.
“Dependence on [coal] imports has
risen to about 5% of total production
and this proportion will increase,”
Shahi said. Indian domestic mines cur-
rently produce about 480 million mt/
year, meaning thermal coal imports are
about 25 million mt/year.
The coal supply situation facing In-
dian power stations had become “criti-
cal” with an increasing number of In-
dian power plants having only three to
seven days of stocks. This means that
they operate on a “crisis management
basis,” he said.
Shahi added that “the private and
state sectors have been advised to ac-
quire coal mines abroad. That process
will help India but we must not be com-
placent with that,” he stated.
Another issue is the high ash content
of Indian domestic coal, at up to 45%,
which makes it unsuitable for power
generation without washing. “The coal
supply to Indian power stations is some
of the worst in the world. The coal
washing process must be accelerated
in the state and private power sectors,”
said Shahi.
He also mentioned other issues facing
India’s domestic coal industry. These in-
clude difficulties over land acquisition
coal
Domestic coal 55%
Renewable 5%
Nuclear 3%
Natural gas 10%
Oil 1%
Hydro 25%
Imported coal 1%
1. India energy breakdown.
Source: Government of India
November 2009 insight 39
coal
for coal projects, infrastructure gaps
and high production costs. “Land titles
are not so clear, leading to development
being a risky proposition,” he said.
India Pounces on European Stronghold
Softer free on board (FOB) prices and a
decline in overall international demand
have seen South African production be-
come more attractive to Indian traders.
The key export terminal of Richard Bay
is no longer exclusively a happy hunt-
ing ground for European coal consum-
ers who now face competition.
South African coal players are already
looking east and the country has be-
come a leading exporter to India. South
Africa shipped 9 million mt to India in
the first half of 2009, some 32% of its
total exports of 28 million mt.
And more is available. In early Octo-
ber, an Asian coal trader said he was ap-
proached by several South African coal
traders interested in selling Richards
Bay FOB cargoes in Asia. “In the past,
usually, I’ll go to the supplier. I’ll go to
the miner and I’ll make an offer,” the
Asian trader said, adding: “But when
one starts getting unsolicited offers
from many of the traders or the middle-
men or the brokers, that is a sign to say
that there is a lot of coal in the market
to be sold.”
Given this situation, most industry
players would be surprised if prompt In-
dian demand would support a Richards
Bay FOB market that could come under
further pressure from increased sell-
ing in the latter part of 2009 and early
2010. With India’s monsoon season at
an end, demand for South African coal
in the country has been mounting but
buyers are still wary of overpaying for
spot material.
“The Indians are happy to wait for
prices they want, they will never chase
the market up and in this respect they
are very disciplined,” a Switzerland-
based trader noted. In this respect,
while South Africa offers India a new
market, Indonesia remains a corner-
stone of its supply.
India’s total import requirement for
2009 is estimated at 50 million mt,
much of it expected to come from In-
donesia. In September Indonesia’s En-
ergy and Mineral Resources Minister
Purnomo Yusgiantoro said his country
had already shipped 13 million mt to
India in the year to date and confirmed
delivery of an additional 3 million mt
by the end of November.
But India’s coal-strapped power utili-
ties can be forgiven for being nervous
since Indonesia is expected to export
around 185 million mt to a wide range
of countries in 2009. “That means In-
dia’s [annualized] share in the exports
would be a little over 8%,” one indus-
try analyst said, adding: “Obviously,
the Indonesians [must] find the other
neighboring markets more attractive.”
Industry players are hopeful of an in-
crease in exports once the two countries
finalize a proposed working group on
coal which is expected to take shape in
early 2010. But coal shortages are already
biting into Indian power generation.
India’s Central Electricity Authority
has reported that power production
grew by 7.5% on year in September.
But NTPC Ltd., India’s largest power
generator, has indicated that growth of
9.8% could have been achieved if coal
supplies had been reliable. The gov-
ernment-controlled NTPC saw its load
factor fall at 12 out of its 14 coal-fired
plants between March and August, in
some cases by up to 33%.
The industry’s problems are illus-
trated by the travails of the largest im-
ported coal tender launched in India
to date, the tender for 12.5 million mt
first floated in May 2009 by the local
MMTC. At the time of writing [Octo-
ber 20] the tender remained unresolved
more than a month after the closing
date of September 16, an MMTC official
confirmed.
“The tender is still going on and
there hasn’t been any news yet. Offers
into it are valid for 90 days,” said the
official. This would mean offers into
the MMTC tender have validity until
December 15.
The imported coal is required over
a one-year delivery period by Indian
coal-fired power stations operated by
NTPC. The generator’s annual coal
consumption is currently about 116
40 insight November 2009
coal
million mt/year, with 10% usually
sourced from overseas and used for
blending with local coal.
“All this shows a kind of convoluted
economics,” analyst Sujit Mitra said,
adding: “The government is taking
time to finalize the deal as it wants to
make sure that it gets the best price and
saves money. But in the process it has
created a situation when the country is
suffering losses.”
The Indian government’s plan-
ning commissioner, B K Chaturvedi,
has said that imports are not solely
responsible for the lack of growth in
coal supplies, with delays to the pro-
duction from domestic mines also a
major contributor. Only 25 of the 206
allocated coal blocks are currently in
production, he observed.
Chaturvedi also admitted that not
all of the 80 GW of generating capacity
projected for development in the gov-
ernment’s eleventh five-year plan, end-
ing March 2012, will be implemented.
He suggested that 60 GW to 75 GW is
“potentially achievable” but added that
the commissioning of part of this ca-
pacity will spill over into the next five-
year planning period.
The planning commissioner said that,
while India has seen average economic
growth of 9% over the last four years,
growth in 2008 fell to 6.7% with fore-
casts for 2009 ranging from 6.3-7%. He
noted that “there was a power shortage
of 12-13% under the tenth plan [period
ending in March 2007]. What impact
had this in [restricting] growth? We es-
timate this at $100 billion.”
Despite the need for development in
the power sector, Chaturvedi added
that the allocated coal blocks could
not be developed without due consid-
eration for other factors, particularly
local factors. “We also cannot override
the environment—we need to imple-
ment policy that looks after all aspects
including diversity, forestry, elephant
trails. Riding roughshod over these is
not the way to develop growth.”
India may be undergoing a modern
industrial revolution, yet it is trying to
strike a balance between development
and traditional values. But offering
competition for Europe in South Af-
rica and ready to devour as much coal
as Indonesia can spare, the Indian tiger
is unlikely to turn into a pussy cat any
time soon. ■
100
200
300
400
500
600
700
800
M
i
l
l
i
o
n

m
e
t
r
i
c

t
o
n
s
900
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
Production Import
2. Estimated non-coking coal production demand and imports.
Source: CRISIL Research
Note: Non-coking imports are adjusted for calorific value. .
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42 insight November 2009
Until recently the carbon trading
business occupied a clearly defined geo-
graphical and political space, with ac-
tivity centered squarely on Europe and
European Union requirements. There
was outlying activity—in Asia, for in-
stance, developing countries undertook
United Nations Clean Development
Mechanism projects to supply carbon
credits for trading in Europe, and there
was a voluntary emissions trading pro-
gram in Japan. But the carbon trading
world was firmly Eurocentric.
Not for much longer, though. The
2008 United States presidential elec-
tion saw a marked shift in national cli-
mate change politics in favor of some
form of carbon trading, while elections
in Australia in 2008 and Japan in 2009
had the same outcome. And looming
over all these developments is the cer-
tain replacement of the existing order
in 2012, although replacement by what
will only be determined at the Decem-
ber 2009 Copenhagen convention and
subsequent meetings.
What does this realignment of the
global carbon market mean? While
much remains uncertain, there are
three clear implications. First, climate
change and related carbon issues occupy
an increasingly prominent place in the
list of political priorities in many coun-
tries. Second, the carbon market will
become much less focused on Europe.
And third, the carbon trading business
seems certain to grow substantially.
The first point is well illustrated by
the Japanese elections in August 2009,
which saw the Democratic Party se-
cure a landslide victory. While climate
change issues may not have been a de-
ciding factor they were important, with
clear differences on the issue in the
manifestos and election pledges of the
contending parties.
In overall economic terms, the stance
of the new government is not greatly
different from that of the outgoing ad-
ministration “The leaders of the new
ruling party have come from the con-
servative party, so this is essentially
Japan having two conservative parties
with similar philosophies and making
a modest switch,” one former aide to an
industry minister told Platts.
But the carbon policy commitments
of the new government are far stron-
ger than before and will be mandatory,
unlike the voluntary emissions trading
system adopted by its predecessor. This
operated for five years and had very
limited impact.
Instead, Prime Minister Yukio Hatoya-
ma told the UN on September 26 that
Japan plans to cut greenhouse gas emis-
sions by 25% from the 1990 level by
2020. This will be based on a carbon
emissions cap-and-trade system and the
possible introduction of a carbon tax.
emissions
Carbon Trading —
Asia and the New
World Order
Frank Watson, Managing Editor, Platts Emissions, and Mayumi Watanabe, Editor,
Platts Metals
November 2009 insight 43
emissions
Separately, the Tokyo metropolitan
government plans to launch its own
cap-and-trade scheme from April 2010.
It has mandated that businesses con-
suming more than 1,500 kiloliters per
year of petroleum fuel or equivalent
must cut their emissions by 2014. The
reduction must be by 6-8% from the
base year that they choose to use.
Japan is not alone among Asian
countries in giving much higher pri-
ority to the issue of climate change
than before. Addressing the UN Gen-
eral Assembly in September, Chinese
President Hu Jintao acknowledged the
importance of the issue and said his
country would contribute to the resolu-
tion of the problem. While Hu did not
give specific emissions reduction levels
or timelines, his public acceptance of
the need for Chinese action represents
a significant advance on the govern-
ment’s previous position.
The South Korean government has
been more precise, saying that it is
planning a 30% cut in its 2005 GHG
emissions by 2020. In this context
Patrick Birley, the chief executive of
the European Climate Exchange, told
a Platts climate change conference in
September that “the strongest interest
for carbon trading systems comes from
South Korea,” adding that it “is looking
at a leadership position.”
Seoul’s interest in presenting itself as
a leader in the climate change business
is unsurprising, given that it sees the
production and export of new and re-
newable energy technologies as one of
its core future economic activities. But
it is another indication of the new seri-
ousness with which Asian governments
are looking at the issue.
In the wider Asia-Pacific region,
Australia could become a pacesetter
if it launches a cap-and-trade carbon
scheme in 2011 as planned. The gov-
ernment’s proposed Carbon Pollution
Reduction Scheme calls for a 5-15% cut
in 2000 GHG emissions by 2020 ac-
companied by the start of carbon trad-
ing in mid-2011.
The initiative hit a stumbling block
when the Senate voted against the leg-
islation in August 2009. But the gov-
ernment plans to re-submit the bill in
November and, in an indication of the
importance of the issue, could call new
national elections if the measure is re-
jected again.
Qatar - 2,499,649 (1%)
Other - 20,678,519 (6%)
Nigeria - 4,154,978 (1%)
S Africa - 2,926,582 (1%)
Argentina - 4,162,237 (1%)
Mexico - 8,948,550 (3%)
S Korea - 14,861,483 (5%)
Chile - 4,682,271 (1%)
Malaysia - 4,419,496 (1%)
Colombia - 2,987,992 (1%)
China - 188,898,918 (60%)
India - 36,344,465 (11%)
Brazil - 20,810,244 (7%)
Indonesia - 3,692,592 (1%)
1. Expected average annual CERs by host country (mt CO
2
e).
Source: UNFCCC
Note: All figures are UN Certified Emission Reductions in metric tons of CO
2
equivalent greenhouse gases.
Total expected annual CERs based on registered projects as of October 14, 2009: 320,067,976.
44 insight November 2009
emissions
The government has proposed that
around 1,000 major industrial produc-
ers including coal, gas, iron, steel, ce-
ment, paper and power companies
should be encompassed by a scheme
intended to cover 75% of the country’s
GHG emissions. These stood at 553 mil-
lion metric tons in 2008.
Most of the emission allowances
would be allocated through auctions
under the government proposals, al-
though the opposition Liberal-National
coalition and industrial lobby groups
have put forward alternative proposals
involving different market mechanisms
and less onerous cost burdens. Debate
on the issue has centered both on who
should pay for the cuts and on whether
it is wise to commit to specific emission
cuts and timelines before the December
2009 Copenhagen talks.
What all this indicates is that Aus-
tralia and other Asia-Pacific countries
could take longer to implement their
carbon trading plans than originally
envisaged—even if Copenhagen pro-
duces a clear and unequivocal blueprint
for the future of the market. But it also
indicates that, at least in the medium to
long term, the current Eurocentric car-
bon trading world is likely to become a
thing of the past.
In the process, carbon trading could
become a much bigger business than
at present. Japan, for instance, is one of
the ten biggest emitters of GHGs in the
world, and its commitment to start car-
bon trading will create significant new
demand for carbon offsets.
The potential can be seen from a
Deutsche Bank assessment of what
it would cost to make good its Kyoto
Protocol commitments on cutting
emissions by 2012. The bank said
that Japan would have to obtain off-
sets equivalent to more than 100 mil-
lion metric tons of carbon at a cost,
based on a price of $17/mt, of around
$1.7 billion. Most of this requirement
for credits has already been sourced
through purchase agreements by the
Japanese government in the form of
UN Certified Emission Reductions
from CDM projects and surplus As-
signed Amount Units—the sovereign
level credits established for industrial-
ized countries under Kyoto.
And with the US waiting in the wings,
and countries such as China and India
positioning themselves to become part
of the process, the carbon market is set
to become not only much larger but
also more genuinely global.
The process may not, of course, be
entirely comfortable for existing par-
ticipants in the market—the new en-
trants are likely to want changes. For
instance, the process for defining,
structuring and administering CDM
projects may come under scrutiny.
This could have repercussions for in-
vestors in the power generating and
other sectors in Asia, where the sale of
CERs from CDM projects has become
an increasingly important source of
project revenues.
But changes are to be expected in
what is, after all, a young market—the
EU Emissions Trading Scheme was only
launched in 2005. Even without its ex-
panded reach, and uncertainties about
what the market will look like post-
2012, the youthfulness and immaturity
of the market mean that it will neces-
sarily continue to evolve.
And the emerging global carbon
market will offer opportunities as
well as threats to what appears likely
to be a much-increased band of par-
ticipants. Trading activity to date has
been concentrated in Europe, where
the demand for carbon credits is cen-
tered. As Asia and other regions be-
come sources of demand and not just
credits, this seems likely to change,
with implications across the wider
Asian industrial, investment and trad-
ing communities. ■
But changes are to be expected in what is, after
all, a young market ... Even without its expanded
reach, and uncertainties about what the
market will look like post-2012, the youthfulness
and immaturity of the market mean that it will
necessarily continue to evolve.
Attend The Platts Global Energy Awards Celebration on December 3, 2009
Please join more than 500 industry leaders from around the world at the Cipriani
Wall Street in New York City for the annual awards ceremony, where we formally
recognize the winner in each category.
Register today at: www.etouches.com/gea2009
CEO of the Year
Greg Boyce, Peabody Energy
Antonio Brufau, Repsol
Peter Duprey, ACCIONA Energy North America
Chengyu Fu, CNOOC Limited
James Hackett, Anadarko Petroleum Corporation
Lewis Hay, FPL Group, Inc.
Ralph Izzo, Public Service Enterprise Group
(PSEG)
John C.S. Lau, Husky Energy, Inc.
Milton B. Lee, CPS Energy
Wayne Leonard, Entergy Corporation
Aubrey McClendon, Chesapeake Energy
Corporation
Vincent de Rivaz, EDF Energy

Commercial Technology of the Year
Alter NRG
Badger Licensing L.L.C.
CNOOC Limited
EnerNOC, Inc.
InStep Software
Lennox Industries Inc.
Process Dynamics Inc.
Repsol
Shell Global Solutions
Space-Time Insight

Community Development Program of the Year
AES Dominicana
Chesapeake Energy Corporation
CPS Energy
El Paso Corporation
Entergy Corporation (Low Income Assistance)
Entergy Corporation (University Funding)
Northeast Utilities
PTT Public Company Limited
Qalhat LNG
Reliance Industries Ltd.
Reliance Infrastructure Ltd.
Valero Energy Corporation

Deal of the Year
Arch Coal, Inc.
Belwind NV
Chesapeake Energy Corporation
Enel SpA
Gas Natural
Mansfield Oil Company
MOL Nyrt.
NRG Energy, Inc.
Peabody Energy
T-Power NV
Valero Energy Corporation
2009 Platts Global Energy Awards Finalists
Downstream Operations of the Year
Jamshoro Joint Venture Limited (JJVL)
Mansfield Oil Company
Petrobras S.A.
S-OIL Corporation
Sovcomflot (SCF) Group

Energy Efficiency Program of the Year
Ameren Illinois Utilities
Exel Logistics
ComEd, An Exelon Company
IKEA North America
Johnson & Johnson
Michaels Stores, Inc.
MidAmerican Energy Holdings Company
Orion Energy Systems Inc.
Pacific Gas and Electric Company
Reliance Industries Ltd.
Staples Corporation
Stream Energy

Energy Producer of the Year
Anadarko Petroleum Corporation
Chesapeake Energy Corporation
CNOOC Limited
Coal India Limited
Peabody Energy
Petrobras S.A.

Engineering Project of the Year
Entergy Corporation (Automatic Load Transfer)
Entergy Corporation (University of Arkansas)
Mirant Corporation
MyCelx Technologies/Anadarko Petroleum
Corporation
Shell Exploration & Production
YANSAB (Yanbu National Petrochemical Co)

ENR Energy Construction Project of the Year
Advatech LLC
Black & Veatch
City Water, Light & Power (CWLP),
FPL Group, Inc.
Navy CFAY
Pepco Energy Services, Inc.
SGT LLC
Shell Exploration & Production
SNC-Lavalin Constructors Inc.
Tetra Tech Inc.
URS Washington Division (Palo Seco)
URS Washington Division (Prairie Creek)
Green Energy Initiative of the Year
Alpine Energy Group LLC
Elementa Group Inc.
FPL Group, Inc.
Iberdrola, S.A.
Indian Oil Corporation Ltd.
Naval Facilities Engineering Command
PG&E Corporation
Public Service Enterprise Group (PSEG)
Recurrent Energy (North Face)
Recurrent Energy (San Francisco)
SolarCity
Zorlu Enerji

Industry Leadership Award
Arch Coal, Inc.
Black & Veatch Corporation
California ISO
Carbon Capture and Storage Association
Chesapeake Energy Corporation
Duke Energy
Energy Curtailment Specialists, Inc (ECS)
Entergy Corporation
MidAmerican Energy Holdings Company
Petrobras S.A.
PJM Interconnection
Southern California Edison

Infrastructure Project of the Year
ATP Oil & Gas Corporation
BP Australia
Bronzeoak Ltd.
Entergy Corporation
San Diego Gas and Electric Company (SDG&E)
Tetra Tech, Inc.

Lifetime Achievement Award
Jean-Pierre Benqué, EDF International North America
Christopher Bloch, Boyle Energy Services and
Technology
Tom Casten, Recycled Energy Development (RED)
Roger Duncan, Austin Energy
Sheila Hollis, Duane Morris LLP
Bill Klesse, Valero Energy Corporation
Hardev Singh Kohli, Reliance Industries Ltd.
Lee Raymond, Exxon Mobil Corporation, retired
Larry Weyers, Integrys Energy Group

Marketing Campaign of the Year
Alliant Energy
Indian Oil Corporation Ltd.
Peabody Energy
PTT Public Company Limited
Southern California Edison
Toronto Hydro Corporation
Power Company of the Year
Consolidated Edison, Inc.
CPS Energy
Entergy Corporation
FPL Group, Inc.
Public Service Enterprise Group (PSEG)
Reliance Infrastructure Ltd.

Rising Star Award
CoaLogix
EcoTek Lighting
Enzen Global Solutions Private Limited
Jamshoro Joint Venture Limited (JJVL)
LanzaTech
Stream Energy

Sustainable Technology Innovation of
the Year
Abengoa Solar
eSolar, Inc.
Republic Services, Inc./HDR, Inc.
Ice Energy
InEnTec LLC
Public Service Enterprise Group (PSEG)
RSI Silicon
Shell Global Solutions
Sopogy, Inc.
Tessera Solar/Stirling Energy Systems
Total
TURBINA IPD Ltd.
Wade Adams Group
Principal Sponsor
Co-Sponsor
Celebration Sponsor

www.GlobalEnergyAwards.com
46 insight November 2009
The global crisis is altering the shape
of the world’s economy and shifting
the global economic center of grav-
ity to the East. While most of the de-
veloped West struggled to keep their
economies from shrinking in the past
year, China and India were among
the few economies in the world that
continued to expand. Overall, the pic-
ture of a dynamic and resilient Asia
remains intact and this will continue
to drive confidence and optimism over
the medium term.
However, Asia needs a new model to
sustain its growth. “Business as usual”
is no longer an option. Over the past
decades, Asian economies have been
able to achieve high growth rates by in-
creasing their inputs of labor and capi-
tal while tapping on cheap supplies of
fossil fuels. Although this has succeed-
ed in lifting a generation out of pover-
ty, it has also put tremendous strain on
resources and created acute challenges
for the environment. Beyond resource
constraints, Asia needs to deal with
the challenges of climate change. The
emerging economies of Asia are among
the world’s largest emitters of green-
house gases. Collectively, they play a
critical role in shaping a viable global
solution on climate change.
Asian countries are understandably
reluctant to constrain their growth
and energy usage, when the developed
countries are responsible for the bulk
of current and historical greenhouse
gas emissions. However, attitudes are
shifting and climate change is be-
coming a major priority on the policy
agenda. Across the region, countries
are grappling with new growth strat-
egies to address the challenges of cli-
mate change and energy for a more
sustainable future.
While the challenges ahead are com-
mon to all, the solutions differ. How do
we find energy options that are clean,
economically competitive, convenient
and reliable? The answer is complex.
Countries in Asia vary in size, popula-
tion and stage of development. Some
are endowed with abundant clean and
renewable energy sources while oth-
ers have no alternatives to fossil fuels.
There is no silver bullet and trade-offs
are inevitable. Countries have to strike
the right balance for themselves and
decide how far to go.
Renewable energy sources like solar
and wind power are part of the solu-
tion in a carbon-constrained world.
But realistically, they are unlikely to
have sufficient scale to replace fossil
fuels for some time to come. Other
low-carbon ways to power our future
are needed, but they are neither cost-
free nor problem-free. Risks and trade-
offs have to be managed. Carbon cap-
ture and sequestration technologies
are still experimental and far too ex-
pensive to be deployed on a commer-
cial basis. Biofuels, if produced in an
unsustainable way, can lead to defor-
estation, environmental degradation
and the destruction of carbon sinks.
Nuclear energy comes with the risks of
safety hazards, and proliferation of fis-
energy policy
A Sustainable Energy
Future for Asia
Lawrence Wong, Chief Executive, Energy Market Authority of Singapore
November 2009 insight 47
energy policy
sile material or nuclear technology.
Nevertheless, with increased invest-
ments in energy R&D worldwide, it
is clear that technology will progress
steadily, and new alternatives and solu-
tions will emerge. Asian countries are
doing their part in this global research
effort. For example, China is hosting
the world’s largest solar research facil-
ity, and Japan is pioneering fuel cell
co-generation systems for residential
use. All over the region, companies
and governments are finding ways to
integrate new technologies into every-
day life, and learning how best these
can be harnessed to help meet their
energy needs.
As a small city-state with no natural
resources, Singapore has more than its
fair share of these energy challenges.
Nevertheless, we have taken a long-
term and holistic approach to strike a
balance between our objectives of eco-
nomic competitiveness, energy security
and environment sustainability.
Our starting point is to promote
competitive markets. We have restruc-
tured and liberalized our electric-
ity and gas markets. Energy is priced
properly and not subsidized. This
ensures the right incentives to avoid
over-consumption and to economize
on the use of energy.
At the same time, we have pursued
pragmatic and cost-effective ways to
improve energy efficiency and en-
courage conservation, for example, by
promoting greater use of public trans-
port and setting green standards for
buildings.
In the transmission and distribution
of electricity, we have invested in a
high quality grid to optimize usage, re-
duce transmission losses and enhance
reliability. The grid incorporates many
smart features, including an automated
condition monitoring system to detect
and remedy incipient faults. Singapore’s
grid performance, as measured by the
duration and frequency of interrup-
tions, is consistently ranked amongst
the best in the world.
In the power generation sector, mar-
ket liberalization has led to the rapid
planting of gas-fired combined cycle
gas turbines in Singapore, replacing
the oil-fired steam plants. This has im-
proved the competitiveness of electric-
ity prices, and lowered our carbon in-
tensity. Today, more than 80 percent of
Singapore’s electricity is generated from
natural gas supplied by Malaysia and
Indonesia through pipelines. To diver-
sify our gas supply sources, Singapore
will be importing liquefied natural gas
by 2013.
Beyond LNG, there are practical
challenges to fuel diversification due
to our limited energy options. But we
recognize that technology is chang-
ing, and that energy solutions not vi-
able for Singapore today may become
viable in future. The government is
investing considerable sums to devel-
op clean technologies like solar and
biofuels. The Energy Market Author-
ity (EMA) is also actively engaged in a
wide range of test-bedding initiatives,
Current projects include a pilot for
electric vehicles on Singapore’s roads
and an intelligent micro-grid system
tapping on clean energy sources on an
offshore island.
Some of Singapore’s experiences may
be relevant to others in Asia. But no
single city or country will have all the
answers. Instead, we need closer col-
laboration to share experience and ex-
pertise, and develop pragmatic, work-
able solutions. This is why the EMA is
organizing the Singapore International
Energy Week from November 16th to
the 20th. The event will bring togeth-
er policy-makers, industry leaders and
subject matter experts to exchange
ideas on the broad energy issues of our
time. Through these interactions, we
hope to provide an Asian perspective
in shaping the energy debate.
The path towards sustainable de-
velopment requires all countries to
achieve the right balance between
economic growth, environmental pro-
tection and energy security. The stakes
are high and will become higher unless
we get it right early. As Asia continues
its transformation, I am confident that
we will be able to develop smarter en-
ergy solutions for a more sustainable
future. ■
48 insight November 2009
The past two years have been some of
the most momentous in the history of
the oil markets. A frantic commodities
bubble redefined record oil prices and
sent crude oil soaring to over $147 per
barrel (/b) in July 2008. Oil products
skyrocketed as well, boosted by unprec-
edented demand from China in the run-
up to the Olympics. The oil price spikes
were followed by freefall, caused by the
global recession and a demand vacuum.
Crude oil futures dipped below $40/b
in December 2008 before rebound-
ing from mid-February back up to over
$70/b later in the year, despite continu-
ing recession in the OECD countries.
The boom and bust in prices threw
the industry under an unfamiliar me-
dia spotlight as the hue and cry from
wary consumers grew. While the struc-
ture of the energy industry has not
undergone an overnight sea change,
there has been a shift in tone. From in-
tegrated oil & gas companies (IOGs) to
electric utilities (EUs), there is a deep-
ening commitment to finding and us-
ing clean and sustainable alternative
sources of energy.
This has impacted many things from
intensifying the search for cleaner
sources of energy, such as natural gas,
to the way in which crude oil is refined.
IOGs are increasingly focused on find-
ing natural gas; technology for extract-
ing gas from shale and methane beds
has advanced substantially, which is
changing the global balance of energy.
This is leading to an increased desire to
produce LNG to enable its storage and
transportation.
Refining and marketing firms, as well
as IOGs, are increasing their produc-
tion of clean diesel. The pressure to uti-
lize clean alternative sources of energy
in electricity generation, particularly in
Europe, is impacting the physical infra-
top 250 global energy companies
Oil Price History
Redefined
Melanie Wold
Platts Top 250 Global Energy
Company Rankings

reviewed.
Platts Top 250 Global Energy
Company Rankings

measures
financial performance by exam-
ining each company’s assets, reve-
nue, profits, and return on invest-
ed capital. All ranked companies
have assets greater than (US) $2
billion. The underlying data come
from the Capital IQ Compustat
®

database, which is compiled and
maintained by Standard & Poor’s
(like Platts, a division of The
McGraw-Hill Companies). Energy
companies are grouped according
to their Global Industry Classifica-
tion Standard (GICS
®
) code.
November 2009 insight 49
top 250 global energy companies
structure of electricity grids, which were
not designed to deal with intermittent
and distributed energy sources.
But despite all this and the roller
coaster ride that oil prices have taken,
IOGs have retained their global domi-
nance. Thanks in part to last year’s
$100 plus crude oil, IOGs carved out the
top 13 spots in the 2009 Platts Top 250
Energy Company Rankings

, and took
30 of the top 50 places. Platts rankings
are based on a combination of assets,
revenues, profits and return on capital
invested for listed companies with over
$2 billion in assets.
Exxon Mobil Corp retained the num-
ber one spot for the fifth year running.
US, UK, EMEA and Russian IOGs took
two each of the ten top spots with
China and Brazil sharing the limelight
with one each. Latin America is making
a better showing in the top 50 this year;
the newly-listed Ecopetrol of Colombia,
which wasn’t ranked last year, popped
in at 30th on 2009’s list.
Colombia’s mostly state-owned oil
company listed about 10% interest in
its company on the New York Stock Ex-
change (NYSE) in September 2008, and
is planning to use the money raised on
doubling its crude oil production. Bra-
zil’s Petrobras made a leap to 6th place
(from 12th in 2008), owing to addi-
tions to its reserves resulting from its
giant pre-salt layer oil finds.
Asian oil and gas companies took
eight of the top 50 places, with Pet-
roChina topping the Asian chart and
reaching number nine in the overall
top 250. CNOOC grabbed the number
two spot in Asia, jumping up five plac-
es. Otherwise, the top 50 rankings for
all energy companies were dominated
by firms from Europe and the Middle
East, with 25 places overall. The Ameri-
cas were second with 17, eight of which
were from the United States.
Exploration and production (E&P)
companies also benefited from outright
oil price spikes and good demand earlier
in 2008. Canada’s Encana climbed 19
places to number 16 in the top 250 list.
China’s CNOOC leapt 13 places to 21st
in the overall table. E&P companies were
3-year
CGR
Platts
Rank
Rank Company Country Industry
1 China Resources Power Holdings Hong Kong IPP 65.300 243
2 Reliance Infrastructure Ltd India EU 45.796 239
3 PT Bumi Resources Tbk Indonesia C&CF 30.127 146
4 Woodside Petroleum Ltd Australia E&P 29.679 85
5 PTT Plc Thailand IOG 29.108 46
6 Korea Gas Corp Korea GU 27.940 158
7 Formosa Petrochemical Taiwan R&M 27.822 113
8 Reliance Industries Ltd India R&M 27.226 25
9 Yanzhou Coal Mining Co Ltd China C&CF 27.159 124
10 China Shenhua Energy Co Ltd China C&CF 27.048 40
11 Datang Power China IPP 26.973 217
12 PTT Exploration & Production Thailand E&P 26.005 102
13 Petrochina Co Ltd China IOG 24.712 9
14 S-Oil Corp Korea R&M 22.965 120
15 PowerGrid Corp Of India India EU 22.511 244
16 GS Holdings Corp Korea R&M 21.863 164
17 CNOOC Ltd Hong Kong E&P 21.326 21
18 China Petroleum & Chemical Corp China IOG 21.132 23
19 Hong Kong & China Gas Co Ltd Hong Kong GU 20.103 181
20 Bharat Petroleum Co Ltd India R&M 19.970 97
1. Fastest growing Asia companies.
Source: S&P Capital IQ Compustat/Platts
The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was
available then it is a two year CGR.
50 insight November 2009
top 250 global energy companies
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
(GICS
code)
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
1 Exxon Mobil Corp Texas Americas 228,052 6 425,071 2 45,220 1 36.307 2 9.002 IOG
2 Chevron Corp California Americas 161,165 12 264,958 4 23,931 4 25.677 9 12.736 IOG
3 Royal Dutch Shell plc United Kingdom EMEA 282,401 2 458,361 1 26,277 3 18.422 34 14.327 IOG
4 BP plc United Kingdom EMEA 228,238 5 361,143 3 21,157 5 19.307 29 14.626 IOG
5 Total SA France EMEA 167,378 10 221,920 6 14,658 8 16.118 42 9.351 IOG
6 Petrobras Brazil Americas 148,015 13 107,106 14 16,424 7 17.265 39 16.342 IOG
7 Rosneft Oil Company Russian Federation EMEA 77,513 21 67,871 22 11,120 10 22.345 20 42.254 IOG
8 Gazprom Oao Russian Federation EMEA 232,618 4 124,661 10 26,319 2 12.726 64 36.502 IOG
9 Petrochina Co Ltd China Asia/Pacific Rim 174,853 9 156,523 8 16,721 6 13.004 62 24.712 IOG
10 ENI SpA Italy EMEA 164,945 11 149,692 9 12,215 9 14.134 56 13.622 IOG
11 StatoilHydro Norway EMEA 91,892 19 105,244 15 6,984 13 15.985 44 18.628 IOG
12 LUKOIL Oil Company Russian Federation EMEA 71,461 24 107,680 13 9,144 11 15.879 45 27.103 IOG
13 TNK-BP Holdings Russian Federation EMEA 31,179 65 45,128 28 6,384 17 30.166 5 21.936 IOG
14 RWE AG Germany EMEA 132,179 16 65,874 23 4,325 26 12.863 63 5.510 DU
15 Occidental Petroleum Corp California Americas 41,537 47 24,217 59 6,839 14 23.263 17 16.775 IOG
16 Encana Corp Canada Americas 52,740 33 32,012 45 6,329 18 15.380 50 30.314 E&P
17 BG Group plc United Kingdom EMEA 40,296 51 20,594 68 5,125 20 21.156 23 30.826 IOG
18 EDF Energy France EMEA 283,356 1 88,971 17 4,706 22 6.765 124 7.983 EU
19 Enel SpA Italy EMEA 188,454 8 82,463 19 6,994 12 6.533 125 22.674 EU
20 Marathon Oil Corp Texas Americas 42,686 43 72,128 21 3,528 32 12.381 68 7.171 IOG
21 CNOOC Ltd Hong Kong Asia/Pacific Rim 30,261 66 18,090 80 6,484 16 25.488 10 21.326 E&P
22 Repsol YPF SA Spain EMEA 69,929 27 82,539 18 3,752 31 8.474 100 12.050 IOG
23 China Petroleum & Chemical Corp China Asia/Pacific Rim 112,426 18 207,546 7 4,350 24 6.248 134 21.132 IOG
24 Gazprom Neft Russian Federation EMEA 20,205 111 32,410 43 4,658 23 29.654 6 31.257 IOG
25 Reliance Industries Ltd India Asia/Pacific Rim 37,188 56 29,094 48 4,141 28 14.877 52 27.226 R&M
26 Oil & Natural Gas Corp Ltd India Asia/Pacific Rim 26,645 82 20,531 69 4,216 27 24.810 11 17.443 E&P
27 GDF Suez France EMEA 236,556 3 94,016 16 6,723 15 5.585 161 17.859 DU
28 Hess Corp New York Americas 28,589 77 41,165 32 2,360 44 14.641 53 21.862 IOG
29 Surgutneftegas Oao Russian Federation EMEA 36,223 58 19,367 71 5,098 21 13.584 57 8.438 IOG
30 Ecopetrol SA Colombia Americas 22,752 100 15,791 90 5,418 19 33.353 3 29.764 IOG
31 Imperial Oil Ltd Canada Americas 15,536 131 26,035 54 3,374 33 36.626 1 4.113 IOG
32 OMV AG Austria EMEA 30,242 67 35,355 36 1,902 50 11.560 73 17.915 IOG
33 Indian Oil Corp Ltd India Asia/Pacific Rim 26,817 81 43,998 29 1,679 57 13.232 59 16.361 R&M
34 Exelon Corp Illinois Americas 47,817 37 18,859 75 2,717 40 11.452 77 7.087 EU
35 Husky Energy Inc Canada Americas 24,187 94 21,488 65 3,266 34 17.781 37 34.091 IOG
36 Iberdrola SA Spain EMEA 121,437 17 34,875 38 3,959 29 5.865 147 28.996 EU
37 Petro-Canada Canada Americas 27,703 79 23,997 60 2,726 39 13.391 58 16.192 IOG
38 Endesa SA Spain EMEA 82,828 20 30,075 46 3,163 36 5.974 143 7.464 EU
39 Anadarko Petroleum Corp Texas Americas 48,923 35 14,640 96 3,198 35 10.649 80 27.280 E&P
40 China Shenhua Energy Co Ltd China Asia/Pacific Rim 40,765 50 15,655 92 3,885 30 11.551 75 27.048 C&CF
41 Vattenfall Sweden EMEA 58,800 29 22,414 63 2,329 45 7.816 111 8.407 EU
42 Canadian Natural Resources Canada Americas 38,896 52 12,190 116 4,337 25 13.082 60 17.815 E&P
43 Sasol Ltd South Africa EMEA 17,418 124 14,578 98 2,515 42 23.677 15 24.444 IOG
44 Murphy Oil Corp Arkansas Americas 11,149 160 27,441 52 1,740 55 23.819 14 32.938 IOG
45 E.On AG Germany EMEA 222,178 7 120,806 11 1,929 48 2.197 217 18.953 EU
46 PTT Plc Thailand Asia/Pacific Rim 25,750 86 57,825 25 1,494 62 7.847 110 29.108 IOG
47 EnBW Germany EMEA 46,581 38 22,643 62 1,207 81 8.296 103 14.834 EU
48 Suncor Energy Inc Canada Americas 29,665 69 25,655 55 1,859 51 7.911 109 43.262 IOG
49 CEZ AS Czech Republic EMEA 24,848 90 9,604 132 2,516 41 18.461 33 12.383 EU
50 Dominion Resources Inc Virginia Americas 42,053 45 16,290 86 1,853 52 7.260 119 -3.346 DU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
November 2009 insight 51
top 250 global energy companies
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
(GICS
code)
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
51 FPL Group Inc Florida Americas 44,821 40 16,410 85 1,639 58 6.424 130 11.475 EU
52 Eletrobras Brazil Americas 69,940 26 14,576 99 3,055 37 5.728 152 12.109 EU
53 Talisman Energy Inc Canada Americas 22,138 104 8,404 138 2,902 38 17.399 38 7.016 E&P
54 Gas Natural Sdg SA Spain EMEA 26,548 83 18,747 76 1,463 65 9.248 96 16.677 GU
55 EDP Portugal EMEA 50,519 34 18,923 73 1,508 60 5.610 158 13.923 EU
56 TonenGeneral Sekiyu Corp Japan Asia/Pacific Rim 9,443 173 33,011 42 800 106 28.521 7 4.639 R&M
57 Southern Co Georgia Americas 48,347 36 17,127 82 1,807 54 5.588 160 8.111 EU
58 National Grid United Kingdom EMEA 71,685 23 25,605 56 1,506 61 3.339 196 19.338 DU
59 Sunoco Inc Pennsylvania Americas 11,150 159 51,558 26 776 107 15.567 49 18.269 R&M
60 MidAmerican Energy Holdings Iowa Americas 41,441 48 12,668 113 1,850 53 6.442 129 21.199 DU
61 EOG Resources Inc Texas Americas 15,951 127 6,984 155 2,437 43 22.405 19 24.740 E&P
62 Fortum OYJ Finland EMEA 28,688 74 7,801 144 2,134 46 10.328 84 13.281 EU
63 FirstEnergy Corp Ohio Americas 33,521 62 13,580 108 1,342 69 7.720 115 4.241 EU
64 Transneft OJSC Russian Federation EMEA 24,095 96 7,862 142 2,130 47 11.559 74 13.839 S&T
65 Union Fenosa SA Spain EMEA 27,374 80 9,951 129 1,580 59 9.524 93 5.635 EU
66 American Electric Power Co Inc Ohio Americas 45,155 39 14,440 100 1,371 66 5.159 165 6.038 EU
67 PG&E Corp California Americas 40,860 49 14,628 97 1,184 83 5.872 146 7.720 DU
68 Edison International California Americas 44,615 41 14,112 101 1,266 75 5.610 159 5.990 EU
69 XTO Energy Inc Texas Americas 38,254 55 7,692 146 1,912 49 6.524 126 29.829 E&P
70 Williams Companies Inc Oklahoma Americas 26,006 85 12,352 114 1,334 71 7.970 108 -0.617 S&T
71 Entergy Corp Louisiana Americas 36,617 57 13,094 112 1,241 78 6.166 137 9.016 EU
72 AES Corp Virginia Americas 34,806 60 16,102 88 1,216 79 5.066 167 13.249 IPP
73 NTPC Ltd India Asia/Pacific Rim 19,885 115 9,386 133 1,717 56 9.741 91 17.958 IPP
74 SK Energy Co Ltd Korea Asia/Pacific Rim 19,884 116 42,405 30 716 116 6.372 133 n/c R&M
75 Inpex Corp Japan Asia/Pacific Rim 18,518 119 10,856 124 1,463 64 9.681 92 15.183 E&P
76 Erg SpA Italy EMEA 7,845 193 15,915 89 894 101 22.452 18 8.676 R&M
77 Duke Energy Corp North Carolina Americas 53,077 32 13,207 111 1,279 74 3.718 190 -7.609 EU
78 Public Service Enterprise Group Inc New Jersey Americas 29,049 73 13,807 106 987 94 6.200 136 3.564 DU
79 Kinder Morgan Energy Partners LP Texas Americas 17,886 122 11,740 118 1,304 73 9.058 97 6.253 S&T
80 Nexen Inc Canada Americas 20,205 112 7,027 153 1,492 63 10.431 83 20.472 E&P
81 Sempra Energy California Americas 26,400 84 10,758 126 1,123 86 7.403 116 -2.861 DU
82 Enbridge Inc Canada Americas 22,527 102 14,033 104 1,155 84 6.495 127 24.037 S&T
83 YPF Argentina Americas 10,437 164 10,465 127 1,092 88 16.839 40 15.050 IOG
84 Suez Environnement SA France EMEA 27,886 78 17,113 83 738 113 5.752 151 3.684 DU
85 Woodside Petroleum Ltd Australia Asia/Pacific Rim 11,945 154 4,541 179 1,354 67 18.060 35 29.679 E&P
86 CLP Holdings Hong Kong Asia/Pacific Rim 17,136 125 6,988 154 1,341 70 9.753 90 12.061 EU
87 Consolidated Edison Inc New York Americas 33,498 63 13,583 107 933 100 4.812 170 5.130 DU
88 Mol Hungarian Oil Hungary EMEA 14,553 138 18,605 78 744 111 7.215 120 12.920 IOG
89 Veolia Environnement France EMEA 69,501 28 50,113 27 306 176 0.831 227 12.772 DU
90 TransCanada Corp Canada Americas 35,945 59 7,498 147 1,253 76 4.395 178 12.066 S&T
91 PPL Corp Pennsylvania Americas 21,405 106 8,044 141 940 98 7.348 117 8.956 EU
92 Noble Energy Inc Texas Americas 12,384 152 3,727 196 1,350 68 15.789 47 21.152 E&P
93 Enersis SA Chile Americas 25,701 87 11,602 121 996 93 5.159 166 27.404 EU
94 Peabody Energy Corp Missouri Americas 9,822 172 6,593 160 985 95 16.293 41 12.389 C&CF
95 NRG Energy Inc New Jersey Americas 24,808 91 6,885 156 1,016 92 6.378 132 36.485 IPP
96 Acciona SA Spain EMEA 54,409 31 17,531 81 521 138 1.520 222 37.682 EU
97 Bharat Petroleum Co Ltd India Asia/Pacific Rim 10,117 168 23,599 61 375 158 10.105 86 19.970 R&M
98 China Coal Energy Co China Asia/Pacific Rim 12,912 147 7,451 148 1,043 90 9.787 89 19.262 C&CF
99 Spectra Energy Corp Texas Americas 21,924 105 5,074 173 1,129 85 7.773 113 -18.733 S&T
100 Alpiq Holding AG Switzerland EMEA 9,904 171 11,606 120 647 120 12.028 71 14.703 EU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
52 insight November 2009
top 250 global energy companies
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
(GICS
code)
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
101 Mirant Corp Georgia Americas 10,688 162 3,188 211 1,215 80 19.008 30 -8.664 IPP
102 PTT Exploration & Production Thailand Asia/Pacific Rim 6,931 203 3,952 190 1,204 82 27.309 8 26.005 E&P
103 International Power plc United Kingdom EMEA 24,325 93 6,262 163 1,093 87 5.976 142 25.501 IPP
104 VEO Austria EMEA 11,734 155 5,183 171 950 96 12.588 65 14.317 EU
105 CEMIG Brazil Americas 12,332 153 5,422 167 940 99 11.965 72 9.761 EU
106 Energy Transfer Partners LP Texas Americas 10,627 163 9,294 135 866 102 9.251 95 14.639 S&T
107 Plains All American Pipeline LP Texas Americas 10,032 170 30,061 47 437 148 6.416 131 -1.208 S&T
108 Progress Energy Inc North Carolina Americas 29,873 68 9,167 136 773 109 3.929 188 -3.205 EU
109 Apache Corp Texas Americas 29,186 72 12,328 115 712 117 3.313 197 18.241 E&P
110 Canadian Oil Sands Trust Canada Americas 6,323 216 3,627 200 1,325 72 24.182 13 28.455 E&P
111 Chesapeake Energy Corp Oklahoma Americas 38,444 54 11,629 119 723 115 2.044 218 35.588 E&P
112 Distrigas SA Belgium EMEA 6,311 217 8,217 140 550 132 22.319 21 15.997 GU
113 Formosa Petrochemical Taiwan Asia/Pacific Rim 13,210 145 26,886 53 467 142 4.676 172 27.822 R&M
114 Xcel Energy Inc Minnesota Americas 24,958 89 11,203 123 646 121 4.334 180 5.190 DU
115 Santos Ltd Australia Asia/Pacific Rim 7,843 194 2,094 229 1,251 77 23.589 16 3.893 E&P
116 Tokyo Electric Power Co Inc Japan Asia/Pacific Rim 142,015 15 59,391 24 -853 243 -0.935 236 3.858 EU
117 ConocoPhillips Texas Americas 142,865 14 225,424 5 -16,998 250 -19.095 250 11.549 IOG
118 Penn West Energy Trust Canada Americas 14,055 141 3,839 191 1,062 89 8.790 98 41.308 E&P
119 CEPSA Spain EMEA 13,653 144 34,831 39 380 157 4.346 179 11.061 IOG
120 S-Oil Corp Korea Asia/Pacific Rim 6,145 219 18,624 77 360 163 12.492 67 22.965 R&M
121 Kyushu Electric Power Co Inc Japan Asia/Pacific Rim 43,056 42 15,375 93 343 170 1.180 225 2.831 EU
122 Edison SpA Italy EMEA 21,353 107 15,317 94 484 141 3.374 194 18.501 IPP
123 Tenaga Nasional Bhd Malaysia Asia/Pacific Rim 20,020 114 7,376 150 743 112 5.467 162 10.709 EU
124 Yanzhou Coal Mining Co Ltd China Asia/Pacific Rim 4,703 238 3,817 192 947 97 24.380 12 27.159 C&CF
125 Kansai Electric Power Co Japan Asia/Pacific Rim 73,002 22 28,140 50 -89 234 -0.194 234 2.650 EU
126 Addax Petroleum Corp Canada Americas 5,935 220 4,000 187 835 103 18.565 32 57.587 E&P
127 Scottish & Southern Energy United Kingdom EMEA 28,646 75 41,666 31 184 218 1.536 221 35.830 EU
128 Ameren Corp Missouri Americas 22,657 101 7,839 143 615 125 4.405 177 4.957 DU
129 ONEOK Partners LP Oklahoma Americas 7,254 200 7,720 145 626 124 11.364 78 124.912 S&T
130 Endesa Chile Americas 12,748 149 4,347 183 772 110 7.989 107 30.425 IPP
131 CONSOL Energy Inc Pennsylvania Americas 7,370 198 4,521 180 442 146 20.650 25 9.806 C&CF
132 Tupras Turkey EMEA 5,588 225 21,092 66 299 179 10.646 81 27.068 R&M
133 DTE Energy Co Michigan Americas 24,590 92 9,329 134 526 137 3.817 189 1.122 DU
134 Tokyo Gas Co Ltd Japan Asia/Pacific Rim 18,477 120 16,747 84 421 150 3.249 201 9.441 GU
135 Chubu Electric Power Co Inc Japan Asia/Pacific Rim 57,292 30 25,319 58 -191 236 -0.521 235 5.287 EU
136 Nippon Oil Corp Japan Asia/Pacific Rim 41,577 46 74,539 20 -2,538 248 -13.907 248 6.495 R&M
137 CPFL Energia SA Brazil Americas 8,229 187 4,832 176 635 123 11.550 76 10.811 EU
138 Valero Energy Corp Texas Americas 34,417 61 118,298 12 -1,131 245 -5.168 245 13.288 R&M
139 Hongkong Electric Holdings Ltd Hong Kong Asia/Pacific Rim 8,829 181 1,644 237 1,033 91 14.259 55 3.198 EU
140 KEPCO Korea Asia/Pacific Rim 70,312 25 25,440 57 -2,382 247 -4.575 244 7.444 EU
141 Questar Corp Utah Americas 8,631 182 3,465 203 684 119 12.373 69 8.340 GU
142 Enterprise GP Holdings LP Texas Americas 25,371 88 35,470 35 164 222 0.743 230 42.503 S&T
143 Eletropaulo Brazil Americas 6,361 215 3,749 194 511 139 19.780 27 -3.277 EU
144 CenterPoint Energy Inc Texas Americas 19,676 118 11,322 122 447 145 3.659 191 5.210 DU
145 Centrica plc United Kingdom EMEA 29,577 70 34,981 37 -238 237 -1.907 239 16.649 DU
146 PT Bumi Resources Tbk Indonesia Asia/Pacific Rim 5,320 230 3,378 207 645 122 20.954 24 30.127 C&CF
147 Hindustan Petroleum Corp Ltd India Asia/Pacific Rim 9,161 180 21,659 64 289 187 5.728 153 17.811 R&M
148 Gail (India) Ltd India Asia/Pacific Rim 5,355 228 3,996 188 590 126 16.042 43 15.179 GU
149 ONEOK Inc Oklahoma Americas 13,126 146 16,157 87 312 174 4.284 182 8.424 GU
150 Tesoro Corp Texas Americas 7,433 197 28,031 51 278 192 5.759 150 19.387 R&M
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
November 2009 insight 53
top 250 global energy companies
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
(GICS
code)
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
151 Novatek Oao Russian Federation EMEA 4,540 239 2,769 218 811 105 19.643 28 26.944 E&P
152 Idemitsu Kosan Co Ltd Japan Asia/Pacific Rim 23,983 97 38,317 34 34 231 0.357 232 4.513 R&M
153 Tohoku Electric Power Co Inc Japan Asia/Pacific Rim 42,097 44 18,594 79 -321 240 -1.157 238 3.551 EU
154 Drax Group United Kingdom EMEA 3,397 250 2,873 214 546 133 31.908 4 23.586 IPP
155 NiSource Inc Indiana Americas 20,032 113 8,874 137 370 159 3.465 193 3.956 DU
156 A2A SpA Italy EMEA 15,770 129 8,254 139 437 147 3.991 187 27.045 DU
157 Snam Rete Gas SpA Italy EMEA 15,883 128 2,627 222 734 114 6.041 141 1.783 GU
158 Korea Gas Corp Korea Asia/Pacific Rim 17,563 123 18,874 74 264 195 2.274 215 27.940 GU
159 Osaka Gas Co Ltd Japan Asia/Pacific Rim 15,212 134 13,384 110 364 162 3.177 203 7.569 GU
160 Enerplus Resources Fund Canada Americas 5,682 223 1,712 233 773 108 15.727 48 19.840 E&P
161 Frontline Ltd Bermuda Americas 4,028 243 2,086 230 699 118 21.217 22 11.606 S&T
162 Linn Energy LLC Texas Americas 4,722 237 1,435 242 826 104 18.704 31 n/c E&P
163 Enbridge Energy Partners LP Texas Americas 8,301 185 10,060 128 403 151 5.695 155 15.809 S&T
164 GS Holdings Corp Korea Asia/Pacific Rim 18,424 121 32,342 44 90 229 0.890 226 21.863 R&M
165 Saudi Electricity Co Saudi Arabia EMEA 38,809 53 5,950 165 295 184 1.740 219 5.911 EU
166 Southwestern Energy Co Texas Americas 4,760 235 2,312 226 568 129 17.792 36 50.631 E&P
167 Abu Dhabi National Energy Co United Arab Emirates EMEA 23,519 98 4,509 181 497 140 2.798 209 84.974 DU
168 Tractebel Energia SA Brazil Americas 4,226 241 1,713 232 555 130 20.587 26 9.795 IPP
169 SNP Petrom Romania EMEA 8,424 184 6,030 164 365 161 6.791 122 16.223 IOG
170 Pepco Holdings Inc District of Columbia Americas 16,475 126 10,824 125 300 177 3.133 204 10.304 EU
171 Nippon Mining Hldgs Inc Japan Asia/Pacific Rim 19,754 117 41,006 33 -412 241 -4.089 242 10.337 R&M
172 OAO Tatneft Russian Federation EMEA 12,752 148 15,729 91 298 181 2.447 214 13.967 E&P
173 Iberdrola Renewables SA Spain EMEA 28,601 76 2,810 216 540 135 2.764 211 53.876 IPP
174 COPEL Brazil Americas 6,714 206 2,650 221 537 136 10.936 79 3.124 EU
175 Devon Energy Corp Oklahoma Americas 31,908 64 15,211 95 -3,079 249 -13.573 247 12.298 E&P
176 PKN ORLEN Poland EMEA 15,473 132 28,859 49 -239 239 -2.634 240 24.527 R&M
177 China Yangtze Power Co China Asia/Pacific Rim 8,454 183 1,287 245 574 127 8.134 105 6.654 IPP
178 Chugoku Electric Power Co Japan Asia/Pacific Rim 29,390 71 11,840 117 -238 238 -1.129 237 4.105 EU
179 Galp Energia SGPS SA Portugal EMEA 9,370 175 20,881 67 162 223 3.313 198 10.649 IOG
180 Cosmo Oil Co Ltd Japan Asia/Pacific Rim 15,086 135 34,582 40 -932 244 -13.508 246 8.680 R&M
181 Hong Kong & China Gas Co Ltd Hong Kong Asia/Pacific Rim 6,703 208 1,590 238 554 131 9.804 88 20.103 GU
182 Wisconsin Energy Corp Wisconsin Americas 12,618 151 4,431 182 359 164 4.819 169 5.111 DU
183 SCANA Corp South Carolina Americas 11,502 157 5,319 169 353 167 4.602 173 3.647 DU
184 EWE Germany EMEA 10,225 166 7,439 149 285 189 5.205 163 13.421 EU
185 Constellation Energy Group Inc Maryland Americas 22,284 103 19,818 70 -1,301 246 -15.481 249 4.975 IPP
186 Showa Shell Sekiyu KK Japan Asia/Pacific Rim 12,673 150 33,014 41 -164 235 -4.111 243 12.995 R&M
187 CMS Energy Corp Michigan Americas 14,901 136 6,821 157 300 178 3.195 202 2.749 DU
188 Allegheny Energy Inc Pennsylvania Americas 10,811 161 3,386 206 395 153 5.640 157 3.682 EU
189 Gasunie Netherlands EMEA 14,055 142 2,179 228 545 134 4.521 174 6.047 GU
190 Cheung Kong Infrastructure Bermuda Asia/Pacific Rim 5,807 221 315 250 569 128 10.570 82 2.855 EU
191 Integrys Energy Group Inc Illinois Americas 14,273 139 14,048 103 125 226 2.238 216 26.360 DU
192 EGL Switzerland EMEA 6,730 205 3,736 195 282 190 9.308 94 1.275 EU
193 Arc Energy Trust Canada Americas 3,435 249 1,210 246 464 143 15.876 46 18.199 E&P
194 Arch Coal Inc Missouri Americas 3,979 244 2,984 213 354 166 12.529 66 4.931 C&CF
195 Shikoku Electric Power Co Japan Asia/Pacific Rim 14,722 137 6,407 161 294 186 2.992 207 3.830 EU
196 Polish Oil And Gas Co Poland EMEA 9,338 176 6,688 158 314 173 4.169 184 13.639 IOG
197 MDU Resources Group Inc North Dakota Americas 6,588 211 5,003 174 294 185 6.767 123 13.132 DU
198 Encore Acquisition Co Texas Americas 3,633 247 1,135 247 431 149 15.369 51 35.408 E&P
199 Terna SpA Italy EMEA 9,285 177 1,784 231 454 144 5.931 144 7.981 EU
200 Cameco Corp Canada Americas 6,393 213 2,487 223 392 154 8.054 106 29.627 C&CF
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
54 insight November 2009
top 250 global energy companies
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
(GICS
code)
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
201 Origin Energy Ltd Australia Asia/Pacific Rim 10,056 169 6,274 162 282 191 4.466 176 18.969 IOG
202 Ultrapar Participacoes SA Brazil Americas 4,898 232 14,074 102 194 216 5.819 148 81.937 S&T
203 Electric Power Development Co Japan Asia/Pacific Rim 21,005 109 7,111 152 196 215 1.206 224 4.264 IPP
204 Denbury Resources Inc Texas Americas 3,590 248 1,361 243 388 155 14.423 54 34.671 E&P
205 Red Electrica Corp SA Spain EMEA 8,224 188 1,566 241 396 152 6.895 121 9.566 EU
206 Northeast Utilities Massachusetts Americas 13,988 143 5,800 166 266 194 3.291 200 -7.788 EU
207 Calpine Corp California Americas 20,738 110 9,937 130 -13 233 -0.092 233 -0.582 IPP
208 AES Elpa SA Brazil Americas 6,874 204 3,690 197 231 205 8.323 102 -3.962 EU
209 Huaneng Power International China Asia/Pacific Rim 24,099 95 9,911 131 -541 242 -3.352 241 19.001 IPP
210 Neste Oil Oyj Finland EMEA 6,678 209 19,143 72 134 224 3.124 205 11.511 R&M
211 United Utilities Group plc United Kingdom EMEA 15,712 130 3,990 189 296 182 2.719 212 0.665 DU
212 Tullow Oil plc United Kingdom EMEA 4,727 236 1,134 248 366 160 12.371 70 15.817 E&P
213 Alliant Energy Corp Wisconsin Americas 8,202 189 3,682 198 299 180 5.812 149 3.930 DU
214 Acea SpA Italy EMEA 7,886 192 4,230 184 257 197 5.890 145 24.768 DU
215 Energen Corp Alabama Americas 3,775 246 1,569 240 322 171 13.007 61 11.612 GU
216 Canadian Utilities Canada Americas 7,172 201 2,417 224 388 156 6.077 138 3.371 DU
217 Datang Power China Asia/Pacific Rim 23,029 99 5,383 168 120 227 0.801 229 26.973 IPP
218 Eskom South Africa EMEA 21,280 108 4,986 175 166 221 1.386 223 1.123 EU
219 TEPPCO Partners LP Texas Americas 5,050 231 13,533 109 194 217 4.697 171 16.230 S&T
220 Enagas SA Spain EMEA 6,675 210 1,670 236 358 165 7.283 118 -7.249 GU
221 UGI Corp Pennsylvania Americas 5,685 222 6,648 159 216 211 6.046 140 10.791 GU
222 Pengrowth Energy Trust Canada Americas 4,849 233 1,683 235 344 169 8.688 99 18.364 E&P
223 Overseas Shipholding Group Inc New York Americas 3,890 245 1,705 234 318 172 9.863 87 19.446 S&T
224 MVV Energie AG Germany EMEA 5,358 227 3,668 199 235 203 7.788 112 9.431 DU
225 Range Resources Corp Texas Americas 5,563 226 1,301 244 346 168 8.148 104 34.191 E&P
226 National Fuel Gas Co New York Americas 4,130 242 2,400 225 269 193 10.325 85 7.661 GU
227 NuStar Energy LP Texas Americas 4,460 240 4,829 177 254 199 6.227 135 94.176 R&M
228 NSTAR Massachusetts Americas 8,269 186 3,345 209 240 201 5.690 156 1.040 DU
229 Southern Union Co Texas Americas 7,998 190 3,070 212 295 183 4.967 168 14.986 S&T
230 AGL Energy Australia Asia/Pacific Rim 7,564 196 4,117 185 240 200 4.467 175 3.372 DU
231 Nicor Inc Illinois Americas 4,784 234 3,777 193 120 228 8.405 101 3.996 GU
232 OGE Energy Corp Oklahoma Americas 6,519 212 4,071 186 231 206 5.701 154 -11.876 DU
233 AGL Resources Inc Georgia Americas 6,710 207 2,800 217 217 210 6.460 128 0.996 GU
234 Hokuriku Electric Power Co Japan Asia/Pacific Rim 15,228 133 5,292 170 75 230 0.643 231 2.948 EU
235 Hellenic Petroleum SA Greece EMEA 7,280 199 14,023 105 33 232 0.809 228 15.047 R&M
236 Petrobras Energia SA Argentina Americas 6,178 218 4,554 178 233 204 5.163 164 12.510 IOG
237 Atmos Energy Corp Texas Americas 6,387 214 7,221 151 180 219 4.322 181 13.237 GU
238 EVN Austria EMEA 9,389 174 3,336 210 259 196 4.059 186 14.411 EU
239 Reliance Infrastructure Ltd India Asia/Pacific Rim 5,625 224 2,652 220 287 188 6.065 139 45.796 EU
240 Pinnacle West Capital Corp Arizona Americas 11,620 156 3,367 208 214 212 3.297 199 4.062 EU
241 EQT Corp Pennsylvania Americas 5,330 229 1,576 239 256 198 7.747 114 7.935 GU
242 Dynegy Inc Texas Americas 14,213 140 3,549 201 171 220 1.620 220 15.339 IPP
243 China Resources Power Holdings Hong Kong Asia/Pacific Rim 10,276 165 3,445 204 221 208 2.943 208 65.300 IPP
244 PowerGrid Corp Of India India Asia/Pacific Rim 9,189 178 981 249 307 175 4.278 183 22.511 EU
245 NV Energy Inc Nevada Americas 11,346 158 3,528 202 209 213 2.487 213 5.202 EU
246 Fortis Inc Canada Americas 10,194 167 3,395 205 225 207 2.783 210 39.751 EU
247 Hera SpA Italy EMEA 7,789 195 5,144 172 131 225 3.007 206 29.012 DU
248 Atco Ltd Canada Americas 7,910 191 2,841 215 236 202 3.635 192 4.525 DU
249 Pioneer Natural Resources Co Texas Americas 9,163 179 2,277 227 221 209 3.343 195 0.919 E&P
250 Transalta Corp Canada Americas 7,127 202 2,705 219 204 214 4.126 185 3.092 IPP
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
November 2009 insight 55
top 250 global energy companies
prominent in the top 50 fastest grow-
ing list and made up 30% of the fastest
growing companies from the Americas,
led by Addax Petroleum, which has re-
cently been taken over by China’s Sino-
pec, and Southwestern Energy.
Oil price moves also meant that 16
oil storage and transportation compa-
nies made the top 250 in 2009 vs 13
in 2008, having reaped the benefits of
a contango market which lasted a good
part of 2008. Owners of oil storage and
natural gas pipelines were the main ben-
eficiaries. Waterborne oil shipping sank
along with demand in 2008, but perked
up again in 2009 as contango led oil
companies to utilize floating storage.
Refining Takes it on the Chin
The picture for the oil & gas indus-
try was not all rosy, however. Refining
and marketing firms, having started
2008 with good demand and healthy
margins, suffered greatly from the eco-
nomic downturn as demand dropped
and margins shrank. The worldwide
recession heralded a compression in re-
fining margins with people driving less
and upgrading to more fuel-efficient
cars. Crude oil prices remained relative-
ly high as the appetite for commodities
exposure continued, while products in-
cluding gasoline and heating oil fell.
ConocoPhillips, which is heavily de-
pendent upon refining, saw its revenues
fall by 27% for the financial year 2008.
ConocoPhillips fell from number 16 in
2008 to 117th in Platts 2009 rankings.
Valero suffered a similar fate, falling
from 14th to 138th and is closing down
refineries in 2009. Sunoco appeared to
have a delayed reaction, largely thanks
to diesel demand from Asia, coming in
at fourth place in the R&M table and
59th overall. This year, however, Suno-
co is also in the process of shutting
down refining capacity.
Two Indian R&Ms led the table with
Reliance Industries in first place (25th
overall). Reliance bested its rivals in
Asia, owing to its sophisticated refinery
system, which optimizes cheaper heavy
crude oil. Indian Oil Corp was second
(33rd overall) and Japan was third with
TonenGeneral Sekiyu (56th overall).
Major Majors
The major integrated oil and gas
companies did not have a smooth ride
on their way to dominating the top
10. All were hit by falling oil prices in
last-quarter 2008 and sinking demand
throughout first-half 2009. And, in the
US, they narrowly averted a massive
strike of United Steelworkers early in
2009, who were negotiating a new con-
tract with Royal Dutch Shell. The strike
could have paralyzed over 50% of the
US’s refinery capacity.
The US grabbed two spots in the top
10, with ExxonMobil in the number one
position and Chevron in second place.
ExxonMobil made the top of the list for
the fifth year in a row, with revenues of
3-year
CGR
Platts
Rank
Rank Company State or country Industry
1 ONEOK Partners LP Oklahoma S&T 124.912 129
2 NuStar Energy LP Texas R&M 94.176 227
3 Ultrapar Participacoes SA Brazil S&T 81.937 202
4 Addax Petroleum Corp Canada E&P 57.587 126
5 Southwestern Energy Co Texas E&P 50.631 166
6 Suncor Energy Inc Canada IOG 43.262 48
7 Enterprise GP Holdings LP Texas S&T 42.503 142
8 Penn West Energy Trust Canada E&P 41.308 118
9 Fortis Inc Canada EU 39.751 246
10 NRG Energy Inc New Jersey IPP 36.485 95
2. Fastest growing Americas companies.
Source: S&P Capital IQ Compustat/Platts
The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was
available then it is a two year CGR.
56 insight November 2009
top 250 global energy companies
Top
Asia
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
Industry
(GICS
code)
Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank
1 9 Petrochina Co Ltd China 174,853 9 156,523 8 16,721 6 13.004 62 IOG
2 21 CNOOC Ltd Hong Kong 30,261 66 18,090 80 6,484 16 25.488 10 E&P
3 23 China Petroleum & Chemical Corp China 112,426 18 207,546 7 4,350 24 6.248 134 IOG
4 25 Reliance Industries Ltd India 37,188 56 29,094 48 4,141 28 14.877 52 R&M
5 26 Oil & Natural Gas Corp Ltd India 26,645 82 20,531 69 4,216 27 24.810 11 E&P
6 33 Indian Oil Corp Ltd India 26,817 81 43,998 29 1,679 57 13.232 59 R&M
7 40 China Shenhua Energy Co Ltd China 40,765 50 15,655 92 3,885 30 11.551 75 C&CF
8 46 PTT Plc Thailand 25,750 86 57,825 25 1,494 62 7.847 110 IOG
9 56 TonenGeneral Sekiyu Corp Japan 9,443 173 33,011 42 800 106 28.521 7 R&M
10 73 NTPC Ltd India 19,885 115 9,386 133 1,717 56 9.741 91 IPP
11 74 SK Energy Co Ltd Korea 19,884 116 42,405 30 716 116 6.372 133 R&M
12 75 Inpex Corp Japan 18,518 119 10,856 124 1,463 64 9.681 92 E&P
13 85 Woodside Petroleum Ltd Australia 11,945 154 4,541 179 1,354 67 18.060 35 E&P
14 86 CLP Holdings Hong Kong 17,136 125 6,988 154 1,341 70 9.753 90 EU
15 97 Bharat Petroleum Co Ltd India 10,117 168 23,599 61 375 158 10.105 86 R&M
16 98 China Coal Energy Co China 12,912 147 7,451 148 1,043 90 9.787 89 C&CF
17 102 PTT Exploration & Production Thailand 6,931 203 3,952 190 1,204 82 27.309 8 E&P
18 113 Formosa Petrochemical Taiwan 13,210 145 26,886 53 467 142 4.676 172 R&M
19 115 Santos Ltd Australia 7,843 194 2,094 229 1,251 77 23.589 16 E&P
20 116 Tokyo Electric Power Co Inc Japan 142,015 15 59,391 24 -853 243 -0.935 236 EU
21 120 S-Oil Corp Korea 6,145 219 18,624 77 360 163 12.492 67 R&M
22 121 Kyushu Electric Power Co Inc Japan 43,056 42 15,375 93 343 170 1.180 225 EU
23 123 Tenaga Nasional Bhd Malaysia 20,020 114 7,376 150 743 112 5.467 162 EU
24 124 Yanzhou Coal Mining Co Ltd China 4,703 238 3,817 192 947 97 24.380 12 C&CF
25 125 Kansai Electric Power Co Japan 73,002 22 28,140 50 -89 234 -0.194 234 EU
26 134 Tokyo Gas Co Ltd Japan 18,477 120 16,747 84 421 150 3.249 201 GU
27 135 Chubu Electric Power Co Inc Japan 57,292 30 25,319 58 -191 236 -0.521 235 EU
28 136 Nippon Oil Corp Japan 41,577 46 74,539 20 -2,538 248 -13.907 248 R&M
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
Industry Company Country Platts Rank 2009
IOG Petrochina Co Ltd China 9
E&P CNOOC Ltd Hong Kong 21
R&M Reliance Industries Ltd India 25
C&CF China Shenhua Energy Co Ltd China 40
IPP NTPC Ltd India 73
EU CLP Holdings Hong Kong 86
GU Tokyo Gas Co Ltd Japan 134
DU AGL Energy Australia 230
3. #1 in Asia by industry.
Source: S&P Capital IQ Compustat/Platts
$425 billion. The Western major’s 2008
fourth-quarter net income took a 33%
blow, owing to the plunge in oil prices,
but then still finished the year with re-
cord profits.
In 2009, market conditions have re-
mained challenging, causing Exxon-
Mobil’s net income to drop 66% in the
second quarter. The firm faced criticism
after output fell in 2008 to its lowest
level since Mobil was acquired in 1999.
The company is now spending billions
to find new reserves. ExxonMobil will
also spend over $1 billion at two US
refineries, as well as one in Belgium
to improve its output of clean diesel
by 10%. It also saw start-up this year
of production from its new giant LNG
trains in Qatar.
Chevron moved into second place
in 2009 from fourth place in 2008,
having brought on-stream some sig-
nificant new fields and improved its
upstream revenues by about 50%.
Chevron started up new projects in
the US Gulf of Mexico and Indonesia
in 2008, while it nearly doubled pro-
duction capacity from the giant Ten-
giz field in Kazakhstan.
November 2009 insight 57
top 250 global energy companies
Top
Asia
Platts
Rank
2009
Assets Revenues Profits
Return on
invested capital
Industry
(GICS
code)
Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank
29 139 Hongkong Electric Holdings Ltd Hong Kong 8,829 181 1,644 237 1,033 91 14.259 55 EU
30 140 KEPCO Korea 70,312 25 25,440 57 -2,382 247 -4.575 244 EU
31 146 PT Bumi Resources Tbk Indonesia 5,320 230 3,378 207 645 122 20.954 24 C&CF
32 147 Hindustan Petroleum Corp Ltd India 9,161 180 21,659 64 289 187 5.728 153 R&M
33 148 Gail (India) Ltd India 5,355 228 3,996 188 590 126 16.042 43 GU
34 152 Idemitsu Kosan Co Ltd Japan 23,983 97 38,317 34 34 231 0.357 232 R&M
35 153 Tohoku Electric Power Co Inc Japan 42,097 44 18,594 79 -321 240 -1.157 238 EU
36 158 Korea Gas Corp Korea 17,563 123 18,874 74 264 195 2.274 215 GU
37 159 Osaka Gas Co Ltd Japan 15,212 134 13,384 110 364 162 3.177 203 GU
38 164 GS Holdings Corp Korea 18,424 121 32,342 44 90 229 0.890 226 R&M
39 171 Nippon Mining Hldgs Inc Japan 19,754 117 41,006 33 -412 241 -4.089 242 R&M
40 177 China Yangtze Power Co China 8,454 183 1,287 245 574 127 8.134 105 IPP
41 178 Chugoku Electric Power Co Japan 29,390 71 11,840 117 -238 238 -1.129 237 EU
42 180 Cosmo Oil Co Ltd Japan 15,086 135 34,582 40 -932 244 -13.508 246 R&M
43 181 Hong Kong & China Gas Co Ltd Hong Kong 6,703 208 1,590 238 554 131 9.804 88 GU
44 186 Showa Shell Sekiyu KK Japan 12,673 150 33,014 41 -164 235 -4.111 243 R&M
45 190 Cheung Kong Infrastructure Bermuda 5,807 221 315 250 569 128 10.570 82 EU
46 195 Shikoku Electric Power Co Japan 14,722 137 6,407 161 294 186 2.992 207 EU
47 201 Origin Energy Ltd Australia 10,056 169 6,274 162 282 191 4.466 176 IOG
48 203 Electric Power Development Co Japan 21,005 109 7,111 152 196 215 1.206 224 IPP
49 209 Huaneng Power International China 24,099 95 9,911 131 -541 242 -3.352 241 IPP
50 217 Datang Power China 23,029 99 5,383 168 120 227 0.801 229 IPP
51 230 AGL Energy Australia 7,564 196 4,117 185 240 200 4.467 175 DU
52 234 Hokuriku Electric Power Co Japan 15,228 133 5,292 170 75 230 0.643 231 EU
53 239 Reliance Infrastructure Ltd India 5,625 224 2,652 220 287 188 6.065 139 EU
54 243 China Resources Power Holdings Hong Kong 10,276 165 3,445 204 221 208 2.943 208 IPP
55 244 Power Grid Corp Of India India 9,189 178 981 249 307 175 4.278 183 EU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer.
Industry Company Country 3-year CGR Platts Rank 2009
IPP China Resources Power Holdings Hong Kong 65.300 243
EU Reliance Infrastructure Ltd India 45.796 239
C&CF PT Bumi Resources Tbk Indonesia 30.127 146
E&P Woodside Petroleum Ltd Australia 29.679 85
IOG PTT Plc Thailand 29.108 46
GU Korea Gas Corp Korea 27.940 158
R&M Formosa Petrochemical Taiwan 27.822 113
DU AGL Energy Australia 3.372 230
4. Fastest growing Top 250 Asian companies by industry.
Source: S&P Capital IQ Compustat/Platts
Third place Royal Dutch Shell’s $458
billion revenues dwarfed even Exxon-
Mobil’s. Voted “Energy Company of the
Year” at the 10th annual Platts Global
Energy Awards last year, Shell is invest-
ing heavily in LNG production as well
as carbon capture and storage. It has
also, in 2009, made a major commit-
ment towards Floating LNG, while work
progresses in Qatar on what will be the
world’s largest Gas-to-Liquids plant.
BP moved up one place to fourth po-
sition, having finally resolved the battle
for control over TNK-BP with partners
Alfa-Access-Renova in September 2008.
BP has also been sorting out several
problems with its US refineries, includ-
ing Texas City, which suffered a fatal
explosion in 2005. BP’s fortunes may,
however, be turning after it made a gi-
ant oil find in the Gulf of Mexico in
September 2009.
PetroChina was the only Asian IOG
representative in the top ten. Russians
Rosneft and Gazprom came in eighth
and ninth, while Italy’s ENI was num-
ber ten. Gazprom ranked number two
in terms of profitability, second only to
ExxonMobil.
58 insight November 2009
The Tiger Continues to Roar
China, Hong Kong and India ruled
Asia and the Pacific Rim tables as oil
and coal demand continued to grow
across the region. The recession dented
demand there as well as elsewhere, but
China’s seemingly endless thirst re-
turned in the second half of 2009.
PetroChina briefly became the world’s
largest firm in May 2009 before Exxon-
Mobil edged it out again in October. The
firm led the Asian table as refining mar-
gins improved; the Chinese government
has embarked on a plan to slowly reduce
subsidies on oil products, making them
more profitable for oil refiners. PetroChi-
na was followed by E&P giant CNOOC in
second place and Indian R&M Reliance
industries in third. New to the ranks of
the Asian top energy companies by in-
dustry catagory were NTPC, India’s largest
power company, Tokyo Gas Co., and AGL
Energy, an Australian distributed utility.
Asia dominated the coal and consum-
able fuels (C&CF) market with three of
the top eight firms coming from China,
and one from Indonesia. China Shenhua
Energy came in at number one in the in-
dustry, with China Coal Energy third and
Yanzhou Coal Mining fourth. Newcomer
to the list PT Bumi Resources in Indone-
sia took sixth place. India is actively trad-
ing coal and buying coal mines overseas,
but no Indian company has yet made the
top ten in the C&CF category.
Chinese and Indian demand for coal
pushed prices to new heights in 2008,
prompting further concern over the coun-
tries’ greenhouse gas emissions. In 2009,
China and India pledged to substantially
reduce emissions, and Shenhua signed an
agreement in October to work with Shell
to develop clean coal technology.
Asian companies made up more than
20% of the 50 fastest growing compa-
nies list, and also took 30% of the top
10 places in the R&M category. Reliance
Industries and Indian Oil Corporation
were first and second, with TonenGen-
eral Sekiyu of Japan third.
European Utilities Bloom
Eight of the top ten electric utilities in
Platts 2009 rankings were from Europe.
Boosted by the European Commission’s
20-20-20 targets, which mandates that
20% of energy generation comes from re-
newable sources by 2020, Europe is lead-
ing the world in solar, wind and hydro
power expansion. Spain, France and Ger-
many are leading the rush to smart grid
technology development in EMEA.
France’s EDF Energy ranked first in the
European leading companies table. Also
ranked number one in terms of assets,
EDF has been on a buying spree; it took
over UK nuclear provider British Energy
in 2008 and Belgian electricity supplier
SPE this year. Not to be outdone, Italy’s
largest utility, the number two ranked
Enel, bought a 25% share in Spain’s En-
desa (ranked number 5) earlier this year.
Only two US electric utilities made the
top ten ranks of the Top 250; Exelon of
top 250 global energy companies
3-year
CGR
Platts
Rank
Rank Company Country Industry
1 Abu Dhabi National Energy Co United Arab Emirates DU 84.974 167
2 Iberdrola Renewables SA Spain IPP 53.876 173
3 Rosneft Oil Company Russian Federation IOG 42.254 7
4 Acciona SA Spain EU 37.682 96
5 Gazprom Oao Russian Federation IOG 36.502 8
6 Scottish & Southern Energy United Kingdom EU 35.830 127
7 Gazprom Neft Russian Federation IOG 31.257 24
8 BG Group plc United Kingdom IOG 30.826 17
9 Hera SpA Italy DU 29.012 247
10 Iberdrola SA Spain EU 28.996 36
5. Fastest growing EMEA companies.
Source: S&P Capital IQ Compustat/Platts
The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was
available then it is a two year CGR.
November 2009 insight 59
top 250 global energy companies
Illinois, a nuclear and fossil fuel utility,
and FPL of Florida, which is investing in
large-scale solar plants.
In the top 20 for all energy companies,
there were only three utilities–RWE (a
multi-utility) and electric utilities EDF and
ENEL. The Europeans were well represent-
ed in the top 50, while for the US, only Vir-
ginia’s Dominion Resources was ranked,
at 50th down 3 places from 2008.
Gas utilities climbed the ladder, ow-
ing in part to high natural gas prices
in first-half 2008. Gas Natural of Spain
came in 16 places higher than in 2008
at number 54, with Belgium’s Distrigas a
distant 112th (up from 149th in 2008).
Consumer complaints have been rife
and gas prices have since toppled, which
may damage their returns this year even
if winter arrives hard and early.
Independent Power Producer AES of
Virginia won the top spot among IPPs,
coming in at number 72 in the overall
rankings, with India’s NTPC second at
number 73. A contraction in power de-
mand this year is expected to damage
revenues. Among multi-utilities, Ger-
many’s RWE ranked first (Platts rank
number 14). France’s GDF Suez, a new-
comer to the list after the merger of GDF
and Suez in 2008, came in second, and
at number 27 in the overall rankings.
2009 newcomers to Platts Top 250
were heavily weighted toward utilities,
which comprised 14 of the more than
30 newly-ranked companies. Of the 14,
seven were electric utilities and the rest
scattered between gas, multi and inde-
pendent utilities. The industry contin-
ues to attract new investment, despite
the challenges it faces with “greening
up” its generation and carbon cap and
trade policies. Other newcomers fell
primarily in the E&P space, with high
prices attracting new investment there
and in storage & transportation. ■
3-year
CGR
Platts
Rank
Company
1 ONEOK Partners LP 124.912 129
2 NuStar Energy LP 94.176 227
3 Abu Dhabi National Energy Co 84.974 167
4 Ultrapar Participacoes SA 81.937 202
5 China Resources Power Holdings 65.300 243
6 Addax Petroleum Corp 57.587 126
7 Iberdrola Renewables SA 53.876 173
8 Southwestern Energy Co 50.631 166
9 Reliance Infrastructure Ltd 45.796 239
10 Suncor Energy Inc 43.262 48
11 Enterprise GP Holdings LP 42.503 142
12 Rosneft Oil Company 42.254 7
13 Penn West Energy Trust 41.308 118
14 Fortis Inc 39.751 246
15 Acciona SA 37.682 96
16 Gazprom Oao 36.502 8
17 NRG Energy Inc 36.485 95
18 Scottish & Southern Energy 35.830 127
19 Chesapeake Energy Corp 35.588 111
20 Encore Acquisition Co 35.408 198
21 Denbury Resources Inc 34.671 204
22 Range Resources Corp 34.191 225
23 Husky Energy Inc 34.091 35
24 Murphy Oil Corp 32.938 44
25 Gazprom Neft 31.257 24
3-year
CGR
Platts
Rank
Company
26 BG Group plc 30.826 17
27 Endesa 30.425 130
28 Encana Corp 30.314 16
29 PT Bumi Resources Tbk 30.127 146
30 XTO Energy Inc 29.829 69
31 Ecopetrol SA 29.764 30
32 Woodside Petroleum Ltd 29.679 85
33 Cameco Corp 29.627 200
34 PTT Plc 29.108 46
35 Hera SpA 29.012 247
36 Iberdrola SA 28.996 36
37 Canadian Oil Sands Trust 28.455 110
38 Korea Gas Corp 27.940 158
39 Formosa Petrochemical 27.822 113
40 Enersis SA 27.404 93
41 Anadarko Petroleum Corp 27.280 39
42 Reliance Industries Ltd 27.226 25
43 Yanzhou Coal Mining Co Ltd 27.159 124
44 LUKOIL Oil Company 27.103 12
45 Tupras 27.068 132
46 China Shenhua Energy Co Ltd 27.048 40
47 A2A SpA 27.045 156
48 Datang Power 26.973 217
49 Novatek Oao 26.944 151
50 Integrys Energy Group Inc 26.360 191
6. Top 50 fastest growing companies.
Source: S&P Capital IQ Compustat/Platts
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2009 2009
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Publisher’s Note
Welcome to the third annual 2009 Asia Energy Outlook issue of Platts Insight. In previous years, we have sought to bring you a breakdown of the most pressing energy matters facing the region and this year is no exception. Platts distinguished and global editorial staff are well positioned to provide a unique level of analysis to Insight readers. Indeed, demand for this level of reporting has forced us to continually increase the distribution of the magazine—it now goes to more than 30,000 industry professionals and financiers in Asia, North America, Europe and the entire Pacific Rim region. Perhaps an increase in demand for reliable energy information is reflective of the changes occurring in the industry. As companies deepen their commitment to finding and using cleaner, more sustainable and alternative sources of energy, for example, there is an equally great need to understand how to incorporate these relatively new ideas into the traditional ways that many companies have conducted their business. The 2009 Asia Energy Outlook tackles some of these challenges by looking at the increasingly active oil and coal markets in India, providing an overview of developments in the Chinese oil and renewables markets, examining the active Asian LNG sector, covering the growing West Asian electricity market and exploring global carbon and emissions issues. Also, we are pleased to be able to showcase once again the full Platts Top 250 Global Energy Company Rankings™. Each year, Platts ranks the world’s top energy companies by financial performance, identifies who’s up and who’s down and provides a breakdown of the Top 250 by industry and region while offering commentary on trends and movement within the list. We’ll be publishing additional issues of Insight throughout the year in conjunction with other major events. If you’d like to learn more about our 2009 and 2010 issues, visit our web site at http://platts.com/Magazines/Insight/. Thank you for reading. Patsy Wurster Publisher, Platts Insight

Patsy Wurster

Guest Editor’s Note
“The global crisis is altering the shape of the world’s economy and shifting the global economic center of gravity to the East.” So writes Lawrence Wong, and it is a theme repeated throughout this issue of Insight. Stories from across the energy spectrum show Asia is currently leading the way. A genuinely global gas market is emerging as the Asian LNG business complements European and North American activity. Renewable energy investment is burgeoning in Asian countries such as China, while regional investors such as Abu Dhabi’s Masdar are at the forefront of innovative activity. The carbon market, to date a cozy European business, is going global following elections in Australia, the US and Japan—and negotiators at the upcoming Copenhagen climate talks who fail to acknowledge the new reality will be sadly disappointed. But there are equally important shifts occurring within the Asian energy economy, and these are also reflected in this issue. Within the region, India has developed a new assertiveness, coming out of the shadow of China. If foreign companies won’t invest there, then domestic ones will—a message finding resonance elsewhere. And across the region the need to balance economic, social and environmental goals is also finding resonance. Witness the words of a senior Indian official, speaking about the country’s energy needs in this issue’s coal story: “We also cannot override the environment—we need to implement policy that looks after all aspects including diversity, forestry, elephant trails. Riding roughshod over these is not the way to develop growth.” Martin Daniel Editor, Platts Power in Asia
November 2009 insight 1

Martin Daniel

managing the Asia news operations of Platts’ real-time electronic news service and flagship print publication Platts Oilgram News. providing her analysis and view on oil industry developments and price trends. She is a regular commentator on BBC and CNBC television in Asia. following which he became head of the Supply. She holds a bachelor’s degree in science and post-graduate diplomas in journalism from the YWCA and the Times Re- . where he edits the newsletter Power in Asia. Jones 48 Oil Price History Redefined (Platts Top 250 Global Energy Company Rankings™) Melanie Wold Authors Martin Daniel Vandana Hari David R. He is an active naturalist. Jones Ross McCracken James O’Connell Jonty Rushforth Mayumi Watanabe Frank Watson Melanie Wold Lawrence Wong Martin Daniel read Modern History at Oxford University. He then worked at a UK energy media and consultancy until 2001 when he joined Platts. After research on economic history there. specializing in Asian forest birds. and Its Approaching Sequel Jonty Rushforth 46 A Sustainable Energy Future for Asia Lawrence Wong 28 New Renewable Energy Markets Take Shape Across Asia David R. Transport and Markets Group at IEA Coal Research. India Invests in Itself Vandana Hari 1 Guest Editor’s Note Martin Daniel 5 Stockpiling or Consuming: China’s Current Oil Demand Ross McCracken 37 India: Stalking an Asian Coal Revolution James O’Connell 10 Onwards and Upwards: Middle Eastern Electricity Prospects Martin Daniel 42 Carbon Trading — Asia and the New World Order Frank Watson and Mayumi Watanabe 20 The Great LNG Bear of 2009.Inside 1 Publisher’s Note Patsy Wurster 33 As World Mopes. he joined the Economics Unit of the then British Coal Corporation. 2 insight November 2009 Vandana Hari is Platts News Director for oil and gas industry coverage in Asia.

She has written for industry publications including Financial News.maps.com/forms/SMSInsightSubscribe or send e-mail to :ann_forte@platts. Metals: Karen McBeth Global Director. he moved to Platts. editor of Energy Economist. Prior to her freelance career. Risk Management: Mike Davis Global Director.com Circulation Manager: November 2009 insight 3 .com Get a free subscription at: http://marketing. covering regulatory policy under the EU ETS and Kyoto Protocol. patsy_wurster@platts.000 stories on these markets to date. Melanie Wold is a freelance journalist specializing in US and European investigative news stories covering a wide range of financial markets and technology. She is known for bringing transparency to molybdenum and indium. CME Magazine and Profit & Loss Magazine. plattsreprints@theygsgroup.com CUSTOMER SERVICE Ann Forte 720-548-5479. ann_forte@platts. An environmental journalist with 20 years’ experience. having held the position of Europe Editor on emissions markets since August 2005. electrical and steel industries. and has taught in Poland and China.platt. Jones edited newsletters on US state and local government. Frank Watson.platts. and writing about the energy industry and markets for four. Oil: John Kingston Global Director. He also obtained undergraduate and masters degrees in economics from the University of Wisconsin-Madison and the University of Michigan-Ann Arbor. joined Platts Metals in 2001. Jones is Platts’ global renewable energy editor. producing independent over-the-counter price assessments. Suite 325 Westminster.search Foundation in New Delhi. managing editor of Platts Emissions Daily. New York. oil pollution. international coal managing editor. and began her career with India’s leading English-language daily The Times of India in 1989. He holds a master’s degree in European studies from the London School of Economics and his undergraduate degree is from the University of East Anglia. and also as the principal private secretary to the Prime Minister. Mr. and solid waste before joining Platts in 2001 to cover coal and energy policy. specializing in energy markets. CO 80021 PLATTS Business office: 2 Penn Plaza. He was previously an editor with an Oxford University-based political and economic consultancy. based in London. David R. Traders Magazine. In 2009 he moved to Singapore and helped launch Platts’ spot Asian LNG assessment. Markets: Jorge Montepeque COVER ART World Energy Capacity and Consumption Map Built in PowerMap: by Erin LeFevre and Claude Frank. leading reporters in Europe and Asia producing news for the global coal. Mayumi Watanabe joined Platts in 2004 having previously worked for the Japanese media groups Yomiuri and Takarajima. 25th Floor. market commentary and analysis. Melanie has also worked for Dow Jones Telerate and Platts. Finance. Power: Larry Foster Global Director. Melanie was the European editor for Dealing with Technology and Inside Market Data.com ADVERTISING SALES MANAGER: Robin Mason 631-642-2600. He holds a BA in English and History and a Higher Diploma in Applied Communications from the National University of Ireland. www. Petrochemicals: David Hanna Global Director. metals used for solar cells. he has held appointments in Trade & Industry. robin_mason@mcgraw-hill. Health. CONFERENCES AND STRATEGIC MEDIA: Steven McCarthy 781-430-2114.com Article reprints and permissions: The YGS Group +1 717-505-9701. He joined the coal team in early 2007. Frank developed Platts’ coverage of the emerging EU Emissions Trading Scheme. Wong has a masters in public administration from the Harvard Kennedy School. Jonty Rushforth has been a journalist for eight years. steven_mccarthy@platts. is a financial journalist and editor with nine years experience of commodities coverage. medical waste management. Ross McCracken. Securities Industry News. James O’Connell. covering European gas and power. UN Clean Development Mechanism and Joint Implementation schemes. She has written over 3.com PLATTS NEWS & PRICING SERVICES VP. Lawrence Wong is chief executive of the Energy Market Authority (EMA) in Singapore. Production Manager: Nelson Sprinkle Associate Editor: Alissa Veuthey-Motazedi Production Office: Insight Magazine 10225 Westmoor Drive. He previously worked for Irish broadcaster RTE. In his career in the civil service. News & Pricing: Dan Tanz Global Director. Melanie holds a bachelor of science degree in business administration from the University of Maine. both Incisive Media publications. the Japan Korea Marker. NY 10121 Fax: 212-904-3232 Larry Neal Kevin Pascale Dixie Barret GLOBAL DIRECTOR. ext 105. He has headed up the global emissions team at Platts since May 2008. and normally works in Tokyo on the metals and steel markets.com President: VP Finance: VP Trading Services: PUBLISHER: Patsy Wurster 720-548-5583. joined Platts in 1999 to run the European and West African crude desk. She co-authored her article while seconded to Platts’ London office to work on the emissions market. in various editorial and marketing roles. After initially editing a magazine about lawyers in Latin America. covering global precious metals trading.

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Platts Energy Economist Based on refinery throughput and crude import data. a process that should act as a medium-term stabilizing factor on the oil market. as outlined in the International Energy Agency’s Medium-Term Oil report.5 million b/d under conditions of lower growth. or 8. consumption appears to be down. Not only is it expected to be the largest single source of demand growth. China is stockpiling not consuming. surveys by the China Petroleum and November 2009 insight 5 . Chinese oil demand appears to be rising. implied oil demand in the January-July period rose 0. compared with the same period in 2008.oil Stockpiling or Consuming: China’s Current Oil Demand Ross McCracken. The IEA estimates that Chinese oil demand could reach 9.7% to 221. It rose by 4. Chinese oil demand is racing ahead. what is clear is that Chinese oil demand growth is a key factor. two different stories are emerging that reflect the Chinese authorities release of statistics and the way in which the media reports them.47 million mt. falling consumption and large rises in inventory levels.21% on the year in July to a record 34. On the same basis. However. According to China’s official Xinhua news agency. Future oil demand growth remains highly uncertain. but its sensitivity to GDP growth is larger than for OECD countries. other data paints a very different picture. However. the word ‘implied’ often falling from the media headline where economy of wordage and impact are all important. The figure actually represents refinery throughput plus net imported oil products. sensitive to the speed and extent of the economic recovery. However. However. Editor. the first increase since the start of 2009. published in June 2009.92 million metric tons (mt). and then interpreted by the media. while new car sales are at record levels—the beginnings perhaps of a new oil supply crunch. This is ‘implied’ oil demand. if implied Chinese oil demand appears to be up. According to data supplied by Customs and the National Bureau of Statistics. oil demand in China is being closely watched. As a result.6 million barrels a day (b/d) in 2014 under a high GDP growth scenario.

oil
Chemical Industry Association (CPCIA) show that consumption of crude oil dropped 2.9% in first-half 2009 to 190 million mt or 7.7 million b/d. The missing link is, of course, stocks. The government releases data on imports, exports, domestic crude production and refinery throughput, but does not release official data on the country’s actual oil consumption figure and oil stockpiles. Using the implied demand data, it can be seen that crude stocks in China— domestic production plus net crude imports less refinery throughput—rose by 8.53 million mt in the year to July. Like the government, the CPCIA does not provide overall stock levels, but it does comment on changes in their levels. According to the association, oil product inventories registered large increases in July. Chinese financial news website Caijing reported that the July oil products stocks of China’s giant refiners Sinopec and PetroChina were up 30% on the year, while July oil products sales were down 6%. The CPCIA reported that through end-June, China’s oil products inventory was 43.5% higher than a year ago. The increase in refinery throughput in the second quarter of 2009 reflects the resumption of operations at several key refineries following maintenance, as well as the start-up of a 240,000 b/d refinery at Huizhou and a 160,000 b/d refinery expansion project in Quanzhou. China’s state oil companies are expected to add nearly 1 million b/d of new refinery capacity by end-2009, and they are still announcing new plans; on September 17 Sinopec said it would invest $3.5 billion to add a further 240,000 b/d of capacity to the Quanzhou refinery as part of a second phase expansion. It is doubtful that, in the short term, a market exists for the additional output either domestically or internationally. Floating storage of oil products globally was reported by the IEA to have risen above 60 million barrels at end-June, while preliminary data for end-August indicated some stabilization at about 60-65 million barrels, down slightly from end-July. Floating storage for crude was put at 50-55 million barrels at end-August down from about 65 million barrels at end-July. The problem of excess oil stocks is reflected in Chinese state company plans to expand their own storage capacity. At the beginning of September, the China National Petroleum Corporation announced that it would expand its oil storage capacity to over 45 million mt in coming years, 15 million mt of which would be for commercial use. Local reports said that 66 new facilities

Oil Product Stockpiles
So while Chinese refiners have been increasing their throughput, hitting all-time highs from May through to July, and reflecting rises in regulated oil product prices, it appears that the extra output is being stockpiled rather than consumed, while crude inventories are also growing.

1. Chinese gasoline consumption and imports/export balance (10,000 mt).
0 -200 -400 -600 -800 -1,000 7,500 6,000 4,500 3,000 1,500 0

Imports[+]/Exports[-] (left) Consumption (right) 1990 2000 2002 2004 2006 2008

1980 Source: National Bureau of Statistics

6 insight November 2009

oil
are planned to come into operation in 2009. CNPC itself opened ten new storage facilities in first-half 2009. The rush to build new storage reflects both the long-term government aim of increasing China’s strategic petroleum reserve, as well as the short-term necessity of finding a parking space for the oil products being produced. According to a draft of the multi-billion-dollar stimulus package for the oil, petrochemical and chemical sectors released earlier this year, China hopes to have the capacity to store an additional three million mt of oil products by end-2009, six million mt by 2010 and 10 million mt by 2011. Far from indicating a recovery in the world economy and heralding the approach of a second oil supply crunch, lackluster domestic Chinese consumption suggests a slower recovery, while increased stock levels and storage capacity can be seen as a medium-term stabilizing factor for the oil market. The relevant question might not be about demand growth, but about what happens when China stops stockpiling. Although it is only one month’s data, preliminary indications for August, released in September by the Chinese General Administration of Customs, appear to confi rm this outlook. Chinese refi nery throughput fell in August from the record high of July, the fi rst month-on-month drop in 2009. Crude imports and oil product imports also fell. The former remains high, 18% up on the same period of 2008 at 18.47 million metric tons (4.38 million b/d), but the latter was down 28.87% on July and 18.86% on the year at 2.71 million metric tons. At the same time, crude and oil product exports jumped 25% and 10.65% respectively on the month.

Transport Key
Chinese oil demand growth is centered on the transportation sector with gasoline and diesel demand on a rising trend and fuel oil usage declining. This trend is likely to continue as fuel oil use for power production is further reduced, and as conventional refinery capacity squeezes out China’s ‘teapots’,

The relevant question might not be about demand growth, but about what happens when China stops stockpiling.
which typically use fuel oil as a feedstock to produce off-specification gasoline and diesel. In line with rising gasoline demand, Chinese domestic car sales have increased markedly in recent months, another statistic used to reinforce the apparent recovery in Chinese oil demand. This reflects heavy government subsidization. Beijing has halved taxes on new cars and offered subsidies to the country’s rural population to buy small vehicles. Even in 2008, shielded from crude’s highs on international markets by regulated domestic prices, the num-

2. Chinese fuel oil consumption and imports/export balance (10,000 mt).
3,000 5,000

2,000

4,000

1,000

3,000

0 Imports[+]/Exports[-] (left) Consumption (right) 1980 Source: National Bureau of Statistics -1,000 1990 2000 2002 2004 2006 2008

2,000

1,000

November 2009 insight 7

oil
ber of cars on China’s roads rose by a quarter over 2007. How China’s transportation system develops will heavily influence the country’s future oil demand. The recovery in new cars sales in 2009 follows a rise in monthly average sales from 360,794 in 2003 to 732,712 in 2007, while they still rose 6.7% in 2008, despite the economic slowdown. Yet per capita car ownership remains a fraction of that in developed countries and there is clearly pent up demand for travel, as shown by rail use statistics. But how will China’s per capita car ownership evolve? While the huge size of the population suggests an enormous market, it may also prove a selflimiting factor as population density is high and urban pollution is already an issue. In addition, the country’s road infrastructure is different to that in Europe or the United States. Moreover, the relationship between per capita car ownership and oil demand growth is uncertain. Strong growth in car ownership in Europe since 1980 does not correlate with the region’s oil demand growth. While again the comparison suffers from being for a developed country versus a developing one, Japanese oil demand has been falling since 1999, but per capita car ownership rose from 404 per thousand people in 1999 to 441 per thousand in 2004. That China’s oil demand will start to rise as growth recovers is certain, reflecting the country’s developmental status. But in the short-term, oil demand growth is arguably being over-stated by a reliance on data based on refinery throughput. In addition, while car ownership has a long way to rise to reach developed country levels, there are internal limitations specific to China that suggest the country will never achieve or perhaps even approach US levels. Nor can demand management initiatives be ruled out by government, whether driven by environmental, security of supply or local pollution imperatives. ■

3. Chinese oil product consumption 2007 (10,000 tons).
Astana RU SSIA

KAZ AKHSTAN Heilongjiang Ulan Bator Bishkek MO N G O L IA KYRG YZ STAN Inner Mongolia Liaoning TAJI KI STAN Xinjiang Gansu PAKI STAN Shanxi Ningxia Qinghai CH IN A Shaanxi Tibet New Delhi Kathmandu N E PAL I N DI A BAN G L A D ESH Dhaka Yunnan BU RMA
VIETNAM

Jilin

Beijing Beijing Tianjin Hebei Shandong

Sea of N O RTH Japan KO REA Pyongyang (East Sea) Seoul SO U TH KO REA

Yellow Sea Henan Jiangsu JAPAN

Anhui Hubei Sichuan Thimphu
BH U TA N

Shanghai East China Sea

Chongqing Jiangxi Hunan Guizhou

Zhejiang

Fujian TA IWA N Pacific Ocean

2,000-4,000 1,000-2,000 500-1,000 0-500

Guangxi

Guangdong Hong Kong Macau South China Sea

Hanoi Bay of Bengal L AO S Vientiane Hainan Philippine Sea PH IL IPPIN ES

Source: National Bureau of Statistics
8 insight November 2009

.

Platts Power in Asia The Middle Eastern electricity sector doesn’t always get the attention it deserves. These lenders are typical of the multilateral and bilateral institutions usually called on to finance pioneering IPP projects in untried markets. Qatar. together with the export credit agencies of the United Kingdom and France. covering Bahrain. The Emergence of Private Power Exceptions to this monolithic picture appeared from the mid 1990s after Oman tendered the region’s first independent power producer (IPP) project. In September. Manah-1 was relatively small at 90 megawatts (MW). the region’s electricity supply industries showed very similar characteristics. the private sector lending arm of the World Bank Group. the Manah-1 project entered operation in 1996. the region offered limited opportunities for outside involvement. the competition to build the region’s first nuclear plant is nearing a conclusion in Abu Dhabi. Kuwait. they operated under complete state control. Meanwhile Oman awarded a consultancy contract covering services for what would be the region’s first large-scale coal-fired power plant. Elsewhere. Just a few examples may suffice to illustrate the point. even though the different national grids were not connected to each other. Oman. Put simply. transmission. Regardless of country. Saudi Arabia and the United Arab Emirates (UAE). But recent developments in the electricity sector of the region in general and of the countries comprising the Gulf Cooperation Council (GCC) in particular underline the fact that the Middle East is not only one of the fastest growing but also most prospective of global electricity markets.electricity Onwards and Upwards: Middle Eastern Electricity Prospects Martin Daniel. They were heavily subsidized because they charged below-cost prices for their output. distribution and supply systems. Editor. and not 10 insight November 2009 entirely without reason. bracketed as it is between the sheer scale of the wider Asian power market and the opportunities afforded by the competitive European market. until now one of the last bastions of state ownership of power generation in the region. Admittedly for decades up to the late 1990s the Middle Eastern power sector was seen as a backwater. they comprised integrated generation. Awarded to a predecessor of France’s GDF Suez Energy International. And the initial phase of the region’s first interconnected grid. Kuwait. the six countries comprising the GCC. . saw at least ten consortia express interest in providing consultancy services for what would be the country’s first privately-owned independent water and power producer (IWPP) project. And much of the $216 million of funding for the project was provided by the International Finance Corporation. and they were relatively small by global standards. they used power plants fired almost exclusively with indigenous oil and gas. entered operation in the third quarter of 2009.

and Shikoku. in this case the Japan Bank for International Cooperation.25 billion of debt in August 2008. this excludes the very large amount of capacity developed on what is effectively an IPP basis but to serve industrial customers rather than the grid. require that domestic companies hold controlling or significant stakes in their IPP and IWPP projects.074 MW of captive generation capacity built by Tihama Power at four sites in Saudi Arabia to serve the energy company Saudi Aramco is typical of this type of investment.electricity But Manah-1 was the precursor of an increasing number of increasingly ambitious projects as the private generation model spread across the region over the next decade or so. with other European companies including the UK-based International Power and France’s Total also being active. such as Abu Dhabi and Saudi Arabia. Indeed from the late 1990s on. Moreover. outside the Middle East in the case of Taqa. Tenaga Nasional Berhad and Tanjong are also active. There is a strong contingent of Asian investors including Japanese trading houses such as Marubeni. with the finance extended by these banks indicating the experience and comfort levels such institutions have achieved in lending to Middle Eastern private power projects over the past decade. IPP and IWPP developers in the GCC countries alone have closed finance on projects with more than 31. The amount of activity is reflected in the list of international investors active in the region. Mitsui and Sumitomo. The substantial Malaysian presence reflects not only the level and maturity of IPP development in their home market but also the investors’ experience of funding largescale power projects using Islamic financial instruments.. bilateral and export credit agencies. Since Manah-1 in 1996. Several of the region’s governments. which closed on $3. the Middle East became a hotspot for private power investment. it has not been accompanied by wider liberalization of the reNovember 2009 insight 11 . Export Development Canada. Chubu.730 MW of electric capacity and has an estimated cost of $3.724 million imperial gallons a day of desalinated water capacity costing almost $42 billion (Table 1). at a time when power markets in many parts of the world were closed or unattractive to international developers and lenders. but are still represented by investors such as AES. such as the Abu Dhabi National Energy Company (Taqa) and the Gulf Investment Corporation. GDF Suez Energy International may be the largest single investor but it is far from the only one. which will have 2. The 1. But some of the regional-based IPP players are also active beyond their home market and. Private Power Limitations While private generation has become entrenched in the Middle East and especially the GCC. this time in consortium with Japan’s Mitsui & Co. The project was awarded in March 2008 to the Ras Girtas Power Company. Shikoku Electric and Chubu Electric. explaining their involvement. This is also a factor in the presence of investors from within the region’s own power and financial sectors. differs from Manah-1 in that it got much of its funding from a syndicate of 21 international and regional commercial banks. Southeast Asian companies including Singapore’s Sembcorp Utilities and Malaysia’s MMC. Ras Laffan-C is being funded in part by multilateral. Take for example the Ras Laffan-C IWPP project in Qatar. indeed. Companies from the US have become less prominent since developers such as CMS and PSEG withdrew in the mid 2000s to concentrate on their home market. the projects have grown markedly in size and cost. Mitsubishi. which again includes GDF Suez Energy International. Involving both IPPs and off-grid captive generators serving energy-intensive industrial consumers. But the project. Italy’s SACE and the Islamic Development Bank. and Japanese electric power companies such as Tokyo.330 MW of electric and 1. as well as two local energy companies. In common with Manah-1.8 billion.

.electricity gion’s electricity supply industries. The reversion to state investment originated with the rapidly increasing cost of engineering. somewhat below the 10. The region is very much at base camp in terms of the ascent to a fully liberalized and competitive power market. while Oman is positing a 10% annual increase to 2014 and Saudi Arabia a similar 10% increase to 2017. and is projected to grow at a similar level over the next decade or so at least. And even if it did occur. The latter industry is a good example. This has led to burgeoning growth in electricity use to operate air-conditioners and other domestic appliances. but it is usually where the plant is to be expanded or replaced with more capacity. industrial and thus overall electricity demand is likely to continue growing strongly. not of the power offtaker. Kuwait sees average growth of up to 9% a year to 2015. This has led to large-scale investment in electricity-intensive projects such as petrochemical plants. Electricity use has increased at a near double-digit level since the second half of the 1990s. And aluminum smelters are proliferating in the GCC and wider region. the sale of a plant’s output using anything other than the single buyer model backed by state guarantees is not feasible. For instance Bahrain is projecting average growth of 8% a year to 2020. But present indications are that this is unlikely to occur. leading to fears of power shortages a few years down the line. The high past and projected growth rate is partly due to the very low prices paid for electricity by many of the region’s residential consumers. distribution and supply systems remain state-owned and in all cases fully regulated. the retail electricity prices charged throughout the region still rarely cover the cost of supply and are again fully regulated. steelworks and aluminum smelters. the problem was exacerbated from 2008 by the increasing cost and much tighter availability of limited recourse finance as a result of the global economic crisis. especially in those countries with access to petrodollars. The upshot was that many planned private generation projects in the region have suffered significant delays in implementation since 2007.8% annual increase anticipated by Qatar to the same year. Moreover since 2008 there has been some reversion to the state financing and ownership of power generating plants at one time planned as IPP or IWPP projects. Meanwhile with very few exceptions the region’s electricity transmission. as well as by the limited pool of eligible contractors. And critically. not least since electricity can account for about 40% of smelting costs. This means that the success of IPP and IWPP projects in securing international investors and lenders depends basically on the bankability of the host government. the privatization of existing generating plants has occurred in places such as Abu Dhabi. 12 insight November 2009 Projected Demand Growth The potential for power shortages reflects the robust pace of growth in electricity consumption in the GCC countries and the wider Middle Eastern region. Some governments have thus reverted for the moment to the quicker and in cases cheaper model of state financing to expedite the fasttrack construction of plants. while the UAE has projected 9% annual growth to the same year. The introduction of higher prices would slow or even reverse the rate of growth in household electricity consumption if governments were to reduce subsidies and require residential power users to pay economic tariffs. And outside the captive generation sector. Caused by the spiraling price of equipment and other inputs at a time of strong demand. procurement and construction contracts from the mid 2000s. This is because Middle Eastern governments are acutely aware that their hydrocarbon resources can yield added value if the oil and gas is not exported as a raw material but used either directly or as electricity in the local processing and manufacture of goods. But the retreat from private and foreign participation to direct state investment in countries such as Saudi Arabia is less ideological than pragmatic. True.

Also developed in stages was the Dubai Aluminium Company’s integrated complex near Jebel Ali in Dubai. it may now draw power from a 2.6 million mt/year aluminum refinery and a 720. Malaysia’s MMC Corporation and China’s Chalco.000 MW by 2032. the Sohar Aluminum Company in Oman has recently commissioned a 1.000 mt/year smelter and a 1. Saudi Arabia is also home to an integrated project comprising a 1. For instance. and the high projected growth in GCC and wider regional electricity demand is largely explained. which had 3.350-MW gas-fired power project and 585. And ahead of both these 2010 projects. To host a 4. 7 6 5 4 percentage 3 2 1 0 -1 -2 -3 Central/ Europe/ South America Eurasia Source: BP Statistical Review of World Energy 2009 North America Africa Asia Pacific Middle East World November 2009 insight 13 . the first stage of the project will include a 2.000 mt/year smelter being developed at Ras Al Zour by the local Ma’aden.electricity Some of the smelters have been around for decades. Saudi Arabia has projected that the 169. Meanwhile Qatar.000-MW project in tandem with a 350. Developed through the project company Emirates Aluminum. All of these operating and constructing projects could be dwarfed by the integrated smelter and power project being developed in stages at Jazan Economic City in Saudi Arabia by a consortium including the local Saudi Binladin Group.000 mt/year smelter.750-MW power plant.3 TWh of power it consumed in 2006 will rise to 572 TWh in 2032.400-MW state-run project being developed in the area.000 metric tons (mt) a year smelter is powered by a 2.000 mt/year smelter at Mesaieed in Qatar. The same year is due to see the commissioning of Qatalum’s 1. Primary energy consumption by region.260 MW of new plant from 2011 to 2036 on top of the additional capacity built between 2006 and 2010. which by 2006 comprised an 860.155 MW in 2020. In the somewhat nearer term.000 mt/year smelter and 2. Also part-owned by Dubai Aluminium in the UAE is a 700.860MW power project once fully built. the state-controlled Saudi Electricity Company has projected that peak demand will rise from 41.242 MW in 2008 is projected to rise to 140. not to mention the large and oftenincreasing amount of power needed to produce the region’s oil and gas. Originally planned to include a 1.660 MW of operational capacity in 2006.000-MW power project at Taweelah in Abu Dhabi. 2008 compared with 2007. Aluminium Bahrain’s 830.150-MW gas-fired power complex near Sitra which was built in four stages from the 1970s. In Bahrain. the complex is scheduled for operation from 2010.600MW oil-fired captive plant. Add in the electricity needs of petrochemical and other industrial projects. And the UAE projects 1.460-MW power plant scheduled for operation from 2012.043 MW in 2009 to 75. is projecting that it will need 16. while installed capacity of 39.

The projections of those countries whose forecasts extend less far into the future are also indicative of the scale of the needs.000 MW of generating equipment as the first stage of government plans to quadruple installed capacity by 2015. Iraq. for use as feedstock in the petrochemical and other industrial sectors. Baseload power was produced from crude oil or heavy fuel oil burnt in large steam turbine plants. with $59 billion of the total being for generating plants.5 TWh as early as 2014. Oman. or 56%. renewable and alternative energy sources to help meet the region’s future power needs. Kuwait. is projecting that the demand of 13. For example. And the growth bonanza is not limited to the GCC countries. nuclear.electricity that the 16. It is required for export as liquefied natural gas (LNG) or through pipelines. .000 MW. Gas use for power generation has thus come into question. gas used in combined-cycle and other plants has taken over from oil in many areas. anticipates strong growth in future demand on top of the fact that the 6. 14 insight November 2009 Coal to the Rescue? The Middle East has sparse coal resources. Over the past decade. for example. The International Energy Agency (IEA) in its World Energy Outlook 2008 projected in its reference scenario that $158 billion of investment would be required by the Middle East power generation and wires sector from 2007 to 2015. This would include $135 billion for generating plants and $217 billion for transmission and distribution systems. for instance. Meanwhile neighboring Iran is planning to add a large amount of capacity to satisfy unmet existing demand. In this regard the South Korean construction company Doosan Heavy Industries recently said that “the Iranian power generation market is embracing a flurry of projects to construct new combined-cycle power plants due to the deterioration of existing power plants. which links Qatar with Oman and the UAE. Middle Eastern electricity was traditionally generated almost entirely from oil. 380 TWh. or from the LNG imports proposed in. while diesel and other lighter oil products provided the feedstock for peaking plants and smaller. According to the IEA. of the region’s 681 TWh of power needs in 2006 were generated from gas. That was followed in the 1990s by a switch to the use of natural gas in more efficient plants as oil prices increased and resources depleted. The IEA went on to project that from 2016 to 2030 the regional electricity sector would need a further $352 billion of investment. But the question mark over gas has also spawned interest in the use of coal. there is increasing competition for the region’s gas.” Apart from a considerable amount of capital. meet future requirements and replace aging generators. for example. and for reinjection to enhance oil recovery. However.9 TWh recorded in 2006 will almost double to 27. the Saudi Arabian authorities require that new power plants in some parts of the country are fired with heavy crude or heavy fuel oil to conserve gas reserves. In early 2009 the country thus signed agreements to purchase more than 10. Needed: Capital and Fuel The new capacity and the associated expansion of the region’s transmission and distribution networks projected by the region’s governments and power utilities will require a very considerable amount of capital. the new capacity needed to meet the projected growth in demand will need a considerable amount of fuel.858 MW by 2020. This has led to a reversion to oil use in a few areas. There is limited production and consumption of indigenous coal. This is especially true in countries with limited indigenous resources and where alternative supplies are not available from regional pipelines such as Dolphin Energy’s system.760 MW of capacity installed in 2006 will rise to 40. with 240 TWh coming from oil and the remaining 8% coming from coal and hydroelectric plants.000 MW of capacity available in mid 2009 is well below existing demand of more than 10. isolated grid systems.

200MW coal-fired IPP project at Duqm for operation from 2015. In the first instance this is planned to have 600 MW from 2011.000 MW of capacity. The project would operate under a 20-year concession with the cost being estimated at $2 billion. Meanwhile in neighboring Abu Dhabi a clean coal technology-based power plant costing $1 billion was being studied by Taqa in 2007. Based on these studies the consortium sought to undertake an integrated mining and power project on the basis of direct negotiation with the power authorities. In Dubai a 2.000-MW to 1. Middle East Coal. 6 5 4 percentage 3 2 1 0 -1 -2 North America Central/ South America Europe/ Eurasia Africa Asia Pacific Middle East World Source: BP Statistical Review of World Energy 2009 November 2009 insight 15 . respectively in September 2009. The state-run Oman Power and Water Procurement Corporation is thus planning to tender a 1. Oman is one such country. Technical and financial advisory contracts on the project were awarded to WorleyParsons and KPMG. but it could eventually host up to 4. For instance a 1. But as gas prices rose from the mid 2000s a number of Middle Eastern countries examined the option of importing coal. The Abu Dhabi Future Energy Company (Masdar) is responsible for promoting renewable and new energy projects.000-MW coal-fired IPP project at Ajman is being developed by Malaysia’s MMC Utilities under an agreement signed in July 2008. 2008 compared with 2007.000-MW gasified coalfired combined-cycle plant was under consideration in 2008 when the stateowned Dubai Electricity & Water Authority signed a memorandum of understanding relating to the project with a consortium of local and Chinese companies. But in April 2008 the government decided to award the country’s first coal-fired project through an open competitive tender. Through a special purpose vehicle. respectively. Electricity consumption by world region. In the mid 2000s a consortium comprising the local Oman Oil Corporation with South Korea’s LG Energy and Korea Southern Power commissioned studies by consultants John T Boyd and PB Power on coal mining and power projects. the state-run RAK Investment Authority bought equity in an Indonesian coal mining project in early 2009 to provide fuel for the Mina Saqr project. Renewable and Nuclear Prospects Abu Dhabi’s interest in clean coal technology reflects its wider focus on renewable and alternative energy projects. another of the northern emirates.electricity with Turkish and Iranian use of locally mined coal for power generation being exceptions. A separate coal-fired plant is planned at Ras al Khaimah. especially in the UAE. Several other jurisdictions have examined the coal option. with one of its first projects being a 10-MW solar photovoltaic plant at 2.

and has since hogged most of the headlines. The capacity would be installed in 500-MW complexes. A fi nal investment decision is currently targeted for the third quarter of 2010 with initial operation envisaged from 2013. nuclear power is in the frame as a long-term solution for the electricity requirements of many Middle Eastern countries. Apart from renewable energy. In 2008 the UAE forecast that it would require 40. The GCC project could be followed by the gradual interconnection of electricity systems in the wider region and beyond. Iran’s highly-contentious nuclear program started much earlier than most. But meeting the region’s power needs will still need a substantial .858 MW of capacity by 2020. Beyond the solar business.260 MW of the new capacity it projected as needed from 2011 to 2036. Meanwhile in Oman a 2008 study sponsored by the Authority for Electricity Regulation and undertaken by consultants Cowi and Partners proposed the establishment of large-scale solar thermal plants and up to 750 MW of wind turbine capacity in the south of the country. In April 2009 three consortia were prequalified for the foreign equity stake including France’s GdF Suez Energy International. Developed through a joint venture with Germany’s Conergy. the project was commissioned in 2009. As a first step the GCC Grid Interconnection Authority is connecting the grids of the six GCC countries through a three-stage project due to be completed in 2010. The project will incorporate CO2 capture and storage in producing oil fields. The tender for a 200-MW solar thermal project was under consideration in 2009. own and operate basis in 2008 with four bids being received. Japan’s Hitachi with the US’s GE Energy. which comprises the UK’s BP Alternative Energy and Rio Tinto. was tendered on a build. The $41-billion project contract was said to be near award at the time of writing (early October). But meeting the projected demand will still require the construction of a large amount of additional generating plant. For instance in Qatar the state-run Qatar General Electricity and Water Corporation said in 2008 that solar plants should account for 4. Masdar is also promoting at least 500 MW of concentrated solar capacity through 100-MW projects.500 MW of the 16. But the high-priced bids led Masdar to look at relocating the plant and tendering it again. Sourcing Kit The Middle East’s burgeoning electricity demand will be met not only by building more generating plants within each country but also by trading electricity between countries to take advantage of differing national load patterns. The $1. Areva and Total. Several other countries in the region have ambitious plans for renewable and especially solar energy. with 30% projected to be nuclear plants. a parabolic trough-based project at Madinat Zayad known as Shams-1. with construction of the first four reactors then scheduled to begin by 2012 and operation planned from 2017. and South Korea’s Korea Electric Power with Hyundai Engineering & Construction. This is expected to include a substantial amount of renewable and nuclear capacity as well as some coal and oilfired plant. but it is far from the only regional country with nuclear aspirations. Trading Power.000 MW of potential electricity flows regulated by a power exchange and trading agreement signed in July 2009 by all six countries apart from Oman. 16 insight November 2009 The UAE in general and Abu Dhabi in particular have travelled well down the road to nuclear generation. Sites on the coast between Abu Dhabi and Ruwais and in Fujairah were investigated from 2008. Abu Dhabi is planning to develop nuclear capacity on the basis of joint local and foreign ownership in line with its IWPP model. The 25year concession for the fi rst scheme. a joint venture with Hydrogen Energy. Masdar is developing a 390-MW hydrogen-fueled power project through Hydrogen Power Abu Dhabi.electricity Masdar City.25-billion project involves 5.

A second phase of the program running to 2013 would involve the introduction of wholesale competition and a spot market. it also reflects stringent qualification criteria which have in turn resulted in a limited pool of eligible equipment and contractors. There is little question that this will be one of the key issues facing the Middle Eastern power and wider regional energy sector for decades to come. European. which would be unlikely to be politically popular. This would see the state-controlled Saudi Electricity become a holding company from 2010 with its power plants being unbundled into four generating companies and its transmission assets being transferred to the proposed Saudi Grid Company. While the high cost per kilowatt of regional generating projects partly reflects indigenous factors such as high labor and other input costs. Most notably. But perhaps the biggest question mark over the future shape and direction of the Middle Eastern power sector is whether that private involvement will remain limited to IPP and IWPP projects operating under the single buyer model. a move to merchant generation and contestable consumers might seem improbable any time soon. as already noted. But the Middle East appears likely to remain a high cost region. or whether the region goes further down the liberalization route and embraces competitive electricity generation and supply. The efficiency issue is also important because power plant equipment and construction costs have tended to be significantly higher in the Middle East than elsewhere. Chinese. while the grid company might either seek a strategic partner or tender out projects on a build and lease basis. The likelihood is thus that there will be some shift in the sourcing of power plant equipment with a possible reduction in unit costs. the privatization and liberalization of the Saudi Arabian power market is planned. probability continue to be sourced from both state coffers and from private investors and lenders. In some recent tenders there appears to have been greater acceptance of non-traditional sources of equipment and services. Some Middle Eastern countries have in fact already prepared detailed roadmaps for the transition to a more competitive market. the main Chinese and Indian equipment suppliers and contractors. In this context. The country’s state-run Electricity and Cogeneration Regulatory Authority (ECRA) said in 2008 that a three-phase program was under consideration. to have any real meaning a move to competitive electricity supply would require a shift to cost-reflective retail tariffs. the fueling of this capacity could have a significant impact on the availability and price of gas for other uses. Middle Eastern power plants have traditionally been “goldplated” facilities built and equipped by leading US. Russian and other suppliers of oftencheaper equipment and construction services have made limited inroads. but from the mid 2000s the substantial number of projects chasing a limited number of contractors made for even more expensive plants. In particular.electricity amount of additional gas-fired plant. increasing the efficiency of gasfired generating plant—getting more kilowatt-hours per Btu—is an important concern for the region’s power utilities. Japanese and South Korean companies. retail tariff hikes are not out of the question. And. And wholesale competition between generators would not necessarily impact on retail prices and thus may prove easier to adopt. ECRA envisaged that at least three of the generating companies would be privatized. for instance. It would also involve the corporatization and possibly sale of November 2009 insight 17 The Inevitability of Competition? The substantial amount of investment required by the regional power sector means that capital will in all . Not only do these tend to be more expensive per se. This has been assisted by the improving quality and performance of. Indian. But given the cost of subsidizing power use. Given the generally conservative nature of Middle Eastern economic activity.

Sumitomo QEWC Taqa. And as the Middle Eastern power market becomes more interconnected. cc = combined cycle.200 3. GDF AES Taqa.900 900 800 2. o = oil. IP.730 1.870 3.250 623 2. Total. Acwa GDF. st = steam turbine.electricity Saudi Electricity’s distribution and supply assets in the ECRA blueprint. Marubeni IP QEWC Dhofar Power Taqa. GIC IP.000 1. Financed IPP and IWPP projects in GCC countries by year of operation. GDF = GDF Suez Energy International. Source: Platts. TNB. Sumitomo AES. Acwa Taqa. oc = open cycle.750 2. Chubu Mitsubishi. Marubeni GDF. Acwa Note: IPP = independent power producer. IP = International Power. GDF.500 756 585 950 910 597 2. according to ECRA. g = natural gas. GIC Taqa. Taqa = Abu Dhabi National Energy Corp. The third phase from 2013 to 2016 would involve the full introduction of wholesale competition and the start of retail competition. Chubu GDF. it seems likely that the pressure to introduce competition into the wholesale market will grow as a way of securing cost and efficiency gains.116 2.234 1. IWPP = independent water and power producer. QEWC = Qatar Electricity & Water Co. ■ Table 1. Mubadala Malakoff. GIC = Gulf Investment Corp.200 migd 50 84 20 100 40 33 90 29 94 157 60 26 195 100 47 210 130 96 100 63 Op 1996 2000 2001 2002 2002 2003 2003 2003 2004 2004 2007 2007 2007 2007 2007 2008 2008 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2013 $m 216 104 541 133 213 270 1.973 1.000 1. Country Oman Oman UAE Oman Qatar Oman UAE Oman UAE Qatar Oman Bahrain Bahrain Qatar UAE UAE Qatar Oman Saudi UAE Qatar Saudi Saudi UAE Bahrain UAE Qatar Saudi Project Manah-1 Manah-2 Taweelah-A2 Kamil Ras Abu F-1 Salalah Taweelah-A1 Barka-1 Shuweihat-1 Ras Laffan-A Sohar Ezzel Hidd Ras Abu F-2 Umm al Nar Taweelah-B Ras Laffan-B Barka-2 Shoaiba-3 Qidfa Mesaieed Shuqaiq Jubail Fujairah-2 Al Dur Shuweihat-2 Ras Laffan-C Rabigh Type and fuel IPP (oc-g) IPP (oc-g) IWPP (cc-g) IPP (oc-g) IPP (oc-g) IPP-AE (oc-g) IWPP-AE (cc-g) IWPP (cc-g) IWPP (cc-g) IWPP (cc-g) IWPP (cc-g) IPP (cc-g) IWPP-AE (cc-g) IPP (cc-g) IWPP-AE (cc-g) IWPP-AE (cc-g) IWPP (cc-g) IWPP-AE (cc-g) IWPP (st-o) IWPP-AE (cc-g) IPP (cc-g) IWPP (st-o) IWPP (cc-g) IWPP (cc-g) IWPP (cc-g) IWPP (cc-g) IWPP (cc-g) IPP (st-o) mw 90 180 720 285 377 242 1.450 1.800 2.500 2.100 3. Chubu Kepco. one thing is clear—going forward the Middle Eastern electricity sector will require close attention both from power industry players and the wider energy community.443 2.400 1. Mitsui. AE = acquire and expand.020 2.025 678 917 880 2. IP. IP. Tepco. Acwa Taqa.460 1. Mitsui Taqa. GIC.473 455 1. Sembcorp Marubeni.700 Key investors MENA Infrastructure MENA Infrastructure Taqa. and fueling and technology issues become increasingly pressing.360 2. While the timetable attached to the Saudi Arabian liberalization program may prove ambitious. QEWC GDF GDF. based on national and company data 18 insight November 2009 .800 2. Marubeni GDF. Marubeni.360 427 1. Tanjong QEWC.636 700 620 500 1. GDF. Regardless of the various question marks. GIC. IP. the radical nature of the program in one of the region’s more conservative jurisdictions is indicative of the wider potential for change.

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in Asia Pacific it also responds to local fundamentals.liquefied natural gas The Great LNG Bear of 2009. Platts LNG Market observers had expected 2009 to be a bearish year for liquefied natural gas (LNG). dipping below NBP hub prices in the UK.00/MMBtu in September 2008 to below $4. the observers have been proven right. “In fact global liquefaction is lower this year so far than it was at the same time last year. and it looks like it will fi nish.” Keith Barnett. But while the market had expected a supply-driven fall in prices.00/MMBtu in 2009. and Its Approaching Sequel Jonty Rushforth. Senior Asia LNG Editor. then only a little above last year or flat. By summer 2009. in the end much of that supply did not appear. if not lower. A loss of Japanese nuclear output in 2007 had raised gas demand for power generation. and spot buyers paid upwards of $20. Spot prices for LNG followed suit.00/MMBtu in September 2009. while new consumers and robust economic growth among traditional buyers kept demand buoyant across the region into late 2008. said in Source: Getty Images 20 insight November 2009 . director of global commodities strategy analysis at Merrill Lynch. while the front month at the UK’s National Balancing Point (NBP) has seen an even more dramatic fall.00/MMBtu in May. from above $14. while a wave of new gas liquefaction capacity was due to come onstream worldwide. spot LNG prices had fallen considerably. In some ways. an assessment of prices for spot cargoes delivered in the forward month to Japan or Korea. Increased unconventional gas production in the US had already knocked back imports in 2008. fell to under $4.00/MMBtu in July 2008 to trade below $3. Platts’ Japan Korea Marker (JKM). While LNG is a price taker in the Atlantic basin. US Henry Hub front month prices have fallen back from above $8. at least insofar as prices have come down.00/MMBtu.

but demand has also been hit there … On the whole. or 4. when Anglo-Dutch major Shell reported a 6% year-on-year drop in LNG production worldwide for its second quarter results. it said. He points to “significant problems” at plants in Nigeria. production cuts in Algeria. Liquefaction trains are not easily turned down.175 metric tons (mt). Excluding Nigeria.7% in May. and pay overtime. Shell saw both sides of the supply situation. Korea. The company said that “new production volumes from 1. but also saw LNG output from Nigeria plummet due to upstream problems. a drop of 1. says. and “lesser problems with Asian production. analysts say there is tolerance for perhaps a 5% reduction in output. and to some extent Spain. “Why hurry to bring production online. reaching a peak annual rate of 18.6% year on year. Taiwan.” Total Asian LNG imports were already looking lower year on year in the last quarter of 2008. So the fall in previously anticipated Asian 2-Feb 2-Mar 6-Apr 4-May 1-Jun 6-Jul 3-Aug 7-Sep Source: Platts November 2009 insight 21 . have been slower to come on than expected. in the current pricing environment?” Low production was evident by the summer. as it has equity in new capacity that came onstream in Russia and Australia.” And LNG production units. which does not strip out LNG from the broader gas picture in its quarterly results. Barnett says. The US has suffered from supply side weakness.” So if supply has dropped back. but not much more.liquefied natural gas September. to 8. Algonquin City Gate Fwd Mo SoCal Fwd Mo 10 9 8 7 $/MMBtu 6 5 4 3 2 1 LNG Japan/Korea Marker France PEG Fwd Mo UK NBP Fwd Mo project additions in Qatar. the United States and the North Sea were more than offset by field decline and lower European demand. But from then on the decline began in earnest. “European demand has also suffered from the economic downturn. Shell’s equity production was up 7% year on year in the second quarter.013 million cubic feet per day. what has pulled down prices? “For LNG.77 million mt over the previous year. 2009. Global gas prices. of 452. or trains. it’s primarily been down to a big drop in consumption in Japan. director for global LNG at Cambridge Energy Research Associates (CERA). although in January 2009 they again showed an annual increase. said in July that its average gas production in the second quarter was down 5. Fellow major ExxonMobil.4%.” John Harris. price has been demand-led this year.

flooding the market. But even after cutting out the crossregional imports. which typically allow drops of 5-10% in term supplies. so we’ve seen LNG prices come down. They used contractual “downward quantity tolerance” clauses. summarizes the situation: “Asia Pacific demand has plunged. but spot prices struggled to climb much above $5. facilitated by the commissioning of two major new regasification terminals and the expansion of an existing one. Between April and July 2008. LNG spot markets in the Atlantic Basin are bearish. With no interest locally.005.00/MMBtu. the Asian premium disappeared. followed by a gradual economic recovery in traditional Asian markets. Buyers have reduced imports. 2008-9. Takayuki Nogami. That left regional spot prices at $4. With the LNG heading west. with two new terminals starting up in 2009. and so the few buyers left in Asia reduced their own price expectations as a result. for much of the second quarter of 2009. or showed a discount. due to the recession. Nigeria. China 12 10 8 6 4 2 South Korea Taiwan Japan India mt millions 22 insight November 2009 1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09 Source: Platts . and Equatorial Guinea. with a double-digit drop. That in turn left Asian producers with spare product. Asian spot prices seem to have stabilized at about the level Nogami identifies. most Atlantic cargoes stayed west. Asian buyers still needed to cut back. NBP prices fell back. There’s no reason why people should pay the high prices they paid last year.00/MMBtu DES [delivered ex-ship] in Asian markets. Egypt. the UK in particular saw a rapid rise in imports. senior economist for global oil and gas markets at Japan Oil.” With no premium in Asia Pacific.1 million mt of LNG from Trinidad. and some new LNG supply has come on stream. Algeria. Japan received 2. and prices reflected that switch in focus. “Asian buyers are not paying as much for LNG. they turned to European markets. In the same period a year later it received just 342.liquefied natural gas requirements had to be otherwise accounted for. has seen annual import growth every 2. As spot interest fell back in 2009. and none from the other producers.” That is not to say that all is lost and prices will tumble to all-time lows. A Japanese nuclear outage provided some relief for suppliers. vice president at Purvin & Gertz. Total Asian LNG imports. In fact. Gas and Metals National Corp (JOGMEC). “They want hub prices.” says Chris Holmes.306 mt from Nigeria and Equatorial Guinea. The JKM was flat to the UK’s NBP. however. In 2008 Asian buyers had attracted some spot and short-term cargoes across from the Atlantic basin by paying significant premiums to gas hub prices. China. One reason for that is that the low prices have brought in opportunistic buyers.

04 million mt. namely naphtha in India and fuel oil in China. CERA’s John Harris says that since those buyers have already been brought into the market. Qinhuangdao Coal Minas FOB Indonesia FO 180 FOB Spore Naphtha CFR Japan LNG Japan/Korea Marker 18 16 14 12 $/MMBtu 10 8 6 4 2 24-Mar 7-Apr 21-Apr 5-May 19-May 2-Jun 16-Jun 30-Jun 14-Jul 28-Jul 11-Aug 25-Aug 8-Sep 22-Sep Source: Platts November 2009 insight 23 . Yemen and Qatar. Both of those alternatives have risen steadily since the start of 2009.00/MMBtu. Andrew Pearson. there were also signs of some recovery in demand in the traditional LNG markets. Next year we will see a big increase in LNG trade as these new plants ramp up.00/MMBtu in the summer and naphtha CFR Japan as high as $15. Traders began talking of some spot demand from South Korea as well. in March. For both countries. Indonesia. with fuel oil FOB Singapore at around $10. although it will be next year before this new volume has its full impact on the market. with more trains scheduled to follow in Yemen and Qatar.” He adds that “sellers are going to be inclined to look at alternative fuels and extract that value. in 2010. Oil products vs JKM.liquefied natural gas month this year. head of LNG research at Wood Mackenzie. when much of the rest of the region was seeing severe declines. lower prices would not attract any more demand for LNG in Asia: “Spot buying has been a reflection of low spot prices. and a new project in Peru. pull prices back up in 2010? Merrill Lynch’s Keith Barnett thinks not: “I really don’t see anything that can turn the market around. combined with opportunistic buying from new markets.” Already new trains have started up in 2009 in Russia. If prices were any lower. spot LNG is considerably cheaper compared to alternative fuels.” The problem is that the effect that everyone was waiting to see in 2009 is likely to fi nally come through in 2010 instead. although for only for a few cargoes. And India reached its highest ever monthly import volume. A miraculous recovery in north Asian countries could take some of the pressure off. The “missing gas” is heading inexorably towards the markets. says: “New LNG supply projects have begun to start up. at 1. So could the slight signs of recovery in demand from the traditional markets. but otherwise it’s going to be a grind as it works out. you wouldn’t see any more demand. Of those that 3. Taiwan’s CPC issued a tender in September for three spot cargoes after staying out of the market for several months.” By the third quarter.

we should see much more go to the US. That created a widespread need for gas throughout the summer. which have remained comparatively high relative to spot gas. spot LNG. FO 180 FOB Spore 14 12 10 $/MMBtu 8 6 4 2 LNG Japan/Korea Spot Crg DES S Korea LNG average import price 24-Mar 7-Apr Source: Platts 21-Apr 5-May 19-May 2-Jun 16-Jun 30-Jun 14-Jul 28-Jul 11-Aug 25-Aug 8-Sep 22-Sep 24 insight November 2009 .00-5.” he adds. the US has the largest most liquid storage capacity to take it. the home team will have the advantage.liquefied natural gas have started. “And it also has the shortest investment 4.” with spot LNG “somewhat at the same level as natural gas spot prices in the US and UK. But these may not make much of a difference. in addition to those which started this year. and the traditional markets are already struggling to absorb the excess this year.” says Keith Barnett at Merrill Lynch. And for Europe to take any more gas. while any excess LNG heading to the continent would have to take the relevant hub prices. before the new wave really impacts. such as those in China and India. reflecting weak fundamentals.” The problem is that the new LNG coming in has to go somewhere.00/MMBtu. “At the end of the day. and new floating terminals in Kuwait and South America. adding further supply. The US also has a more diffuse and flexible domestic gas market. too. pipeline suppliers would need to cede market space to LNG producers. Takayuki Nogami at JOGMEC says that with “the new supplies coming on.” He sees spot gas prices in the US and UK in “a low range of $3. “we would have seen much more of it go to the US.” “With the startup of new projects in the months ahead. Purvin & Gertz’ Holmes says the new terminals are “marginal. and that trend could continue in 2010. but could be at full capacity in 2010. There are new terminals.” Some of the excess in 2009 has headed to Europe. But instead. The European suppliers provide gas on contracts linked to oil prices. But Europe began 2009 with low LNG storage levels after Russian pipeline gas flows through Ukraine were cut in the winter. where there is ample spare import capacity. In a contest between the two supply sources. Fuel oil vs term. several commentators think the bulk of any 2010 excess will head to the US. There’s tens of millions of tons coming on.” He adds: “What’s coming on in production far outweighs that. but there’s no guarantee that the same circumstances will occur in 2010. And it is possible that production problems in Algeria and Nigeria could be resolved by 2010. with little obvious incentive. LNG fundamentals will be quite anemic in 2010. some have ramped up production slowly. Harris says that if the supply that had been expected had appeared this year.

But he adds: “I’m not one of those people. but this is still a relatively low number. For these billion-dollar LNG projects. And LNG producers may be willing to accept extremely low prices before they blink. and Australia’s North West Shelf. so prices can be pushed down quite low before there’s any incentive to stop producing.” He points out that as domestic producers pull back. NYMEX futures have already fallen significantly in the last year and more. Unlike unconventional gas production in the US.00/MMBtu. you can’t really turn them around—it’s like a supertanker versus a Smart car. The theory is that that will mean lower production and hence higher prices. you would struggle to send LNG to the US. NBP Winters in $/MMBtu as a percentage of Dated Brent. the projects can keep producing even when they receive little income for the LNG itself. certainly from the Middle East. For projects such as Qatar’s RasGas and Qatargas. which leaves price incentives as the likely motivator.” says Keith Barnett. LNG moves in. Particularly during the summer. dropping steadily from the $13. Because those liquids—condensate and LPG—attract relatively high prices compared with methane. 2008.liquefied natural gas cycles for [exploration and production]. import capacity is unlikely to be fully used. which has declined in 2009 as prices have fallen back.” he says. At the time of writing (early October) front month futures had recovered from the September lows of mid 2s to hit $4. or prices would have to favor the west Atlantic. Winter 10/11 30 25 20 15 10 5 Winter 09/10 1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 1/09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 Source: Platts November 2009 insight 25 . that it will push prices up to $7. A floor of $2. LNG production worldwide is often associated with liquids production. Although US 5. non-associated shale gas. And that means that the price for excess LNG worldwide would be set by Henry Hub values.00/MMBtu. Just how low is “quite low”? “If Henry Hub went below $2.” Chris Holmes at Purvin & Gertz says.” For excess LNG in 2010 to head to the US. and there is more bad news on the upside.00/MMBtu in the last half of 2010. much of which is dry. it is as if LNG production had zero cost. “Essentially shipping is the marginal cost. So LNG sellers can pummel the US producers for a year or two. and then the producers can pick up the pieces after that. either European import capacity would have to be full.577/ MMBtu high recorded on July 3. “Many analysts are putting their hopes on that. Could NYMEX prices recover in the year ahead? One factor that analysts have focused on is the US drilling rate.00/MMBtu may be scant comfort to producers.

That outlook could hold true beyond 2010. likely keeping a lid on prices. and potentially even take a stake in the supply project. until the new wave of supply.” referring to the Japanese Crude Cocktail benchmark.” while CERA’s John Harris says Asian LNG prices will be “between Henry Hub and oil. that shift will affect the market for decades to come. currently coming onstream. Barnett says: “There are as many as 1. And because of the long lifecycle of LNG projects. any increase in their power is likely to mean a significant shift towards flexibility and a weaker oil linkage. is absorbed into the market. There’s a lot more leverage for buyers to dictate whether they buy DES or FOB. “With this. But that disconnect between spot and term LNG pricing may have an impact beyond the current downturn. Pearson points out that the last few years saw very few LNG projects sanctioned.liquefied natural gas gas producers have been pushing production back. Spot LNG prices in Asia Pacific might be somewhat above that if there were localized demand.” prices would rise to $10.00/MMBtu. While spot LNG prices have bounced along a bottom in 2009. Andrew Pearson at Wood Mackenzie says that for the Pacific basin “our view is that the market should stay soft for the next few years.000 wells that have not been completed.008. producers selling LNG on long-term contracts have had the benefit of oil indexation.” With buyers facing yet another year of paying close to oil prices for longterm supplies of LNG while spot prices reflect weak fundamentals. include caps or floors. term LNG prices would be $7.00/ MMBtu. barring a severe winter storm. and any unmet Atlantic demand fed by the uncompleted US wells. JOGMEC’s Takayuki Nogami says there is a “low probability of prices at $7. There are already reports that one recent contract has been signed with an “s-curve shape” to protect the buyers at oil prices not too much more than the current price. They’re drilled and cased. whereas this year and next “look more encouraging. ■ . Whereas this year saw a collapse in demand pushing prices lower. analysts say the trend of late has been to drill wells in preparation for any market turnaround.” The 2010 price picture therefore looks like a reproduction of 2009. probably around 14-15% of JCC. while a string of LNG projects in Papua New Guinea and several coal seam gas-based projects in Australia are heading towards fi nal investment decisions in the next year or so. But it will be “the projects at the back end of the supply curve which will be put under pressure as the competition is intense and there is insufficient market for all the volume. So hub prices are likely to remain in the $2.” There is a postscript to that picture.” he says. everything is up for grabs.” Any US price rise would likely be met by a rapid production response. however. “This is evidence that the pendulum is swinging back towards the buyers after many years of a suppliers’ market.00-8.00-4. But if they maintain “their current momentum. and could be started up in as little as three months. but not perforated and fractured. Pearson says that the first wave of this new supply will still attract “close to oil parity pricing. Any uptick in demand in Asia Pacific is likely to be easily met by the increase in LNG supplies.” Australia’s giant Gorgon project has already been sanctioned in 2009. but few analysts see potential for spot LNG to climb back to even early 2009 levels.” says Pearson. 26 insight November 2009 LNG projects tend to sell most output under term contracts. but with different drivers. Nogami says that if crude prices fell back to $40-50/barrel. and certainly not as much as those US producers who take Henry Hub pricing. the following year will see supply pressuring prices. with buyers bidding against a weak Henry Hub price.00/MMBtu range we have seen this year.00/MMBtu. so the low price environment will not be hitting LNG producers as much as might be expected.

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15 GW. bringing national capacity to 12. Other organizations also are projecting continued growth in China’s renewables sector. having gained several points in the E&Y rankings in 2009. Solar power. however. “This represents a marked move by the Chinese authorities to support domestic PV generation. and the nation’s leaders have affirmed their commitment to expanding renewables production. The country currently is tied for second place in Ernst & Young’s Renewable Energy Country Indices. is also thriving in China. Barriers to development remain. a leading indicator of renewables investment climates. with 2020 targets for solar power rising to 9 GW. has higher expectations of wind power. expects China to soon overtake the United States as the world leader in wind power capacity. Editor. which currently relies on exports for the vast majority of its revenues. while solar power capacity will increase to 1 GW by 2010 and 20 GW by 2020.” according to the E&Y index. is considering a draft amendment “in a bid to remove the power transmission bottleneck that hinders industrial development. The potential for renewables expansion is certainly abundant. It forecasts that the nation’s wind power generation capacity will increase to 35 GW by 2010 and to 150 GW by 2020. the National People’s Congress. Altogether. The Global Wind Energy Council.” the official People’s Daily Online site reported. Jones. with Premier Wen Jiabao saying in 2009 that the government should establish a broad strategy to foster the wind power industry. for instance. China has set the target of securing 15% of its energy capacity from renewable resources by 2020. Platts Renewable Energy Report The rush to develop renewable energy in Asia that gathered steam in 2009 seems set to continue in 2010. solar and nuclear power capacity will provide more than 16% of the country’s elec28 insight November 2009 tricity by the end of the next decade. the larger of China’s two electric transmission and distribution companies. Support of PV within the sector will also strengthen the Chinese solar cell supply chain. China is by far the region’s largest renewable energy producer. China in 2008 doubled its wind energy capacity for the fourth straight year. The country’s legislature. which is 75 times the current solar capacity of about 120 MW. the SGCC said.renewables New Renewable Energy Markets Take Shape Across Asia David R. “The draft requires . The State Grid Corporation of China (SGCC). China’s wind. including 100 gigawatts (GW) of wind power. including solar thermal and solar photovoltaic (PV) generation. with China spearheading the drive while other Asian countries stake their claims in the market.

which should be based on the overall national energy strategy and available technologies. Still. India comes a distant second to China among Asian renewables markets. and calls for the creation of a government fund to support research and development on renewable energy-related technologies and a smartgrid system. as magnets for renewables investment ◆ Growing interest in wind power and biomass in southeast Asia ◆ November 2009 insight 29 . Solar power could be the country’s next boom market. and using vacant lands at power plants.” In some areas of China. and the government is looking to vastly expand its renewable energy generation as part of the solution to acute nationwide power shortages. “Where necessary for purposes of system balance or ensuring cost-effectiveness and reliability. which would cut losses from long-distance electricity transmission. and the council is looking at still more ambitious goals to further increase solar power use in the coming decades.” according to the plan. it would also promote the integration of other renewable energy technologies. village-level generation. and re-emergence of Japan. for example biomass and wind. with solar energy options.renewables related ministries to map out concrete plans for meeting the country’s medium-term and long-term renewable energy targets. The People’s Daily Online. Key trends in Asia for 2010 Continued acceleration of renewables in China ◆ Growth of wind and solar power in India ◆ Emergence of Australia. and notes that most parts of India experience clear. under a policy endorsed by a top government committee. it boasts abundant clean energy resources. The 20-GW solar target goes far beyond the 1-GW goal for 2017 proposed earlier under the mission. Solar energy can provide both utility-scale power production and decentralized. infrastructure is lacking to incorporate new renewable electricity generation. Currently. India currently has nearly 15 GW of gridconnected renewable energy plants and another 322 MW of off-grid and distributed generation systems. the country has just 5 MW of off-grid and grid-connected solar photovoltaic power. The Prime Minister’s Council for Climate Change has approved the 20-GW target for solar power generation over the next 11 years. The National Action Plan’s solar mission calls for the tapping of solar thermal power and solar PV to take advantage of India’s plentiful sunshine. Adoption of the 2020 solar energy target follows the creation of the National Solar Mission by the council in 2008 as one of eight missions in India’s National Action Plan on Climate Change. citing reports from the China Wind Energy Association. said that “more than 20% of the country’s wind power machines did not generate any electricity last year because the equipment was not yet connected to the grid. 6-7 GW by 2017 and 20 GW by 2020.5 GW by 2012.” The draft law would also establish a nationwide annual purchase quota for renewable energy sources to protect the interests of renewable energy enterprises. It is expected to initially focus on deploying solar rooftop and onsite solar PV arrays on government and public sector enterprise buildings.” The Prime Minister’s Council currently is drafting a detailed plan which has the target of generating 1-1. The strategy also called for research and development investment to increase the efficiency of solar cells and “improvements in PV module technology with higher packing density and suitability for solar roofs. India would produce 20 GW of solar energy by 2020 as part of the country’s strategy to tackle climate change. sunny weather 250-300 days a year.

06 MWeq 5 MWp 0.03 lakh – – – – – – 41.” Among the region’s other leading economies. Wind power development in India has been fostered by strong state government support measures.50. 30 insight November 2009 . which are required to surrender a certain number of RECs each year.461 GW 1. the country’s Clean Energy Council estimates.(non-bagasse) Biomass Gasifier Waste-to.27 lakh 4. Australia currently generates about 8% of its electricity from renewables. will provide renewables generators with an additional revenue stream. 2009 Sources / Systems Power From Renewables Grid-connected renewable power Biomass Power (Agro residues) Wind Power Small Hydro Power (up to 25 MW) Cogeneration-bagasse Waste to Energy Solar Power Sub Total (in MW) Off-grid/Distributed Renewable Power (including Captive/CHP plants) Biomass Power / Cogen.000.02 MWeq 34.500 GWh.000 nos. generators of power from such renewable sources as wind. rising to 45. nos. and remaining at 45.30.914 GW 773.155 GW 59 MW Achievements during 2009-10 (up to July 31) Cumulative Achievements Note: MWeq. Australia has long been the region’s slacker in renewables promotion. Indian Wind Energy Outlook 2009. Cumulative achievements as of July 31. 284 nos. hydroelectricity and geothermal will receive one Renewable Energy Certificate (REC) for each MWh of power they produce. – – – 6. 6.renewables Additionally. = number of units. a new analysis co-authored by the Global Wind Energy Council found that the country has at least 48. The country’s renewable energy industry is set for a huge boost after Parliament passed legislation in 2009 setting a 20% renewable energy target for 2020. As under Australia’s previous renewables legislation. kWp = kilowatt peak. 5 MW 1. 2. India new and renewable energy. The study. India could reach 100 GW of wind power. 0.500 GWh from 9. But “at the moment there is no coherent national renewable energy policy to drive the development of wind energy.” the study said. The new law is expected to generate up to A$28 billion ($24 billion) of investment in renewable energy supply and create 28.89 MW 322.464 GW 2. but that is about to change.56 MW Villages/Hamlets 175. sq. such as feed-in tariffs and renewable portfolio standards.148 nos. 1 lakh = 100.57 lakh 1347 nos. Australia and Japan are preparing to make major pushes in 2010 to develop renewable energy. m.75 MWeq 15. with the 2010 target increasing to 12. 7.56 MWeq 435. with domestic producer Suzlon joined in recent years by foreign companies. = square meter. solar. The penalty for regulated energy companies that fail to surren- Table 1.3 MW 10.90 Mln.Energy Solar PV Power Plants and Street Lights Aero-Generators/Hybrid Systems Sub Total Total (Grid and Off-grid) Remote Village Electrification Decentralized Energy Systems Family Type Biogas Plants Home Lighting System Solar Lantern SPV Pumps Solar Water Heating – Collector Area Solar Cookers Wind Pumps Other Programs Energy Parks Akshay Urja Shops Source: India Ministry of New and Renewable Energy – – 511 nos.5 GW of wind energy potential—and that through repowering old wind turbines with new ones and making more land available for wind farms.850 GWh in 2020.m. noted that the nation ranks fifth worldwide in installed wind capacity and has a strong wind-turbine manufacturing base.000 nos. 7.000 GWh from 2021 to 2030.000 jobs. The new targets will come into force from next year.78 MW 107. = Megawatt equivalent. written by GWEC and the Indian Wind Turbine Manufacturer Association. sq.56 MWeq. Selling RECs to regulated companies such as power retailers. “This is urgently needed to realize the country’s full potential and reap the benefits for both the environment and the economy.75 GW 4297 villages + 1156 hamlets 70 MW 222 MW 31 MW 106 MW – 2 MW 429 MW 14.236.

Few countries in the region can tap significant oil or natural gas supplies. and promote the development and diffusion of ‘smart’ electricity grid technologies.” he said in an interview. there are signs that countries throughout the region are starting to deploy renewables based on their domestic resources. superconductivity and biomass generation. Origin Energy.” Origin Executive General Manager. Australia’s biggest green energy producer. intends to “fast-track the introduction of a fixed-price purchase system that requires power companies to purchase the entire output of renewable energy generation (not just surplus power). Australian pension funds manager Industry Funds Management. tying with Turkey and behind countries like Poland and Belgium. Carl McCamish said. Yet just as Australia emerged as a potentially lucrative renewables market with new legislation in 2009. for instance. Indonesia and Australia rank as major coal producers. renewable energy development is gathering speed as countries seek to ensure security of energy supplies and tackle climate change. The DPJ’s election manifesto highlights a range of specific initiatives the party will pursue to promote renewable energy production. the global clamor for action on climate change is starting to trump the unfettered use of fossil fuels. The party. and renewable energy stands poised to reap the benefits in Asia as elsewhere. once a global pace-setter in renewable energy technology. All told. “There is biomass and bioenergy in the tropical parts of Asia. It has vowed to promote research and development and commercialization of such technologies as fuel cells. the party’s platform calls for making Japan the world leader in environmental technologies. has started the process of selling a noncontrolling interest in renewable energy producer Pacific Hydro as it seeks to raise funds to accelerate development of Pacific Hydro’s pipeline of wind and hydropower projects. foster development of clean-energy technologies and slash greenhouse gas emissions. Across Asia. given the large investment required to meet the goal. the [renewables] scheme will be an important factor in whether companies invest in the infrastructure required to deliver carbon emissions reductions in Australia. “With the passage of the renewable energy target in Australia there’s an investment opportunity of circa 12 GW of electricity between now and 2020. The DPJ also will introduce legislation to subsidize purchases of solar panels for residential homes and other buildings as well as so-called green vehicles and energy-saving appliances. for example. Even where fossil-fuel resources are available. has slipped in recent years.” Japan. and only China.” the company said. Some companies are acting quickly to cash in on the Australian market. concerns about climate change continue to mount as more extreme weather events batter nations like Indonesia and the Philippines. The Democratic Party of Japan’s landslide victory in the country’s August 2009 elections could mark a new beginning for Japanese renewable-energy and carbon-emissions policies.renewables der the required number of RECs rises to A$65/MWh. It said passage of Australia’s new renewables target is one of the drivers for the timing of the sale. “Along with the carbon pollution reduction scheme and the right support for investment in electricity transmission. ■ November 2009 insight 31 . there is wind energy in the Philippines and Thailand. Beyond Asia’s major economies. Policy and Sustainability. Further.” The goal will be to boost the ratio of renewable energy in Japan’s total primary energy supply to about 10% by 2020. up from the current A$40/MWh. welcomed the new legislation. “It’s probably unlikely that any single entity could meet that investment challenge. Japan could be ready to re-assert its market leadership role in 2010. They are interesting markets in their own right. but certainly Pacific Hydro is keen to participate in that opportunity to the full extent possible. India. according to E&Y partner Ben Warren. It now ranks 21st in the E&Y renewables country index.

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India Invests in Itself Vandana Hari. Platts.000 aspiring owners were selected by ballot to be the first recipients of the Nano. a resident of Mumbai.4% increase from August 2008. private refi ning and petrochemicals giant Reliance Industries Limited (RIL) decided to place its bets on the domestic market by asking the government to end the “export-oriented unit” status of its 660. a 21. Overall refined products demand to the end of August was 3. This is also where India’s path diverged from that of its formidable Asian competitor China. a Rajasthan onshore field begins pumping crude. nearly a year before it was due to expire. Early in the year. a $1 billion petrochemical project ties up funding. no doubt helped by cheaper car loans and government stimulus packages. sold 47.2% higher than a year ago.32 million mt.000 car got a thumbs-up from its owner. according to latest oil ministry data. The company’s new 580. in contrast. but more importantly.7% higher year on year in the first eight months of 2009 at 36. Asia News Director. The company’s exports. received the keys to the first Nano from none other than Ratan Tata.000 b/d Jamnagar refi nery in mid-April. Ashok Raghunath Vichare.126 vehicles in the domestic market in August.” which means it is required to export all its products in reNovember 2009 insight 33 .000 b/d refinery at Jamnagar is sited in a “special economic zone. Tata. Those not on that list can expect to wait through 2011 to take delivery of their automobile. While Beijing went on a major shopping spree for energy assets around the world. Some 100. consumption of gasoil. India’s gasoline demand over JanuaryAugust was 13. slumped nearly 78% on year. Losing EOU status made RIL liable to pay import taxes and other levies on crude bought overseas for processing at the plant. the $2. A month later. the chairman of the Tata group. While the developed world tightened its purse strings and almost ground to a halt in 2009.7% higher than the corresponding period of 2008 at a cumulative 8.India As World Mopes.54 million mt. 2009 was the year India gave itself the world’s cheapest car. India’s petroleum sector came out to play—ignoring the recession and preparing for the years ahead.000 barrels a day (b/d) state-ofthe-art refinery is brought on stream. a giant deepwater gas field starts production and is quickly on its way to hitting targeted output. But importantly. Singapore A 580. who said he had done up to 100 kilometers per hour on the highway and squeezed out 24 km from a liter of gasoline. India invested in itself. was 7.5 million metric tons (mt) per year. also enabled it to sell refined product in the domestic market without attracting import duties. an LNG import terminal nearly doubles capacity and term LNG imports jump 50% to 7. India’s largest automobile manufacturer. on July 17. an important indicator of industrial and agricultural activity.

Limited. which is expected to go into commercial production in 2010. which is set to debottleneck its West Bengal facility through the end of 2009 to raise its naphtha cracking capacity to 675. (IOC).000 b/d from 120. largely due to gas substitution. and announced plans to grow the number to 1.000 b/d greenfield refinery at Bina in Madhya Pradesh state in partnership with Oman Oil Company. The largest among them. Essar Oil also embraced the domestic market in a bigger way. Indian refiners maintained average overall capacity utilization rates well above 100% in 2009.000 mt/year from 520.000 b/d by December.56 billion to expand Vadinar’s capacity to 320.000 mt/year. which is nearly complete and set for commissioning through the first half of 2010.38% to 9. they are increasingly in a quandary over the growing surplus of naphtha. India’s only other private refiner. The company.99 million mt. India’s naphtha consumption in the first eight months of 2009 at roughly 8. with an ethylene capacity of 860. BPCL expanded its Kochi refinery capacity in Kerala state to 190. Downstream petrochemical projects in the pipeline would start absorbing some of the country’s surplus naphtha. which account for 40% and 9% of the country’s total products consumption respectively. January-August exports slumped 27. tying up the bulk of its output in term sales with the three state-owned marketers Indian Oil Corp. For instance Brahmaputra Cracker and Polymer Limited’s grassroots gas and naphtha-based petrochemical project in Assam state achieved financial clo- . are also in an expansionary phase. Bharat Petroleum Corp. which exited domestic retail marketing in 2007 as rising crude prices and domestic fuel subsidies snuffed out margins. The cracker.98 million mt. Limited. the end of the current financial year. With Indian products demand continuing to grow modestly while export markets remained in the doldrums.000 b/d in August. It has also set up a 120. Essar Oil is spending $1. in sharp contrast to most of their peers in Asia.000 b/d from 240. Among the few immediate expansions on the anvil are Haldia Petrochemicals. Essar Oil. took down its 210. IOC is setting up a petrochemicals complex based on a naphtha-fed steam cracker as part of its Panipat refinery expansion project in Haryana state. South Korea and Taiwan. The other projects are further out. IOC.500 by March 2010. is expected to use naphtha feedstock from the Panipat refinery as well as IOC’s Mathura refinery in the nearby Uttar Pradesh state and Koyali refinery in Gujarat. Though Indian refiners are riding on the back of a strong demand growth in gasoil and gasoline.000 b/d.276 of its retail stations by mid-2009.36 million mt was 7. but only after two to three years.000 mt/year.000 b/d from 150.8% lower than the corresponding period a year ago. State-owned refiners. compared with 30% a year ago. Exports of the light distillate have become tougher in the face of dramatic declines in consumption by petrochemical producers in countries such as Japan.3% on year to 17.000 b/d Vadinar refinery in April to raise its capacity to 280. and Hindustan Petroleum Corp. refi ned product exports from the country shrank. but so did imports— a reflection of more barrels from the 34 insight November 2009 export-oriented refiners fi nding home in the domestic market. is scheduled to increase its Haldia refinery capacity in West Bengal to 150. Product imports in the same eight months dropped 30. which dominate the refining and marketing sector in India. had reopened all 1. Though the Vadinar refinery continued to export some of its output.000 b/d by December or January 2010 and its Panipat refinery in the northern state of Haryana to 300.India turn for fiscal incentives from the central government.000 b/d by December 2010 and has said it sees a “ready domestic market” to absorb all the incremental production. Exports accounted for only 12% of Vadinar’s product sales in the AprilJune quarter.

and has offered the 1. Another landmark upstream development was the start of oil production from Cairn India’s Rajasthan block— the first onshore oil discovery in the country in two decades. natural gas is bound to take a more gradual and meandering path to liberalization. These require feedstock at discounted prices because of the cap on their own selling prices. and is expected to use up 160.000 b/d in the first half of 2011. completed an expansion of its 6. Output from the block is tipped to reach a peak of 2. Starting November 2009. Petronet LNG Limited. the last round of upstream bidding in 2008. A third LNG import terminal.5 million mt/ year Dahej import and regasification terminal on the country’s west coast in March to a new maximum capacity of 11.5 million mt/year.000 mt/year of naphtha when it goes on stream in April 2012.5 million mt/year capacity it will have available initially on a tolling basis.75 million mt/year.8 Bcf/d by the end of 2009 or in early 2010. nearly doubling national gas production. The international bidding round closed October 12 with bids coming in for only 36 blocks and the international majors India has been trying hard to woo largely continuing to stay away. These included the global credit crunch and international oil companies expressing interest in development projects rather than exploration blocks. had attracted bids for 45 of the 57 blocks on offer. The only setback clouding a year of successes was a flopped upstream bidding round. ■ November 2009 insight 35 . The purchase represented a 44% leap from both the previous month and August 2008. India’s ability to manage international perceptions through the transition phase will be key in its ambition to bring larger areas of its sedimentary basins under exploration. Even with substantial new D6 gas volumes flowing to the power and fertilizer producers—the priority sectors identified by the government to receive the initial volumes—India’s LNG imports hit an all-time high of 1. did not hide their disappointment and rallied their own reasons for the failure. Though crude production in India is sold at international market prices. Operator RIL began pumping gas from D6 in April and had crossed the 1 Bcf/ day mark within three months. The company began pumping sweet. the company was preparing to ship in 7. up from the current 5 million mt/year. In contrast. The price of D6 gas was set following approval by a senior ministerial group in September 2007 with the same group picking the buyers for the first 1. Output from the first three fields to be developed in the block is expected to peak at 175. or about 8. and Shell’s Hazira terminal on the west coast. The bids totaled 181. with the startup of the deepwater D6 block in the Krishna Godavari Basin off the country’s east coast. thanks to the fertilizer and power sectors. the Directorate General of Hydrocarbons. India’s gas supply dynamics changed even more dramatically than the refining scenario this year. Top officials in the oil ministry and the upstream regulator.India sure in October. boosting the country’s current and largely stagnant production of about 34 million mt/year by nearly 25%. is preparing for commissioning in the coming months. New Delhi offered a record 70 exploration blocks under the eighth round of its New Exploration Licensing Policy launched in April. India’s maiden and largest LNG importer. at Dabhol on the west coast. India also imports spot LNG through Dahej. But the single biggest factor casting a shadow on the bidding round was in all likelihood the ongoing legal battle between RIL and Reliance Natural Resources Limited over D6 gas supplies and lack of clarity on the government’s role in setting gas prices and deciding the country’s gas utilization policy.4 Bcf/ day of D6 production. compared with just 76 this year.168 million mt in August.5 million mt/year of term LNG from Qatar’s RasGas. waxy crude from the Mangala field in the RJ-ON-90/1 block on August 29. NELP VII.

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Nair noted that these figures are based on the projection that 80% of capacity additions in the power sector will involve coal-fired plants. Managing Editor. using Krishnapatnam port. while the only blot on the landscape was if fuel supplies could be guaranteed while keeping costs under control. Sudhir Nair. 2014 India will be the world’s second largest importer of coal. over 250 billion metric tons (mt). leading to the import projection. Of this. the head of energy and infrastructure at CRISIL Research. outof-date procurement systems and overly ambitious plans. India’s tiger has finally begun to present its claws and make its presence felt. Meanwhile eastern ports would account for some 86 million mt. Coal will fuel 54 GW out of the 66 GW of total capacity CRISIL believes will be developed by March 2014. Booming industries such as steel powered double-digit growth. India is not trouble free. has projected that by 2013- . imports are soaring in tandem with demand. Long in the shadow of China’s dragon. with a higher concentration of coking coal at 38%. The Mumbai-based specialist suggested that. and will require 117 million mt of thermal and 52 million mt of coking coal imports. especially in the power generation field. but it is of average quality and usually requires blending with imported coal to generate power. Platts International Coal Report 2009 saw India emerge as a major player in the international coal markets. accounting for 116 million mt in 2013-2014. Nair forecast that this will result in 254 million mt of incremental coal demand by 2013-2014. He went on to project that western ports would take the lion’s share of coal traffic. No longer tied exclusively to the apron strings of the traditional supply routes from Indonesia and Australia. Essar Power importing through Salaya port. No longer hiding behind the skirts of state-owned monopolies. and both Tata Power and Adani Power importing Indonesian coal through Mundra port for their large-scale power projects. behind only Japan. private enterprises will be the main importers with the majority of imports coming from Indonesia. While much of the rest of the world suffered economic stagnation or decline from 2008. As with any emerging power. He also assumed that the state-controlled local producer Coal India Ltd will meet its production target of 588 million mt for that year. 83% would consist of thermal coal and 17% coking coal. Nair pointed to tie-ups such as Reliance Power’s Indonesian acquisitions. it is voraciously eyeing new markets. India struggled to comprehend what the fuss was all about. which will see a growing dependence on imported coal in the decades ahead. There’s a change a-coming and old players such as Europe had better watch out.coal India: Stalking an Asian Coal Revolution James O’Connell. It is weighed down with infrastructural constraints. These figures include some November 2009 insight 37 Major Opportunity for Private Players India has massive reserves of coal. rather than being government led.

“The coal supply to Indian power stations is some of the worst in the world.” he said. meaning thermal coal imports are about 25 million mt/year. at up to 45%. a 35-year veteran of India’s power sector. Indian domestic mines currently produce about 480 million mt/ year. Shahi. There are obstacles to the process. Shahi added that “the private and state sectors have been advised to acquire coal mines abroad. Imported coal 1% Domestic coal 55% Hydro 25% Oil 1% Natural gas 10% Nuclear 3% Renewable 5% Source: Government of India 38 insight November 2009 . Ashtaranga 12. That process will help India but we must not be complacent with that. adding that the capacity additions would require coal-related investment at minor ports of Rupee 169 billion ($3.8 billion. even with the best intentions regarding the harnessing of renewable energy resources. He said that minor ports in Orissa (Dhamra 15 million mt capacity.5 million mt and Kirtania 10 million mt) and Gujarat (Mundra 12 million mt and Pipavav 10 million mt) are likely to play a central role in the process of adding some 93 million mt of annual coal-handling capacity by March 2014. The coal washing process must be accelerated in the state and private power sectors. said the country could not depend on domestic coal production alone to sustain its massive power generation expansion program—installed capacity is projected to surge to 800 GW by 2032-35.61 billion) and at major ports of Rupee 14.” Shahi said. Nair observed.” said Shahi.coal 33 million mt of domestic production moving internally between ports. chairman of Indian logistics company Infratech.” he stated. These include difficulties over land acquisition 1. India energy breakdown. with Nair pointing out that substantial port developments are required to handle the projected increase in coal imports. This means that they operate on a “crisis management basis. He also mentioned other issues facing India’s domestic coal industry. The message that Indian dependence on and demand for imported coal is set to rise in future decades was repeated by RV Shahi. The coal supply situation facing Indian power stations had become “critical” with an increasing number of Indian power plants having only three to seven days of stocks. Obstacles to such development are the amount of capital required and possible government intervention regarding the minor ports. Analysis by his company showed that. “Dependence on [coal] imports has risen to about 5% of total production and this proportion will increase. Another issue is the high ash content of Indian domestic coal. which makes it unsuitable for power generation without washing. Meanwhile major ports are expected to add 35 million mt to their existing capacity by 2013-14 to keep pace with import expectations. coalfired plants would still account for 48% to 60% of India’s electricity generation by 2032.

And more is available. most industry players would be surprised if prompt Indian demand would support a Richards Bay FOB market that could come under further pressure from increased selling in the latter part of 2009 and early 2010. South Africa shipped 9 million mt to India in the first half of 2009.” Industry players are hopeful of an increase in exports once the two countries finalize a proposed working group on coal which is expected to take shape in early 2010. In early October. With India’s monsoon season at an end. “That means India’s [annualized] share in the exports would be a little over 8%. has indicated that growth of 9. The imported coal is required over a one-year delivery period by Indian coal-fired power stations operated by NTPC. But India’s coal-strapped power utilities can be forgiven for being nervous since Indonesia is expected to export around 185 million mt to a wide range of countries in 2009. The government-controlled NTPC saw its load factor fall at 12 out of its 14 coal-fired plants between March and August. that is a sign to say that there is a lot of coal in the market to be sold. “In the past. demand for South African coal in the country has been mounting but buyers are still wary of overpaying for spot material. some 32% of its total exports of 28 million mt. in some cases by up to 33%.8% could have been achieved if coal supplies had been reliable. In September Indonesia’s Energy and Mineral Resources Minister Purnomo Yusgiantoro said his country had already shipped 13 million mt to India in the year to date and confirmed delivery of an additional 3 million mt by the end of November. But NTPC Ltd. I’ll go to the supplier. The generator’s annual coal consumption is currently about 116 November 2009 insight 39 India Pounces on European Stronghold Softer free on board (FOB) prices and a decline in overall international demand have seen South African production become more attractive to Indian traders.” one industry analyst said.” the Asian trader said. much of it expected to come from In- . donesia.5 million mt first floated in May 2009 by the local MMTC. “Land titles are not so clear. The key export terminal of Richard Bay is no longer exclusively a happy hunting ground for European coal consumers who now face competition. In this respect.coal for coal projects. “The tender is still going on and there hasn’t been any news yet. Indonesia remains a cornerstone of its supply.” said the official. I’ll go to the miner and I’ll make an offer. the tender for 12. India’s Central Electricity Authority has reported that power production grew by 7. “The Indians are happy to wait for prices they want.” a Switzerlandbased trader noted. infrastructure gaps and high production costs. an MMTC official confirmed. India’s largest power generator. At the time of writing [October 20] the tender remained unresolved more than a month after the closing date of September 16. The industry’s problems are illustrated by the travails of the largest imported coal tender launched in India to date.” Given this situation.” he said.5% on year in September. while South Africa offers India a new market. usually. adding: “Obviously. they will never chase the market up and in this respect they are very disciplined. the Indonesians [must] find the other neighboring markets more attractive. leading to development being a risky proposition. South African coal players are already looking east and the country has become a leading exporter to India. an Asian coal trader said he was approached by several South African coal traders interested in selling Richards Bay FOB cargoes in Asia. This would mean offers into the MMTC tender have validity until December 15. adding: “But when one starts getting unsolicited offers from many of the traders or the middlemen or the brokers. But coal shortages are already biting into Indian power generation.. Offers into it are valid for 90 days. India’s total import requirement for 2009 is estimated at 50 million mt.

■ 2.” India may be undergoing a modern industrial revolution. But offering competition for Europe in South Africa and ready to devour as much coal as Indonesia can spare. “We also cannot override the environment—we need to implement policy that looks after all aspects including diversity.” The Indian government’s planning commissioner. Chaturvedi added that the allocated coal blocks could not be developed without due consideration for other factors. particularly local factors. Production 900 800 700 Million metric tons 600 500 400 300 200 100 Import 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Note: Non-coking imports are adjusted for calorific value. Source: CRISIL Research 40 insight November 2009 . with 10% usually sourced from overseas and used for blending with local coal. elephant trails. . yet it is trying to strike a balance between development and traditional values. with delays to the production from domestic mines also a major contributor.” analyst Sujit Mitra said. will be implemented. “All this shows a kind of convoluted economics. while India has seen average economic growth of 9% over the last four years. Riding roughshod over these is not the way to develop growth. has said that imports are not solely responsible for the lack of growth in coal supplies.7% with forecasts for 2009 ranging from 6. Only 25 of the 206 allocated coal blocks are currently in production. What impact had this in [restricting] growth? We estimate this at $100 billion.3-7%. growth in 2008 fell to 6. He noted that “there was a power shortage of 12-13% under the tenth plan [period ending in March 2007]. the Indian tiger is unlikely to turn into a pussy cat any time soon. But in the process it has created a situation when the country is suffering losses. ending March 2012. The planning commissioner said that. he observed. forestry. He suggested that 60 GW to 75 GW is “potentially achievable” but added that the commissioning of part of this capacity will spill over into the next fiveyear planning period.coal million mt/year.” Despite the need for development in the power sector. B K Chaturvedi. Estimated non-coking coal production demand and imports. Chaturvedi also admitted that not all of the 80 GW of generating capacity projected for development in the government’s eleventh five-year plan. adding: “The government is taking time to finalize the deal as it wants to make sure that it gets the best price and saves money.

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the carbon trading business seems certain to grow substantially. Editor. The 2008 United States presidential election saw a marked shift in national climate change politics in favor of some form of carbon trading. and Mayumi Watanabe. Instead. Second.emissions Carbon Trading — Asia and the New World Order Frank Watson. developing countries undertook United Nations Clean Development Mechanism projects to supply carbon credits for trading in Europe. What does this realignment of the global carbon market mean? While much remains uncertain. the stance of the new government is not greatly different from that of the outgoing administration “The leaders of the new ruling party have come from the conservative party. Prime Minister Yukio Hatoyama told the UN on September 26 that Japan plans to cut greenhouse gas emissions by 25% from the 1990 level by 2020. there are three clear implications. unlike the voluntary emissions trading system adopted by its predecessor. Managing Editor. Platts Emissions. There was outlying activity—in Asia. This operated for five years and had very limited impact. for instance. But the carbon policy commitments of the new government are far stronger than before and will be mandatory.” one former aide to an industry minister told Platts. But the carbon trading world was firmly Eurocentric. And looming over all these developments is the certain replacement of the existing order in 2012. While climate change issues may not have been a deciding factor they were important. In overall economic terms. climate change and related carbon issues occupy an increasingly prominent place in the list of political priorities in many countries. though. with activity centered squarely on Europe and European Union requirements. . although replacement by what will only be determined at the December 2009 Copenhagen convention and subsequent meetings. the carbon market will become much less focused on Europe. and there was a voluntary emissions trading program in Japan. so this is essentially Japan having two conservative parties with similar philosophies and making a modest switch. The first point is well illustrated by the Japanese elections in August 2009. with clear differences on the issue in the manifestos and election pledges of the contending parties. Platts Metals Until recently the carbon trading business occupied a clearly defined geographical and political space. This will be based on a carbon emissions cap-and-trade system and the possible introduction of a carbon tax. 42 insight November 2009 And third. Not for much longer. First. which saw the Democratic Party secure a landslide victory. while elections in Australia in 2008 and Japan in 2009 had the same outcome.

344.978 (1%) Argentina . In this context Patrick Birley. the chief executive of the European Climate Exchange.692.519 (6%) China .154.188.496 (1%) Chile .682. Japan is not alone among Asian countries in giving much higher priority to the issue of climate change than before. Chinese President Hu Jintao acknowledged the importance of the issue and said his country would contribute to the resolution of the problem. 1.976.987.” adding that it “is looking at a leadership position. While Hu did not give specific emissions reduction levels or timelines.2.emissions Separately. In the wider Asia-Pacific region.861. Expected average annual CERs by host country (mt CO2e).271 (1%) Mexico .20. But it is another indication of the new seriousness with which Asian governments are looking at the issue.483 (5%) Other .926.4.500 kiloliters per year of petroleum fuel or equivalent must cut their emissions by 2014.067.36. But the government plans to re-submit the bill in November and.592 (1%) Nigeria . The government’s proposed Carbon Pollution Reduction Scheme calls for a 5-15% cut in 2000 GHG emissions by 2020 accompanied by the start of carbon trading in mid-2011. Addressing the UN General Assembly in September.499.4.649 (1%) Malaysia . his public acceptance of the need for Chinese action represents a significant advance on the government’s previous position.918 (60%) Brazil .898.465 (11%) Note: All figures are UN Certified Emission Reductions in metric tons of CO2 equivalent greenhouse gases.419. Australia could become a pacesetter if it launches a cap-and-trade carbon scheme in 2011 as planned.162.244 (7%) S Africa .2. saying that it is planning a 30% cut in its 2005 GHG emissions by 2020.810. Colombia . The reduction must be by 6-8% from the base year that they choose to use.8. Source: UNFCCC November 2009 insight 43 . The South Korean government has been more precise. 2009: 320.582 (1%) India .948.3. the Tokyo metropolitan government plans to launch its own cap-and-trade scheme from April 2010.4.992 (1%) Indonesia .” Seoul’s interest in presenting itself as a leader in the climate change business is unsurprising. It has mandated that businesses consuming more than 1. The initiative hit a stumbling block when the Senate voted against the legislation in August 2009. given that it sees the production and export of new and renewable energy technologies as one of its core future economic activities.20. could call new national elections if the measure is rejected again.678.4. told a Platts climate change conference in September that “the strongest interest for carbon trading systems comes from South Korea.2.14. Total expected annual CERs based on registered projects as of October 14. in an indication of the importance of the issue.550 (3%) S Korea .237 (1%) Qatar .

As Asia and other regions become sources of demand and not just credits. But it also indicates that. What all this indicates is that Australia and other Asia-Pacific countries could take longer to implement their carbon trading plans than originally envisaged—even if Copenhagen produces a clear and unequivocal blueprint for the future of the market. ■ But changes are to be expected in what is. at least in the medium to long term. investment and trading communities. a young market . of course. Most of the emission allowances would be allocated through auctions under the government proposals. with implications across the wider Asian industrial. for instance. be entirely comfortable for existing participants in the market—the new entrants are likely to want changes. although the opposition Liberal-National emissions by 2012. is one of the ten biggest emitters of GHGs in the world. For instance.. the process for defining. where the sale of CERs from CDM projects has become an increasingly important source of project revenues.. and countries such as China and India positioning themselves to become part of the process. and its commitment to start carbon trading will create significant new demand for carbon offsets.000 major industrial producers including coal. after all. Japan. and uncertainties about what the market will look like post-2012. of around $1. Even without its expanded reach. coalition and industrial lobby groups have put forward alternative proposals involving different market mechanisms and less onerous cost burdens. But changes are to be expected in what is. a young market—the EU Emissions Trading Scheme was only launched in 2005. the youthfulness and immaturity of the market mean that it will necessarily continue to evolve. the current Eurocentric carbon trading world is likely to become a thing of the past. These stood at 553 million metric tons in 2008. based on a price of $17/mt. structuring and administering CDM projects may come under scrutiny. and uncertainties about what the market will look like post2012.7 billion. the youthfulness and immaturity of the market mean that it will necessarily continue to evolve. And the emerging global carbon market will offer opportunities as well as threats to what appears likely to be a much-increased band of participants. In the process. This could have repercussions for investors in the power generating and other sectors in Asia. Debate on the issue has centered both on who should pay for the cuts and on whether it is wise to commit to specific emission cuts and timelines before the December 2009 Copenhagen talks. carbon trading could become a much bigger business than at present. The potential can be seen from a Deutsche Bank assessment of what it would cost to make good its Kyoto Protocol commitments on cutting 44 insight November 2009 . Even without its expanded reach. Trading activity to date has been concentrated in Europe. The process may not. The bank said that Japan would have to obtain offsets equivalent to more than 100 million metric tons of carbon at a cost. gas. Most of this requirement for credits has already been sourced through purchase agreements by the Japanese government in the form of UN Certified Emission Reductions from CDM projects and surplus Assigned Amount Units—the sovereign level credits established for industrialized countries under Kyoto. And with the US waiting in the wings.emissions The government has proposed that around 1. after all. where the demand for carbon credits is centered. this seems likely to change. paper and power companies should be encompassed by a scheme intended to cover 75% of the country’s GHG emissions. iron. cement. steel. the carbon market is set to become not only much larger but also more genuinely global.

Inc. Indian Oil Corporation Ltd.C.com . Inc. Inc. SGT LLC Shell Exploration & Production SNC-Lavalin Constructors Inc. retired Larry Weyers. Engineering Project of the Year Entergy Corporation (Automatic Load Transfer) Entergy Corporation (University of Arkansas) Mirant Corporation MyCelx Technologies/Anadarko Petroleum Corporation Shell Exploration & Production YANSAB (Yanbu National Petrochemical Co) ENR Energy Construction Project of the Year Advatech LLC Black & Veatch City Water. Repsol Peter Duprey. FPL Group. Inc.A.Attend The Platts Global Energy Awards Celebration on December 3. NRG Energy. CNOOC Limited EnerNOC. Inc. Recycled Energy Development (RED) Roger Duncan. URS Washington Division (Palo Seco) URS Washington Division (Prairie Creek) Green Energy Initiative of the Year Alpine Energy Group LLC Elementa Group Inc. Lau. Lifetime Achievement Award Jean-Pierre Benqué. S-OIL Corporation Sovcomflot (SCF) Group Energy Efficiency Program of the Year Ameren Illinois Utilities Exel Logistics ComEd. Husky Energy. EDF Energy Commercial Technology of the Year Alter NRG Badger Licensing L. Iberdrola. Peabody Energy PTT Public Company Limited Southern California Edison Toronto Hydro Corporation Power Company of the Year Consolidated Edison. where we formally recognize the winner in each category. EDF International North America Christopher Bloch. Rising Star Award CoaLogix EcoTek Lighting Enzen Global Solutions Private Limited Jamshoro Joint Venture Limited (JJVL) LanzaTech Stream Energy Sustainable Technology Innovation of the Year Abengoa Solar eSolar. Anadarko Petroleum Corporation Lewis Hay. Process Dynamics Inc.A. Lee. 2009 Please join more than 500 industry leaders from around the world at the Cipriani Wall Street in New York City for the annual awards ceremony. Inc (ECS) Entergy Corporation MidAmerican Energy Holdings Company Petrobras S. Inc. Tetra Tech Inc.GlobalEnergyAwards. Ralph Izzo. Wade Adams Group Principal Sponsor Co-Sponsor Celebration Sponsor www.etouches. Public Service Enterprise Group (PSEG) John C. Inc. Reliance Infrastructure Ltd. Boyle Energy Services and Technology Tom Casten. Peabody Energy T-Power NV Valero Energy Corporation Downstream Operations of the Year Jamshoro Joint Venture Limited (JJVL) Mansfield Oil Company Petrobras S. Valero Energy Corporation Deal of the Year Arch Coal. Austin Energy Sheila Hollis.com/gea2009  2009 Platts Global Energy Awards Finalists CEO of the Year Greg Boyce. Milton B. Black & Veatch Corporation California ISO Carbon Capture and Storage Association Chesapeake Energy Corporation Duke Energy Energy Curtailment Specialists. CNOOC Limited James Hackett. An Exelon Company IKEA North America Johnson & Johnson Michaels Stores. InStep Software Lennox Industries Inc. Inc. S. Entergy Corporation Aubrey McClendon. Inc. Public Service Enterprise Group (PSEG) Reliance Infrastructure Ltd. Belwind NV Chesapeake Energy Corporation Enel SpA Gas Natural Mansfield Oil Company MOL Nyrt.S. ACCIONA Energy North America Chengyu Fu. Reliance Industries Ltd. FPL Group.A. Duane Morris LLP Bill Klesse./HDR. Light & Power (CWLP). Chesapeake Energy Corporation Vincent de Rivaz. Inc. MidAmerican Energy Holdings Company Orion Energy Systems Inc. Valero Energy Corporation Hardev Singh Kohli. CPS Energy Wayne Leonard. Entergy Corporation San Diego Gas and Electric Company (SDG&E) Tetra Tech. Republic Services. Register today at: www. Inc. Integrys Energy Group Marketing Campaign of the Year Alliant Energy Indian Oil Corporation Ltd.A. PJM Interconnection Southern California Edison Infrastructure Project of the Year ATP Oil & Gas Corporation BP Australia Bronzeoak Ltd. Exxon Mobil Corporation. Staples Corporation Stream Energy Energy Producer of the Year Anadarko Petroleum Corporation Chesapeake Energy Corporation CNOOC Limited Coal India Limited Peabody Energy Petrobras S. Pacific Gas and Electric Company Reliance Industries Ltd. Tessera Solar/Stirling Energy Systems Total TURBINA IPD Ltd. Naval Facilities Engineering Command PG&E Corporation Public Service Enterprise Group (PSEG) Recurrent Energy (North Face) Recurrent Energy (San Francisco) SolarCity Zorlu Enerji Industry Leadership Award Arch Coal. Peabody Energy Antonio Brufau. Inc.L. CPS Energy Entergy Corporation FPL Group. Lee Raymond. Repsol Shell Global Solutions Space-Time Insight Community Development Program of the Year AES Dominicana Chesapeake Energy Corporation CPS Energy El Paso Corporation Entergy Corporation (Low Income Assistance) Entergy Corporation (University Funding) Northeast Utilities PTT Public Company Limited Qalhat LNG Reliance Industries Ltd. Inc. Inc. Navy CFAY Pepco Energy Services. Inc. Inc. Ice Energy InEnTec LLC Public Service Enterprise Group (PSEG) RSI Silicon Shell Global Solutions Sopogy. FPL Group. Inc.

energy policy A Sustainable Energy Future for Asia Lawrence Wong. Biofuels. countries are grappling with new growth strategies to address the challenges of climate change and energy for a more sustainable future. The emerging economies of Asia are among the world’s largest emitters of greenhouse gases. Chief Executive. Asian economies have been able to achieve high growth rates by increasing their inputs of labor and capital while tapping on cheap supplies of fossil fuels. it has also put tremendous strain on resources and created acute challenges for the environment. economically competitive. Countries in Asia vary in size. Other low-carbon ways to power our future are needed. convenient and reliable? The answer is complex. “Business as usual” is no longer an option. can lead to deforestation. they are unlikely to have sufficient scale to replace fossil fuels for some time to come. However. Nuclear energy comes with the risks of safety hazards. Some are endowed with abundant clean and renewable energy sources while others have no alternatives to fossil fuels. attitudes are shifting and climate change is be46 insight November 2009 coming a major priority on the policy agenda. While the challenges ahead are common to all. and proliferation of fis- . Although this has succeeded in lifting a generation out of poverty. There is no silver bullet and trade-offs are inevitable. when the developed countries are responsible for the bulk of current and historical greenhouse gas emissions. population and stage of development. Renewable energy sources like solar and wind power are part of the solution in a carbon-constrained world. How do we find energy options that are clean. the solutions differ. Asia needs to deal with the challenges of climate change. Beyond resource constraints. Carbon capture and sequestration technologies are still experimental and far too expensive to be deployed on a commercial basis. Risks and tradeoffs have to be managed. Overall. the picture of a dynamic and resilient Asia remains intact and this will continue to drive confidence and optimism over the medium term. While most of the developed West struggled to keep their economies from shrinking in the past year. However. Over the past decades. Across the region. but they are neither costfree nor problem-free. But realistically. Countries have to strike the right balance for themselves and decide how far to go. Energy Market Authority of Singapore The global crisis is altering the shape of the world’s economy and shifting the global economic center of gravity to the East. Asia needs a new model to sustain its growth. they play a critical role in shaping a viable global solution on climate change. environmental degradation and the destruction of carbon sinks. Collectively. China and India were among the few economies in the world that continued to expand. if produced in an unsustainable way. Asian countries are understandably reluctant to constrain their growth and energy usage.

energy security and environment sustainability. it is clear that technology will progress steadily. including an automated condition monitoring system to detect and remedy incipient faults. The Energy Market Authority (EMA) is also actively engaged in a wide range of test-bedding initiatives. Some of Singapore’s experiences may be relevant to others in Asia. Our starting point is to promote competitive markets. In the power generation sector. The government is investing considerable sums to develop clean technologies like solar and biofuels. Nevertheless. At the same time. Asian countries are doing their part in this global research effort. more than 80 percent of Singapore’s electricity is generated from natural gas supplied by Malaysia and Indonesia through pipelines. I am confident that we will be able to develop smarter energy solutions for a more sustainable future. But we recognize that technology is changing. This has improved the competitiveness of electricity prices. The path towards sustainable development requires all countries to achieve the right balance between economic growth. Today. The grid incorporates many smart features. and new alternatives and solutions will emerge. All over the region. for example. and learning how best these can be harnessed to help meet their energy needs. we have invested in a high quality grid to optimize usage. This is why the EMA is organizing the Singapore International Energy Week from November 16th to the 20th. and that energy solutions not viable for Singapore today may become viable in future. Singapore’s grid performance. The event will bring together policy-makers. as measured by the duration and frequency of interruptions. As a small city-state with no natural resources. Beyond LNG.energy policy sile material or nuclear technology. Instead. Through these interactions. industry leaders and subject matter experts to exchange ideas on the broad energy issues of our time. market liberalization has led to the rapid planting of gas-fired combined cycle gas turbines in Singapore. we hope to provide an Asian perspective in shaping the energy debate. is consistently ranked amongst the best in the world. there are practical challenges to fuel diversification due to our limited energy options. For example. by promoting greater use of public transport and setting green standards for buildings. Energy is priced properly and not subsidized. Singapore has more than its fair share of these energy challenges. This ensures the right incentives to avoid over-consumption and to economize on the use of energy. workable solutions. The stakes are high and will become higher unless we get it right early. we need closer collaboration to share experience and expertise. environmental protection and energy security. with increased investments in energy R&D worldwide. and develop pragmatic. we have taken a longterm and holistic approach to strike a balance between our objectives of economic competitiveness. companies and governments are fi nding ways to integrate new technologies into everyday life. reduce transmission losses and enhance reliability. we have pursued pragmatic and cost-effective ways to improve energy efficiency and encourage conservation. In the transmission and distribution of electricity. ■ November 2009 insight 47 . Current projects include a pilot for electric vehicles on Singapore’s roads and an intelligent micro-grid system tapping on clean energy sources on an offshore island. But no single city or country will have all the answers. To diversify our gas supply sources. We have restructured and liberalized our electricity and gas markets. China is hosting the world’s largest solar research facility. and Japan is pioneering fuel cell co-generation systems for residential use. As Asia continues its transformation. Singapore will be importing liquefied natural gas by 2013. Nevertheless. and lowered our carbon intensity. replacing the oil-fired steam plants.

A frantic commodities bubble redefined record oil prices and sent crude oil soaring to over $147 per barrel (/b) in July 2008. 48 insight November 2009 ing from mid-February back up to over $70/b later in the year. to the way in which crude oil is refined. boosted by unprecedented demand from China in the runup to the Olympics. Crude oil futures dipped below $40/b in December 2008 before rebound- Platts Top 250 Global Energy Company Rankings™ measures financial performance by examining each company’s assets. The past two years have been some of the most momentous in the history of the oil markets. a division of The McGraw-Hill Companies). profits. there is a deepening commitment to finding and using clean and sustainable alternative sources of energy. From integrated oil & gas companies (IOGs) to electric utilities (EUs). are increasing their production of clean diesel. This is leading to an increased desire to produce LNG to enable its storage and transportation. which is compiled and maintained by Standard & Poor’s (like Platts. caused by the global recession and a demand vacuum. is impacting the physical infra- . revenue. The oil price spikes were followed by freefall.top 250 global energy companies Oil Price History Redefined Melanie Wold Platts Top 250 Global Energy Company Rankings™ reviewed. as well as IOGs. and return on invested capital. particularly in Europe. such as natural gas. technology for extracting gas from shale and methane beds has advanced substantially. This has impacted many things from intensifying the search for cleaner sources of energy. The boom and bust in prices threw the industry under an unfamiliar media spotlight as the hue and cry from wary consumers grew. The pressure to utilize clean alternative sources of energy in electricity generation. despite continuing recession in the OECD countries. The underlying data come from the Capital IQ Compustat® database. Oil products skyrocketed as well. there has been a shift in tone. which is changing the global balance of energy. All ranked companies have assets greater than (US) $2 billion. Energy companies are grouped according to their Global Industry Classification Standard (GICS®) code. While the structure of the energy industry has not undergone an overnight sea change. IOGs are increasingly focused on finding natural gas. Refining and marketing firms.

top 250 global energy companies structure of electricity grids. E&P companies were China Petroleum & Chemical Corp China The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). which were not designed to deal with intermittent and distributed energy sources.822 27.326 21. EMEA and Russian IOGs took two each of the ten top spots with China and Brazil sharing the limelight with one each.300 45. with PetroChina topping the Asian chart and reaching number nine in the overall top 250.712 22. Fastest growing Asia companies.103 19. IOGs have retained their global dominance. and is planning to use the money raised on doubling its crude oil production. Colombia’s mostly state-owned oil company listed about 10% interest in 1. Latin America is making a better showing in the top 50 this year. Thanks in part to last year’s $100 plus crude oil. with 25 places overall. If only three years of data was available then it is a two year CGR. Asian oil and gas companies took eight of the top 50 places.940 27.226 27.796 30. and took 30 of the top 50 places. profits and return on capital invested for listed companies with over $2 billion in assets. the top 50 rankings for all energy companies were dominated by firms from Europe and the Middle East. the newly-listed Ecopetrol of Colombia.108 27. IOGs carved out the top 13 spots in the 2009 Platts Top 250 Energy Company Rankings™. eight of which were from the United States. Canada’s Encana climbed 19 places to number 16 in the top 250 list. China’s CNOOC leapt 13 places to 21st in the overall table. US. The Americas were second with 17.127 29.005 24. But despite all this and the roller coaster ride that oil prices have taken. Source: S&P Capital IQ Compustat/Platts November 2009 insight 49 . UK. Brazil’s Petrobras made a leap to 6th place (from 12th in 2008).132 20. Platts rankings are based on a combination of assets. popped in at 30th on 2009’s list. Exxon Mobil Corp retained the number one spot for the fifth year running.511 21. revenues.159 27. which wasn’t ranked last year.965 22.973 26.679 29. Rank Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 China Resources Power Holdings Reliance Infrastructure Ltd PT Bumi Resources Tbk Woodside Petroleum Ltd PTT Plc Korea Gas Corp Formosa Petrochemical Reliance Industries Ltd Yanzhou Coal Mining Co Ltd China Shenhua Energy Co Ltd Datang Power PTT Exploration & Production Petrochina Co Ltd S-Oil Corp PowerGrid Corp Of India GS Holdings Corp CNOOC Ltd Hong Kong & China Gas Co Ltd Bharat Petroleum Co Ltd Country Hong Kong India Indonesia Australia Thailand Korea Taiwan India China China China Thailand China Korea India Korea Hong Kong Hong Kong India Industry IPP EU C&CF E&P IOG GU R&M R&M C&CF C&CF IPP E&P IOG R&M EU R&M E&P IOG GU R&M 3-year CGR 65. Otherwise.970 Platts Rank 243 239 146 85 46 158 113 25 124 40 217 102 9 120 244 164 21 23 181 97 its company on the New York Stock Exchange (NYSE) in September 2008. jumping up five places.863 21.048 26. owing to additions to its reserves resulting from its giant pre-salt layer oil finds. Exploration and production (E&P) companies also benefited from outright oil price spikes and good demand earlier in 2008. CNOOC grabbed the number two spot in Asia.

983 22.383 -3.584 33.874 24.819 2.581 29.998 18.560 13.740 1.736 14.132 31. IPP = independent power producer and energy trader.677 23.353 36.197 7.752 4.266 3.444 32.108 14.125 4.806 57.464 27.106 67.188 26.257 27.665 24.539 207.345 12.585 14.915 16.380 21.157 14.280 27.920 107.113 17.996 16.516 1.401 228.781 5.On AG PTT Plc EnBW Suncor Energy Inc CEZ AS Dominion Resources Inc Sweden South Africa Arkansas Germany Thailand Germany Canada Czech Republic Virginia Canadian Natural Resources Canada Notes: C&CF = coal and combustible fuels.329 4.826 7.717 3.645 236.179 132.536 30.090 82.128 18.463 72.997 30.149 222.418 11.361 361.618 174.723 2.143 221.953 29.750 46.325 6.839 6.712 13.319 16.654 14.859 21.120 26.721 12.859 21.626 9.556 28.128 65.187 121.551 7.307 16.523 149.307 2 9.985 15.816 13.502 24.441 120.438 29. DNR = data not reported.418 3.800 38.936 5.156 6.546 32.238 167.655 22.791 26.923 40.035 35.706 6.087 34.118 17.622 18.171 21.223 22.643 25.216 6.871 124.765 6.244 107.752 15.103 21. E&P = exploration and production.859 2.422 19.488 34.326 12.686 30.578 27.141 4.815 24.052 6 425.515 1. 50 insight November 2009 .484 3.825 22.641 13.top 250 global energy companies Platts Rank 2009 Company 1 Exxon Mobil Corp 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Chevron Corp Royal Dutch Shell plc BP plc Total SA Petrobras Rosneft Oil Company Gazprom Oao Petrochina Co Ltd ENI SpA StatoilHydro LUKOIL Oil Company TNK-BP Holdings RWE AG Encana Corp BG Group plc EDF Energy Enel SpA Marathon Oil Corp CNOOC Ltd Repsol YPF SA Gazprom Neft Reliance Industries Ltd GDF Suez Hess Corp Surgutneftegas Oao Ecopetrol SA Imperial Oil Ltd OMV AG Indian Oil Corp Ltd Exelon Corp Husky Energy Inc Iberdrola SA Petro-Canada Endesa SA State or country Texas California United Kingdom United Kingdom France Brazil Region Americas Americas EMEA EMEA EMEA Americas Return on Industry Assets Revenues Profits invested capital 3-year (GICS $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code) 228.351 16.144 6.959 2.461 31.911 18.929 112.350 4.356 188.314 30.847 8.452 17.533 12.414 12. DU = diversified utility.628 27.443 17.082 23.165 19.810 5. R&M = refining and marketing. S&T = storage and transfer.679 2.048 8.207 1.513 232.875 23.589 36.426 20.015 77.892 71.853 4 3 5 8 7 10 2 6 9 13 11 17 26 14 18 20 22 12 32 16 31 24 23 28 27 15 44 21 19 33 50 57 40 34 29 39 36 35 30 45 25 42 55 48 62 81 51 41 52 25.262 12.327 14.179 41.002 IOG 161.190 14.865 13.163 3.263 15.217 32.594 88.134 15.454 42.971 82.165 282.488 8.902 1.528 6.677 18.337 2.938 18.410 29.692 105.384 4.391 5.863 23.342 42.817 24.929 1.626 11.461 7.178 25.075 14.226 17.374 1.896 17. IOG = integrated oil and gas.726 3.848 42.098 5.424 11.817 47.680 45.378 148.071 2 45.658 4.885 2.277 21.367 15.649 11.290 4 1 3 6 14 22 10 8 9 15 13 28 23 59 45 68 17 19 21 80 18 7 43 48 69 16 32 71 90 54 36 29 75 65 38 60 46 96 92 63 116 98 52 11 25 62 55 132 86 23.346 IOG IOG IOG IOG IOG IOG IOG IOG IOG IOG IOG IOG DU IOG E&P IOG EU EU IOG E&P IOG IOG IOG R&M E&P DU IOG IOG IOG IOG IOG R&M EU IOG EU IOG EU E&P C&CF EU E&P IOG IOG EU IOG EU IOG EU DU Russian Federation EMEA Russian Federation EMEA China Italy Norway Asia/Pacific Rim EMEA EMEA Russian Federation EMEA Russian Federation EMEA Germany Canada United Kingdom France Italy Texas Hong Kong Spain EMEA Americas Americas EMEA EMEA EMEA Americas Asia/Pacific Rim EMEA Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim EMEA Americas Americas Americas EMEA Asia/Pacific Rim Americas Americas EMEA Americas EMEA Americas Asia/Pacific Rim EMEA Americas EMEA Americas EMEA Asia/Pacific Rim EMEA Americas EMEA Americas Occidental Petroleum Corp California China Petroleum & Chemical Corp China India France New York Colombia Canada Austria India Illinois Canada Spain Canada Spain Russian Federation EMEA Oil & Natural Gas Corp Ltd India Russian Federation EMEA Anadarko Petroleum Corp Texas China Shenhua Energy Co Ltd China Vattenfall Sasol Ltd Murphy Oil Corp E.407 17.381 25.640 15.192 7.958 458.361 7.537 52.655 9.974 10.437 27.091 28.862 8.053 12 2 5 10 13 21 4 9 11 19 24 65 16 47 33 51 1 8 43 66 27 18 111 56 82 3 77 58 100 131 67 81 37 94 17 79 20 35 50 29 52 124 160 7 86 38 69 90 45 264.261 69.296 283.531 94.474 6.775 30.215 6.661 156.296 7.879 30.254 36.050 21.994 3.877 24.355 43.510 16.931 26.232 11. GU = gas utility.016 41.329 5.828 48.674 7.166 12.004 14.765 58.248 29.012 20.494 1.853 164.198 3.242 26.834 43.604 16. EU = electric utility.265 22.726 13.984 9.220 1 36.740 40.764 4.658 16.094 20.360 5.205 37.260 9 34 29 42 39 20 64 62 56 44 45 5 63 17 50 23 124 125 68 10 100 134 6 52 11 161 53 57 3 1 73 59 77 37 147 58 143 80 75 111 60 15 14 217 110 103 109 33 119 12.703 82.945 91.

405 12.347 71.606 99 138 76 73 42 82 56 26 113 155 144 108 142 129 100 97 101 146 114 112 88 133 30 124 89 111 106 118 153 126 104 127 83 179 154 107 78 27 147 141 196 121 160 156 81 61 148 173 120 3.442 22.772 12.583 18. November 2009 insight 51 .011 17.821 40 16.384 25.399 9.559 9.159 16.679 12.027 10.405 10.740 7.404 12.635 6.409 10.703 EU E&P GU EU R&M EU DU R&M DU E&P EU EU S&T EU EU DU EU E&P S&T EU IPP IPP R&M E&P R&M EU DU S&T E&P DU S&T IOG DU E&P EU DU IOG DU S&T EU E&P EU C&CF IPP EU R&M C&CF S&T EU TonenGeneral Sekiyu Corp Japan MidAmerican Energy Holdings Iowa Russian Federation EMEA American Electric Power Co Inc Ohio Public Service Enterprise Group Inc New Jersey Kinder Morgan Energy Partners LP Texas Nexen Inc Sempra Energy Enbridge Inc YPF Suez Environnement SA Woodside Petroleum Ltd CLP Holdings Consolidated Edison Inc Mol Hungarian Oil Veolia Environnement TransCanada Corp PPL Corp Noble Energy Inc Enersis SA Peabody Energy Corp NRG Energy Inc Acciona SA Bharat Petroleum Co Ltd China Coal Energy Co Spectra Energy Corp Alpiq Holding AG Canada California Canada Argentina France Australia Hong Kong New York Hungary France Canada Pennsylvania Texas Chile Missouri New Jersey Spain India China Texas Switzerland Notes: C&CF = coal and combustible fuels.741 6.050 3.405 10.109 7.443 48.463 894 1.845 53.808 54.580 7.988 13.463 1.354 1.521 24.348 15.609 3.352 13.956 21.389 36.094 16.044 3.829 -0.037 15.567 6.105 9.615 38.061 5.564 6.548 50.431 7.016 13.485 37.123 1.199 24.958 n/c 15.912 1.610 28.033 10.281 4. E&P = exploration and production.155 1.518 7.501 35.872 5. IPP = independent power producer and energy trader.862 9. DU = diversified utility.130 12.531 23. DNR = data not reported.593 6.028 152 38 96 158 7 160 196 49 129 19 84 115 74 93 165 146 159 126 108 137 167 91 133 92 18 190 136 97 83 116 127 40 151 35 90 170 120 227 178 117 47 166 41 132 222 86 89 113 71 12.728 17.639 58 6.136 33.752 18.386 42.920 12.184 1.806 19.403 6.970 6.441 15.207 13.508 800 1.092 738 1.253 940 1.293 6.860 44.437 27. EU = electric utility.127 25.915 13.787 7.990 29.334 1.159 5.095 27.129 647 37 38 65 60 106 54 61 107 53 43 46 69 47 59 66 83 75 49 71 78 79 56 116 64 101 74 94 73 63 86 84 88 113 67 70 100 111 176 76 98 68 93 95 92 138 158 90 85 120 5.060 9.066 8.747 18.605 51. GU = gas utility.740 13.945 21.498 8.498 14.807 1.617 9.521 5.371 1.717 716 1.850 2.006 36.688 33.553 69.339 15.856 15.452 3.924 9.216 1.134 1.831 4.183 8.049 17.692 12.279 987 1.753 4.074 11.839 5.102 9.885 19.912 21.945 17.372 9.472 -2.374 45.328 7.465 17.150 41.241 1.342 2.839 5.378 1.886 11.541 6.812 7.940 22.404 18.677 13.248 5.058 10.112 7.789 5.902 1.152 27.055 2.984 7.718 6.117 12.668 6.923 4.249 17.676 -7.758 14.682 19.205 26.605 50.066 9.113 4.519 9.861 24.077 29.350 996 985 1.904 26 104 83 34 173 36 23 159 48 127 74 62 96 80 39 49 41 55 85 57 60 115 116 119 193 32 73 122 112 84 102 164 78 154 125 63 138 28 59 106 152 87 172 91 31 168 147 105 171 14.599 7.822 24.685 11.506 776 1.527 10.639 8.951 14.410 85 1.424 130 11.558 12. R&M = refining and marketing.269 21.720 11.773 12.727 11.684 29.588 3.266 1.166 5.807 11.524 7.304 1.440 14.884 18.138 26.495 16.451 5.241 13.628 14.970 19.475 EU 69.524 5.254 26.701 9.016 521 375 1.top 250 global energy companies Platts Rank 2009 Company 51 FPL Group Inc 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 Eletrobras Talisman Energy Inc Gas Natural Sdg SA EDP Southern Co National Grid Sunoco Inc EOG Resources Inc Fortum OYJ FirstEnergy Corp Transneft OJSC Union Fenosa SA PG&E Corp Edison International XTO Energy Inc Williams Companies Inc Entergy Corp AES Corp NTPC Ltd SK Energy Co Ltd Inpex Corp Erg SpA Duke Energy Corp State or country Florida Brazil Canada Spain Portugal Georgia United Kingdom Pennsylvania Texas Finland Ohio Spain California California Texas Oklahoma Louisiana Virginia India Korea Japan Italy North Carolina Region Americas Americas Americas EMEA EMEA Asia/Pacific Rim Americas EMEA Americas Americas Americas EMEA Americas EMEA Americas Americas Americas Americas Americas Americas Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim EMEA Americas Americas Americas Americas Americas Americas Americas EMEA Asia/Pacific Rim Asia/Pacific Rim Americas EMEA EMEA Americas Americas Americas Americas Americas Americas EMEA Asia/Pacific Rim Asia/Pacific Rim Americas EMEA Return on Industry Assets Revenues Profits invested capital 3-year (GICS $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code) 44.215 0. IOG = integrated oil and gas.395 7.610 6.043 1.885 17.111 19.338 18.038 7.130 1.341 933 744 306 1.720 5. S&T = storage and transfer.492 1.113 7.681 22.400 22.576 8.262 -18.200 9.520 10.923 33.801 13.602 6.886 20.580 1.617 34.016 16.733 14.437 2.253 20.951 28.155 40.

319 74.126 7.251 -853 -16.328 3. 52 insight November 2009 .215 80 19.811 15.811 13.577 5.646 22.536 4.308 11.734 12.893 3.996 16.538 635 -1.210 16.455 35.378 21.325 723 550 467 646 1.886 11.288 3.650 57.020 4.008 30 -8.659 3.062 380 360 343 484 743 947 -89 835 184 615 626 772 442 299 526 421 -191 -2.989 20.929 3. GU = gas utility.061 9.780 3.249 -0.657 7.965 2.521 -13.183 5.262 5.631 25.839 34.954 5.831 18.056 21.092 9. S&T = storage and transfer.320 9.251 6.589 -0.575 12.831 18.492 1.495 10.676 29.382 684 164 511 447 -238 645 289 590 312 278 82 87 96 99 102 148 109 117 72 115 132 142 121 77 243 250 89 157 163 170 141 112 97 234 103 218 125 124 110 146 179 137 150 236 248 123 245 91 247 119 222 139 145 237 122 187 126 174 192 27.790 4. R&M = refining and marketing.159 2.467 24.822 5.761 14.858 11.935 -19.167 12.441 5.416 3.top 250 global energy companies Platts Rank 2009 Company 101 Mirant Corp 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 International Power plc VEO CEMIG State or country Georgia United Kingdom Austria Brazil Region Americas Asia/Pacific Rim EMEA EMEA Americas Americas Americas Americas Americas Americas Americas EMEA Asia/Pacific Rim Americas Asia/Pacific Rim Asia/Pacific Rim Americas Americas EMEA Asia/Pacific Rim Asia/Pacific Rim EMEA Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Americas EMEA Americas Americas Americas Americas EMEA Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Americas Americas Asia/Pacific Rim Asia/Pacific Rim Americas Americas Americas Americas EMEA Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Americas Americas Return on Industry invested capital 3-year (GICS Assets Revenues Profits $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code) 10.424 19.317 7.743 19.380 -0.976 12.294 30.839 7.277 5.646 3.539 4.957 124.002 5.042 4.417 8.627 10.353 20.355 13.094 59.188 211 1.549 41.370 5.639 -1.203 2.186 6.912 30.325 11.387 E&P IPP EU EU S&T S&T EU E&P E&P E&P GU R&M DU E&P EU IOG E&P IOG R&M EU IPP EU C&CF EU E&P EU DU S&T IPP C&CF R&M DU GU EU R&M EU R&M EU EU GU S&T EU DU DU C&CF R&M GU GU R&M PTT Exploration & Production Thailand Energy Transfer Partners LP Texas Plains All American Pipeline LP Texas Progress Energy Inc Apache Corp Canadian Oil Sands Trust Chesapeake Energy Corp Distrigas SA Formosa Petrochemical Xcel Energy Inc Santos Ltd ConocoPhillips Penn West Energy Trust CEPSA S-Oil Corp Edison SpA Tenaga Nasional Bhd North Carolina Texas Canada Oklahoma Belgium Taiwan Minnesota Australia Texas Canada Spain Korea Italy Malaysia Tokyo Electric Power Co Inc Japan Kyushu Electric Power Co Inc Japan Yanzhou Coal Mining Co Ltd China Kansai Electric Power Co Japan Addax Petroleum Corp Ameren Corp ONEOK Partners LP Endesa CONSOL Energy Inc Tupras DTE Energy Co Tokyo Gas Co Ltd Nippon Oil Corp CPFL Energia SA Valero Energy Corp KEPCO Questar Corp Enterprise GP Holdings LP Eletropaulo CenterPoint Energy Inc Centrica plc PT Bumi Resources Tbk Gail (India) Ltd ONEOK Inc Tesoro Corp Canada Missouri Oklahoma Chile Pennsylvania Turkey Michigan Japan Japan Brazil Texas Korea Utah Texas Brazil Texas United Kingdom Indonesia India Oklahoma Texas Scottish & Southern Energy United Kingdom Chubu Electric Power Co Inc Japan Hongkong Electric Holdings Ltd Hong Kong Hindustan Petroleum Corp Ltd India Notes: C&CF = coal and combustible fuels.588 11.666 7.287 6. DU = diversified utility.031 190 163 171 167 135 47 136 115 200 119 140 53 123 229 24 5 191 39 77 93 94 150 192 50 187 31 143 145 183 180 66 134 84 58 20 176 12 237 57 203 35 194 122 37 207 64 188 87 51 1.346 12.168 14.588 24.424 3.829 70.122 9.376 3.347 4.375 15.503 -3.061 22. IPP = independent power producer and energy trader.588 15.659 -1.433 203 93 155 153 163 170 68 72 216 54 217 145 89 194 15 14 141 144 219 42 107 114 238 22 220 75 101 200 149 198 225 92 120 30 46 187 61 181 25 182 88 215 118 70 230 180 228 146 197 3.759 8 142 65 72 95 131 188 197 13 218 21 172 180 16 236 250 98 179 67 225 194 162 12 234 32 221 177 78 107 25 81 189 201 235 248 76 245 55 244 69 230 27 191 239 24 153 43 182 150 26.832 118.728 16.161 5.650 10.329 16.332 10.644 25.361 19.653 6.664 IPP 6.965 9.312 8.093 950 940 866 437 773 712 1.565 1.068 1.371 6.340 42. IOG = integrated oil and gas.179 8.298 1.208 -3.095 8.521 21.334 23. EU = electric utility.374 5.720 4.205 18.210 24.190 3.865 14.465 35.907 11.624 15.590 18.627 11.313 24.044 22.709 27.749 11.676 4.317 9.373 0.688 162 3.998 1.501 14.981 3.127 17.005 25.241 28.311 13.284 5.032 29.577 8.194 18.477 57.140 4.145 43.440 3.131 1.217 26.703 73.444 8.935 28.364 7.806 27. DNR = data not reported.550 -5.425 9.182 2.958 7.319 4.015 142.198 7.309 5.587 35.747 25.629 8.292 41.952 6.391 225.830 4. E&P = exploration and production.444 6.000 41.997 27.055 13.907 20.843 142.259 -4.322 34.157 28.405 11.873 29.817 28.422 9.254 12.501 10.931 24.204 1.033 -2.323 38.470 3.180 3.649 30.817 3.748 7.229 34.

627 18.680 20.540 239 2.981 29.179 315 14.573 -2. R&M = refining and marketing.736 1.003 1.874 13.312 4.301 -164 300 395 545 569 125 282 464 354 294 314 294 431 454 392 231 240 133 159 147 114 195 162 108 118 104 151 229 184 129 140 130 161 177 241 181 135 136 249 239 127 238 223 244 131 164 167 189 246 235 178 153 134 128 226 190 143 166 186 173 185 149 144 154 0.760 23.079 -239 574 -238 162 -932 554 359 353 285 -1.682 6.602 5.086 1.590 4.284 12.752 28.975 12.308 15.454 29.487 34 79 214 137 139 222 74 110 233 230 242 128 44 165 226 181 232 164 125 33 91 216 221 95 49 245 117 67 40 238 182 169 149 70 41 157 206 228 250 103 195 246 213 161 158 174 247 231 223 34 -321 546 370 437 734 264 364 773 699 826 403 90 295 568 497 555 365 300 -412 298 540 537 -3.810 2.784 2.086 6. S&T = storage and transfer.588 3.211 28.944 E&P 23.821 3.357 -1.740 17.890 1.177 15.855 26.714 31.643 28 26.967 53.594 2.582 1.129 3.301 18. EU = electric utility.881 34.673 14.475 19.876 3.133 -4.712 2.319 7.030 10.601 6.809 4.634 8.863 5.992 4.157 31.722 9.654 4.984 6.397 20.804 4.060 32.682 4.132 35.360 1.587 6.195 5.169 6.840 20.317 18.809 21.435 10.859 1.135 1.199 4.729 2.223 10.393 97 44 250 113 129 128 123 134 223 243 237 185 121 53 235 98 241 184 126 117 148 76 206 64 132 183 71 175 135 208 151 157 166 103 150 136 161 142 221 139 205 249 244 137 176 211 247 177 213 38.950 2.304 10. IOG = integrated oil and gas.798 20.769 218 811 105 19.527 6.287 11.014 6.097 3.298 24. DNR = data not reported.749 3.407 6.551 23.974 9.408 7.529 2.688 5.111 3.105 10.238 9.754 12.639 13.704 5.124 12.134 -1.956 27.047 2.569 19.028 4.435 3.908 3.509 1.338 6.431 5.048 3.876 12.703 12.285 6.032 15.465 3.730 3.979 14.226 8.764 10.212 5.513 3.054 232 238 4 193 187 141 215 203 48 22 31 155 226 219 36 209 26 122 204 242 214 211 79 247 240 105 237 198 246 88 169 173 163 249 243 202 157 174 82 216 94 46 66 207 184 123 51 144 106 4.103 5.563 15.792 2.873 8.055 5.606 n/c 15.205 -15.647 13.424 38.254 2.931 8.650 15.791 3.274 3.991 6.940 7.631 84.618 11. DU = diversified utility.901 10.421 4.top 250 global energy companies Platts Rank 2009 Company 151 Novatek Oao 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 Idemitsu Kosan Co Ltd Drax Group NiSource Inc A2A SpA Snam Rete Gas SpA Korea Gas Corp Osaka Gas Co Ltd Frontline Ltd Linn Energy LLC GS Holdings Corp Saudi Electricity Co Southwestern Energy Co Tractebel Energia SA SNP Petrom Pepco Holdings Inc Nippon Mining Hldgs Inc OAO Tatneft COPEL Devon Energy Corp PKN ORLEN China Yangtze Power Co Galp Energia SGPS SA Cosmo Oil Co Ltd Wisconsin Energy Corp SCANA Corp EWE Showa Shell Sekiyu KK CMS Energy Corp Allegheny Energy Inc Gasunie State or country Region Russian Federation EMEA Japan United Kingdom Indiana Italy Italy Korea Japan Bermuda Texas Korea Saudi Arabia Texas Brazil Romania Japan Asia/Pacific Rim Asia/Pacific Rim EMEA Americas EMEA EMEA Asia/Pacific Rim Asia/Pacific Rim Americas Americas Americas Americas Asia/Pacific Rim EMEA Americas Americas EMEA Asia/Pacific Rim EMEA Americas Americas EMEA Asia/Pacific Rim Asia/Pacific Rim EMEA Asia/Pacific Rim Asia/Pacific Rim Americas Americas EMEA Americas Asia/Pacific Rim Americas Americas EMEA Asia/Pacific Rim Americas EMEA Americas Americas Asia/Pacific Rim EMEA Americas Americas EMEA Americas Return on Industry invested capital 3-year (GICS Assets Revenues Profits $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code) 4.473 8. E&P = exploration and production.811 14.633 9.390 9.767 15.795 16.649 8.931 3.830 13.369 5.818 33.041 2.722 8.386 2.824 41.275 18. November 2009 insight 53 .111 3.089 2.424 16.883 17.481 -4.502 10.995 2.727 21.006 15.210 2.384 1.570 2.519 4.273 6.225 22.695 0.313 -13.983 42.911 50.713 6. IPP = independent power producer and energy trader.586 3.908 15.508 9.045 1.936 -13.447 2.217 18.521 10.819 4.807 14.342 5.439 19.783 27.640 4.370 15.840 11. GU = gas utility.770 15.337 13.627 R&M EU IPP DU DU GU GU GU E&P S&T E&P S&T R&M EU E&P DU IPP IOG EU R&M E&P IPP EU E&P R&M IPP EU IOG R&M GU DU DU EU IPP R&M DU EU GU EU DU EU E&P C&CF EU IOG DU E&P EU C&CF Tohoku Electric Power Co Inc Japan Enerplus Resources Fund Canada Enbridge Energy Partners LP Texas Abu Dhabi National Energy Co United Arab Emirates EMEA District of Columbia Americas Russian Federation EMEA Brazil Oklahoma Poland China Portugal Japan Wisconsin South Carolina Germany Japan Michigan Pennsylvania Netherlands Iberdrola Renewables SA Spain Chugoku Electric Power Co Japan Hong Kong & China Gas Co Ltd Hong Kong Constellation Energy Group Inc Maryland Cheung Kong Infrastructure Bermuda Integrys Energy Group Inc Illinois EGL Arc Energy Trust Arch Coal Inc Polish Oil And Gas Co Encore Acquisition Co Terna SpA Cameco Corp Switzerland Canada Missouri Poland Texas Italy Canada Shikoku Electric Power Co Japan MDU Resources Group Inc North Dakota Notes: C&CF = coal and combustible fuels.874 8.

292 14.841 2.712 4.635 3.705 102 152 243 241 166 130 197 131 72 189 248 198 184 240 224 168 175 109 236 159 235 234 199 244 225 177 209 212 185 193 186 217 170 105 178 151 210 220 208 239 201 204 249 202 205 172 215 227 219 194 196 388 396 266 -13 231 -541 134 296 366 299 257 322 388 120 166 194 358 216 344 318 235 346 269 254 240 295 240 120 231 217 75 33 233 180 259 287 214 256 171 221 307 209 225 131 236 221 204 216 215 155 152 194 233 205 242 224 182 160 180 197 171 156 227 221 217 165 211 169 172 203 168 193 199 201 183 200 228 206 210 230 232 204 219 196 188 212 198 220 208 175 213 207 225 202 209 214 5.800 9.467 8.738 6.935 15.620 2.062 7.566 -7.405 5.445 981 3.005 3.056 169 6.817 3.886 3.911 19. DU = diversified utility.144 2.525 0. E&P = exploration and production.206 14.576 3.358 5. DNR = data not reported.988 20.948 15.569 2.023 4.126 148 224 54 121 200 233 102 241 205 212 70 149 145 61 138 229 223 171 118 140 99 87 112 104 85 135 156 168 175 101 154 128 231 228 164 181 186 139 199 114 220 208 183 213 210 206 192 195 185 81.783 3.671 9.301 2.040 14.400 4.227 5.224 13.343 4.007 6.683 1.143 3.788 8.322 4.796 4.829 3.280 6.533 1.697 7.549 3.092 S&T IPP E&P EU EU IPP EU IPP R&M DU E&P DU DU GU DU IPP EU S&T GU GU E&P S&T DU E&P GU R&M DU S&T DU GU DU GU EU R&M IOG GU EU EU EU GU IPP IPP EU EU EU DU DU E&P IPP Ultrapar Participacoes SA Brazil Electric Power Development Co Japan Denbury Resources Inc Red Electrica Corp SA Northeast Utilities Calpine Corp AES Elpa SA Neste Oil Oyj Tullow Oil plc Alliant Energy Corp Acea SpA Energen Corp Canadian Utilities Datang Power Eskom TEPPCO Partners LP Enagas SA UGI Corp Pengrowth Energy Trust MVV Energie AG Range Resources Corp National Fuel Gas Co NuStar Energy LP NSTAR Southern Union Co AGL Energy Nicor Inc OGE Energy Corp AGL Resources Inc Hellenic Petroleum SA Petrobras Energia SA Atmos Energy Corp EVN Texas Spain Massachusetts California Brazil Finland United Kingdom Wisconsin Italy Alabama Canada China South Africa Texas Spain Pennsylvania Canada Germany Texas New York Texas Massachusetts Texas Australia Illinois Oklahoma Georgia Greece Argentina Texas Austria Huaneng Power International China United Utilities Group plc United Kingdom Overseas Shipholding Group Inc New York Hokuriku Electric Power Co Japan Reliance Infrastructure Ltd India Pinnacle West Capital Corp Arizona EQT Corp Dynegy Inc PowerGrid Corp Of India NV Energy Inc Fortis Inc Hera SpA Atco Ltd Transalta Corp Pennsylvania Texas India Nevada Canada Italy Canada Canada China Resources Power Holdings Hong Kong Pioneer Natural Resources Co Texas Notes: C&CF = coal and combustible fuels.973 1. IPP = independent power producer and energy trader.519 6.099 6.801 1.191 7.937 4.386 4.661 94.874 24.675 5.930 24.249 10. IOG = integrated oil and gas.264 34.346 10.668 1.364 19.678 15.563 4.566 5.163 4.986 13.230 -7.345 3. GU = gas utility.325 6.371 5.336 2.top 250 global energy companies Platts Rank 2009 Company 201 Origin Energy Ltd 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 State or country Australia Return on Industry invested capital 3-year (GICS Assets Revenues Profits Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code) Asia/Pacific Rim 10.050 6.367 1.528 3.876 0.910 9.969 IOG Americas Asia/Pacific Rim Americas EMEA Americas Americas Americas Asia/Pacific Rim EMEA EMEA EMEA Americas EMEA Americas Americas Asia/Pacific Rim EMEA Americas EMEA Americas Americas Americas EMEA Americas Americas Americas Americas Americas Asia/Pacific Rim Americas Americas Americas Asia/Pacific Rim EMEA Americas Americas EMEA Asia/Pacific Rim Americas Americas Americas Asia/Pacific Rim Asia/Pacific Rim Americas Americas EMEA Americas Americas Americas 4.387 9.372 3.819 1.276 9.202 7.291 -0.280 5.849 3.890 5.047 12.117 3.863 7.323 -3.111 1.228 7.371 26.071 2.007 3.784 6.487 2.809 5.962 19.213 10.148 10.554 7.278 2.998 7. S&T = storage and transfer.178 6.895 3.460 0.685 4.652 3.682 4.202 39.747 1.996 -11.727 8.417 5.777 4.582 -3.791 18.768 11.719 12.395 5.065 3.339 65.510 13.800 5.943 4.967 4.751 29.890 13.701 6.466 176 18.670 6.625 11.789 7.269 7.070 4.431 34.001 11.237 14.077 0.460 8.046 8. 54 insight November 2009 .277 2.194 7.612 3.330 14.690 9.176 1.620 5.705 3.590 8.130 4.648 1.665 15.775 7.172 23.352 3.274 162 282 191 4.059 6.230 1.937 3.283 6.564 4.134 3.300 22.643 0.446 9.127 232 109 248 188 143 110 204 95 209 130 236 189 192 246 201 99 108 231 210 222 233 245 227 226 242 240 186 190 196 234 212 207 133 199 218 214 174 224 156 229 140 165 178 158 167 195 191 179 202 14.423 6.710 15.919 3.898 21.297 7.383 4. EU = electric utility.996 2.688 9.189 11.123 16.511 5.411 45.986 3.124 2.074 7.690 4.788 -0.092 8.389 5.221 3.029 21.511 0.012 4.812 5. R&M = refining and marketing.990 1.361 1.163 7.

with ExxonMobil in the number one position and Chevron in second place.top 250 global energy companies prominent in the top 50 fastest growing list and made up 30% of the fastest growing companies from the Americas. but perked up again in 2009 as contango led oil companies to utilize floating storage.751 36. led by Addax Petroleum. owing to its sophisticated refinery system. The strike could have paralyzed over 50% of the US’s refinery capacity. coming in at fourth place in the R&M table and 59th overall. Oil price moves also meant that 16 oil storage and transportation companies made the top 250 in 2009 vs 13 in 2008. ConocoPhillips fell from number 16 in 2. If only three years of data was available then it is a two year CGR. Reliance bested its rivals in Asia. they narrowly averted a massive strike of United Steelworkers early in 2009.587 50.308 39.937 57.485 Platts Rank 129 227 202 126 166 48 142 118 246 95 Major Majors The major integrated oil and gas companies did not have a smooth ride on their way to dominating the top 10. The worldwide recession heralded a compression in refining margins with people driving less and upgrading to more fuel-efficient cars. Sunoco is also in the process of shutting down refining capacity. Owners of oil storage and natural gas pipelines were the main beneficiaries. however. while products including gasoline and heating oil fell. ExxonMobil made the top of the list for the fifth year in a row. who were negotiating a new contract with Royal Dutch Shell. This year. having reaped the benefits of a contango market which lasted a good part of 2008. which has recently been taken over by China’s Sinopec. Sunoco appeared to have a delayed reaction. saw its revenues fall by 27% for the financial year 2008. Refining and marketing firms.912 94. Fastest growing Americas companies. Valero suffered a similar fate. The US grabbed two spots in the top 10.631 43. falling from 14th to 138th and is closing down refineries in 2009. ConocoPhillips.262 42. in the US. 2008 to 117th in Platts 2009 rankings.503 41. largely thanks to diesel demand from Asia. Source: S&P Capital IQ Compustat/Platts November 2009 insight 55 . Indian Oil Corp was second (33rd overall) and Japan was third with TonenGeneral Sekiyu (56th overall). Waterborne oil shipping sank along with demand in 2008. suffered greatly from the economic downturn as demand dropped and margins shrank. however. Two Indian R&Ms led the table with Reliance Industries in first place (25th overall). Rank Company 1 2 3 4 5 6 7 8 9 10 ONEOK Partners LP NuStar Energy LP Ultrapar Participacoes SA Addax Petroleum Corp Southwestern Energy Co Suncor Energy Inc Enterprise GP Holdings LP Penn West Energy Trust Fortis Inc NRG Energy Inc State or country Industry Oklahoma Texas Brazil Canada Texas Canada Texas Canada Canada New Jersey S&T R&M S&T E&P E&P IOG S&T E&P EU IPP 3-year CGR 124. having started 2008 with good demand and healthy margins. which is heavily dependent upon refining. And. with revenues of The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). which optimizes cheaper heavy crude oil.176 81. Crude oil prices remained relatively high as the appetite for commodities exposure continued. Refining Takes it on the Chin The picture for the oil & gas industry was not all rosy. and Southwestern Energy. All were hit by falling oil prices in last-quarter 2008 and sinking demand throughout first-half 2009.

194 3.885 19.463 1.020 4.577 66 18 56 82 81 50 86 173 115 116 119 154 125 168 147 203 145 194 15 219 42 114 238 22 120 30 46 18. E&P = exploration and production.060 9. #1 in Asia by industry.094 59.810 13.405 10. $425 billion.912 6.655 57.top 250 global energy companies Top Asia 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Platts Rank 2009 Company 9 Petrochina Co Ltd 21 23 25 26 33 40 46 56 73 74 75 85 86 97 98 102 113 115 116 120 121 123 124 125 134 135 136 CNOOC Ltd China Petroleum & Chemical Corp Reliance Industries Ltd Oil & Natural Gas Corp Ltd Indian Oil Corp Ltd China Shenhua Energy Co Ltd PTT Plc TonenGeneral Sekiyu Corp NTPC Ltd SK Energy Co Ltd Inpex Corp Woodside Petroleum Ltd CLP Holdings Bharat Petroleum Co Ltd China Coal Energy Co PTT Exploration & Production Formosa Petrochemical Santos Ltd Tokyo Electric Power Co Inc S-Oil Corp Kyushu Electric Power Co Inc Tenaga Nasional Bhd Yanzhou Coal Mining Co Ltd Kansai Electric Power Co Tokyo Gas Co Ltd Chubu Electric Power Co Inc Nippon Oil Corp Return on Industry Assets Revenues Profits invested capital (GICS State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code) China 174. DU = diversified utility.188 26.477 57.856 4.204 467 1.232 11. In 2009.817 28.350 4.885 1.488 6. The Western major’s 2008 fourth-quarter net income took a 33% blow.494 800 1.015 6.216 1.624 15.484 4.292 41.787 27.877 24.765 25.002 18. as well as one in Belgium to improve its output of clean diesel by 10%.753 10.094 20.443 19.521 9.843 142.467 24.907 10 134 52 11 59 75 110 7 91 133 92 35 90 86 89 8 172 16 236 67 225 162 12 234 201 235 248 E&P IOG R&M E&P R&M C&CF IOG R&M IPP R&M E&P E&P EU R&M C&CF E&P R&M E&P EU R&M EU EU C&CF EU GU EU R&M Notes: C&CF = coal and combustible fuels.538 16 24 28 27 57 30 62 106 56 116 64 67 70 158 90 82 142 77 243 163 170 112 97 234 150 236 248 25.380 -0.251 -853 360 343 743 947 -89 421 -191 -2. DNR = data not reported.551 7. owing to the plunge in oil prices.056 20.681 18. but then still finished the year with record profits.136 10.426 37.011 9.599 7. GU = gas utility. IPP = independent power producer and energy trader. while it nearly doubled production capacity from the giant Tengiz field in Kazakhstan.546 29.884 18.309 4.679 3.645 26.817 40. The firm faced criticism after output fell in 2008 to its lowest level since Mobil was acquired in 1999.180 5.492 1.518 11.375 7. 56 insight November 2009 . IOG = integrated oil and gas.105 9.090 207.539 80 7 48 69 29 92 25 42 133 30 124 179 154 61 148 190 53 229 24 77 93 150 192 50 84 58 20 6.721 6 13.261 112. Chevron moved into second place in 2009 from fourth place in 2008.703 73. It also saw start-up this year of production from its new giant LNG trains in Qatar. causing Exxon3.945 17.589 -0.750 9. The company is now spending billions to find new reserves.988 23.717 716 1.531 43. ExxonMobil will also spend over $1 billion at two US refineries.372 9.391 18.541 6.847 28.521 -13.319 74. R&M = refining and marketing.886 2.145 43.376 3.386 42.117 12.354 1. Chevron started up new projects in the US Gulf of Mexico and Indonesia in 2008. market conditions have remained challenging. S&T = storage and transfer. Industry IOG E&P R&M C&CF IPP EU GU DU Company Petrochina Co Ltd CNOOC Ltd Reliance Industries Ltd China Shenhua Energy Co Ltd NTPC Ltd CLP Holdings Tokyo Gas Co Ltd AGL Energy Country China Hong Kong India China India Hong Kong Japan Australia Platts Rank 2009 9 21 25 40 73 86 134 230 Source: S&P Capital IQ Compustat/Platts Mobil’s net income to drop 66% in the second quarter.141 4.935 12.523 8 16.931 13. having brought on-stream some significant new fields and improved its upstream revenues by about 50%.341 375 1.249 -0.747 25.248 14.998 15.741 6.140 16.451 3.043 1.952 26.676 23.853 9 156. EU = electric utility.825 33.210 7.004 62 IOG Hong Kong China India India India China Thailand Japan India Korea Japan Australia Hong Kong India China Thailand Taiwan Australia Japan Korea Japan Malaysia China Japan Japan Japan Japan 30.

BP has also been sorting out several problems with its US refineries.056 21.287 11. however.996 38.703 12.594 18.378 21. IOG = integrated oil and gas.065 2. in 2009. including Texas City.796 30.292 2.943 4. second only to ExxonMobil.320 9.097 17.822 3.454 29.940 27. Voted “Energy Company of the Year” at the 10th annual Platts Global Energy Awards last year.089 8.212 18.189 25 230 180 228 97 44 123 134 121 117 183 71 135 208 150 221 137 169 109 95 99 196 133 224 165 178 25. S&T = storage and transfer.643 6.407 6.424 19.317 18.005 24.801 4.840 34.228 5. Industry IPP EU C&CF E&P IOG GU R&M DU Company China Resources Power Holdings Reliance Infrastructure Ltd PT Bumi Resources Tbk Woodside Petroleum Ltd PTT Plc Korea Gas Corp Formosa Petrochemical AGL Energy Country Hong Kong India Indonesia Australia Thailand Korea Taiwan Australia 3-year CGR 65.829 181 1.722 10.440 3. BP’s fortunes may.274 7. while Italy’s ENI was number ten.384 32.111 9.679 29. be turning after it made a giant oil find in the Gulf of Mexico in September 2009.111 10. Russians Rosneft and Gazprom came in eighth and ninth.890 -4.383 4.575 20.467 0.570 2.652 3.382 645 289 590 34 -321 264 364 90 -412 574 -238 -932 554 -164 569 294 282 196 -541 120 240 75 287 221 307 247 122 187 126 231 240 195 162 229 241 127 238 244 131 235 128 186 191 215 242 227 200 230 188 208 175 -4.177 0. made a major commitment towards Floating LNG. EU = electric utility.352 0.161 5.874 13.390 15.954 5.564 15.372 Platts Rank 2009 243 239 146 85 46 158 113 230 Source: S&P Capital IQ Compustat/Platts November 2009 insight 57 . which suffered a fatal explosion in 2005. IPP = independent power producer and energy trader.357 -1.033 91 14.206 -3.029 7. 4.754 8.129 -13.342 41.042 0.992 4.312 5.014 315 6.563 15.300 45.099 23. Gazprom ranked number two in terms of profitability. GU = gas utility.582 1. Fastest growing Top 250 Asian companies by industry.157 2. PetroChina was the only Asian IOG representative in the top ten.134 -1.006 1.108 27.259 55 EU Korea Indonesia India India Japan Japan Korea Japan Korea Japan China Japan Japan Hong Kong Japan Bermuda Japan Australia Japan China China Australia Japan India Hong Kong India 70.274 3.278 244 24 153 43 232 238 215 203 226 242 105 237 246 88 243 82 207 176 224 241 229 175 231 139 208 183 EU C&CF R&M GU R&M EU GU GU R&M R&M IPP EU R&M GU R&M EU EU IOG IPP IPP IPP DU EU EU IPP EU Notes: C&CF = coal and combustible fuels.117 5.top 250 global energy companies Platts Top Rank Asia 2009 Company Hongkong Electric Holdings Ltd 29 139 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 140 146 147 148 152 153 158 159 164 171 177 178 180 181 186 190 195 201 203 209 217 230 234 239 243 244 KEPCO PT Bumi Resources Tbk Hindustan Petroleum Corp Ltd Gail (India) Ltd Idemitsu Kosan Co Ltd Tohoku Electric Power Co Inc Korea Gas Corp Osaka Gas Co Ltd GS Holdings Corp Nippon Mining Hldgs Inc China Yangtze Power Co Chugoku Electric Power Co Cosmo Oil Co Ltd Hong Kong & China Gas Co Ltd Showa Shell Sekiyu KK Cheung Kong Infrastructure Shikoku Electric Power Co Origin Energy Ltd Electric Power Development Co Huaneng Power International Datang Power AGL Energy Hokuriku Electric Power Co Reliance Infrastructure Ltd China Resources Power Holdings Power Grid Corp Of India Return on Industry Assets Revenues Profits invested capital (GICS State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code) Hong Kong 8.276 9.590 33. Shell is investing heavily in LNG production as well as carbon capture and storage. R&M = refining and marketing. E&P = exploration and production. while work progresses in Qatar on what will be the world’s largest Gas-to-Liquids plant.911 5.644 237 1. having finally resolved the battle for control over TNK-BP with partners Alfa-Access-Renova in September 2008. DNR = data not reported. It has also.804 -4. Third place Royal Dutch Shell’s $458 billion revenues dwarfed even ExxonMobil’s.728 16.983 42.659 3.355 23. DU = diversified utility.673 5.625 10. BP moved up one place to fourth position.127 29.508 9.807 14.086 6.466 1.445 981 57 207 64 188 34 79 74 110 44 33 245 117 40 238 41 250 161 162 152 131 168 185 170 220 204 249 -2.

In 2009. PetroChina was followed by E&P giant CNOOC in second place and Indian R&M Reliance industries in third. 5.top 250 global energy companies The Tiger Continues to Roar China. an Australian distributed utility. Only two US electric utilities made the top ten ranks of the Top 250. China and India pledged to substantially reduce emissions. Asian companies made up more than 20% of the 50 fastest growing companies list. with TonenGeneral Sekiyu of Japan third. it took over UK nuclear provider British Energy in 2008 and Belgian electricity supplier SPE this year.974 53. wind and hydro power expansion. with China Coal Energy third and Yanzhou Coal Mining fourth. France and Germany are leading the rush to smart grid technology development in EMEA. Spain. bought a 25% share in Spain’s Endesa (ranked number 5) earlier this year. making them more profitable for oil refiners.012 28.257 30. France’s EDF Energy ranked first in the European leading companies table. and AGL Energy. The recession dented demand there as well as elsewhere. New to the ranks of the Asian top energy companies by industry catagory were NTPC. and also took 30% of the top 10 places in the R&M category. China Shenhua Energy came in at number one in the industry. and Shenhua signed an agreement in October to work with Shell to develop clean coal technology. Europe is leading the world in solar. Italy’s largest utility.682 36. but China’s seemingly endless thirst returned in the second half of 2009.502 35. PetroChina briefly became the world’s largest firm in May 2009 before ExxonMobil edged it out again in October.826 29.830 31. Reliance Industries and Indian Oil Corporation were first and second.996 Platts Rank 167 173 7 96 8 127 24 17 247 36 prompting further concern over the countries’ greenhouse gas emissions. Tokyo Gas Co.. Exelon of The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). which mandates that 20% of energy generation comes from renewable sources by 2020. European Utilities Bloom Eight of the top ten electric utilities in Platts 2009 rankings were from Europe. Fastest growing EMEA companies. the number two ranked Enel. Newcomer to the list PT Bumi Resources in Indonesia took sixth place. Source: S&P Capital IQ Compustat/Platts 58 insight November 2009 . EDF has been on a buying spree. Not to be outdone. India is actively trading coal and buying coal mines overseas. the Chinese government has embarked on a plan to slowly reduce subsidies on oil products. Chinese and Indian demand for coal pushed prices to new heights in 2008. Also ranked number one in terms of assets.876 42. Hong Kong and India ruled Asia and the Pacific Rim tables as oil and coal demand continued to grow across the region.254 37. Rank Company 1 2 3 4 5 6 7 8 9 10 Abu Dhabi National Energy Co Iberdrola Renewables SA Rosneft Oil Company Acciona SA Gazprom Oao Scottish & Southern Energy Gazprom Neft BG Group plc Hera SpA Iberdrola SA Country United Arab Emirates Spain Russian Federation Spain Russian Federation United Kingdom Russian Federation United Kingdom Italy Spain Industry DU IPP IOG EU IOG EU IOG IOG DU EU 3-year CGR 84. Asia dominated the coal and consumable fuels (C&CF) market with three of the top eight firms coming from China. but no Indian company has yet made the top ten in the C&CF category. India’s largest power company. and one from Indonesia. The firm led the Asian table as refining margins improved. If only three years of data was available then it is a two year CGR. Boosted by the European Commission’s 20-20-20 targets.

973 26. which is investing in large-scale solar plants.108 29.404 27.308 39.671 34. France’s GDF Suez. there were only three utilities–RWE (a multi-utility) and electric utilities EDF and ENEL. came in second. and at number 27 in the overall rankings.top 250 global energy companies Illinois. owing in part to high natural gas prices in first-half 2008.254 41.262 42.300 10 Suncor Energy Inc 11 Enterprise GP Holdings LP 12 Rosneft Oil Company 13 Penn West Energy Trust 14 Fortis Inc 15 Acciona SA 16 Gazprom Oao 17 NRG Energy Inc 18 Scottish & Southern Energy 19 Chesapeake Energy Corp 20 Encore Acquisition Co 21 Denbury Resources Inc 22 Range Resources Corp 23 Husky Energy Inc 24 Murphy Oil Corp 25 Gazprom Neft Source: S&P Capital IQ Compustat/Platts November 2009 insight 59 .944 26.974 81.826 17 30.588 35.314 30. with India’s NTPC second at number 73.996 28.176 84.455 27.068 27.631 45. Of the 14.587 53. a nuclear and fossil fuel utility. Gas Natural of Spain came in 16 places higher than in 2008 at number 54. which may damage their returns this year even if winter arrives hard and early.103 27.940 27.091 32.127 29. multi and independent utilities.796 43.937 57. A contraction in power demand this year is expected to damage revenues.829 29. Company 1 2 3 4 5 6 7 8 9 ONEOK Partners LP NuStar Energy LP Abu Dhabi National Energy Co Ultrapar Participacoes SA Addax Petroleum Corp Iberdrola Renewables SA Southwestern Energy Co Reliance Infrastructure Ltd 3-year Platts CGR Rank 124.485 35.012 28. coming in at number 72 in the overall 6.280 27. despite the challenges it faces with “greening up” its generation and carbon cap and trade policies. and FPL of Florida. Independent Power Producer AES of Virginia won the top spot among IPPs. with Belgium’s Distrigas a distant 112th (up from 149th in 2008). In the top 20 for all energy companies. Gas utilities climbed the ladder.876 50.408 34.751 37. 2009 newcomers to Platts Top 250 were heavily weighted toward utilities.627 29. at 50th down 3 places from 2008. seven were electric utilities and the rest scattered between gas. only Virginia’s Dominion Resources was ranked.045 26. which comprised 14 of the more than 30 newly-ranked companies.764 29. a newcomer to the list after the merger of GDF and Suez in 2008.191 34. The Europeans were well represented in the top 50. Consumer complaints have been rife and gas prices have since toppled.360 130 16 146 69 30 85 200 46 247 36 110 158 113 93 39 25 124 12 132 40 156 217 151 191 rankings. Germany’s RWE ranked first (Platts rank number 14). Top 50 fastest growing companies.679 29. The industry continues to attract new investment. Other newcomers fell primarily in the E&P space.830 35.822 27. ■ China Resources Power Holdings 65.159 27. Among multi-utilities.425 30.503 42.257 227 167 202 243 126 173 166 239 48 142 7 118 246 96 8 95 127 111 198 204 225 35 44 24 Company 26 BG Group plc 27 Endesa 28 Encana Corp 29 PT Bumi Resources Tbk 30 XTO Energy Inc 31 Ecopetrol SA 32 Woodside Petroleum Ltd 33 Cameco Corp 34 PTT Plc 35 Hera SpA 36 Iberdrola SA 37 Canadian Oil Sands Trust 38 Korea Gas Corp 39 Formosa Petrochemical 40 Enersis SA 41 Anadarko Petroleum Corp 42 Reliance Industries Ltd 43 Yanzhou Coal Mining Co Ltd 44 LUKOIL Oil Company 45 Tupras 46 China Shenhua Energy Co Ltd 47 A2A SpA 48 Datang Power 49 Novatek Oao 50 Integrys Energy Group Inc 3-year Platts CGR Rank 30.682 36. with high prices attracting new investment there and in storage & transportation.226 27.912 129 94.048 27.938 31. while for the US.502 36.

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