One step closer to the market
This week, HydroWingas celebrated the official opening of its new office in Richmond, near London. "We have positioned ourselves one step closer to our customers, and intend to be a leading player in the British gas market," says Torstein Indrebø, who represents the owner Hydro on the HydroWingas board.
Exactly one year ago, agreements were signed on the establishment of the company HydroWingas for marketing and sales of natural gas in the UK. The company is owned 50/50 by Hydro and the German company Wingas. HydroWingas is now in normal operation. The organization is in place and several sales contracts have been signed.
"Moving to our own offices in Richmond makes us better able to focus on our goals and expand our operations further," says managing director Solveig Hinsch.
"HydroWingas has the advantage of solid financial backing from the owners, who are also securing us access to physical gas reserves. We are already supplying gas to several customers, and our customer portfolio is growing fast."
When the Ormen Lange field comes onstream on 1 October 2007, Norway will have an export volume at the level of Canada, the world's second largest gas exporter after Russia. Gas will transported through the pipeline Langeled to Easington in England. The field will be able to supply 70 million cubic metres of natural gas a day to the market. This will cover up to 20 percent of the gas demand in the UK, which will become dependent on importing natural gas as its own production declines.
"Through our ownership interest in Ormen Lange, Hydro's gas production will double during the course of five years. It is very pleasing to note the increasing need for energy in Europe," comments Indrebø.
Today, Hydro exports around eight billion cubic metres of its own production of gas a year. Contracts have not been signed for the gas from Ormen Lange. Most of Hydro's part of this production will be sold in the British market through HydroWingas.
Wingas is mainly supplied with gas from Gazprom, which owns 35 percent of the company. This gives HydroWingas the opportunity to offer contracts of both long and short duration. Hydro and Wingas both have experience of marketing to end users on the Continent, and will now use this expertise in the UK.
"HydroWingas enables us to move closer to our customers in the UK. Whereas we previously sold most of our gas "on beach", to large wholesale companies, we are now going a step further and selling gas to large industrial customers and power companies. We want to build up a wide customer portfolio and acquire important market positions," Indrebø says.