LP Gas: a bright future for an old fossilMarketing & technology issues

Yvon SellierDirector Technology and Business PracticesWorld LP Gas Association

Railroad Commission of Texas, 2007 Propane Technology ForumAustin, Texas, Wednesday, September 12, 2007

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LP Gas global - Today’s context

Abundant supplyHigh prices in absolute termsLow prices relative to other hydrocarbons

Climate change, peak oil: threats or opportunities?Marketing & Technology

issues

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The Unique Global Association representing the LP Gas Industry for 20 years

More than 160 members operating in 90 countries worldwide

Representing the interests of the full LP Gas value chain from producer to distributor

Partnering with key global organisations such as the World Bank, WHO and UNDP

As the authoritative, global voice for LP Gas, the WLPGA promotes the use of LP Gas

worldwide to foster a cleaner, healthier and more prosperous world.

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A powerful Industry Association

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The WLPGA – Our Mission

To add value to the sector by driving premium demand for the product To add value to the sector by driving premium demand for the product

Enhance the awareness of LP Gas

Identify and support LP Gas market development opportunities

Promote good business practices

Represent the industry in policy formulation

Facilitate information exchange among all stakeholders

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WLPGA & Global Networking

Industry CouncilGAIN: Global Autogas Industry NetworkGLOTEC: GLObal TEChnology network

Global Technology Conferences

Networking, cross fertilisation, exchanges, involving:producers, traders, marketing companies, retailers, equipment manufacturers, Industry Associations,

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Three examples to make the future look bright

1. Cylinder business: improvements in packaging 2. Domestic bulk: propane and solar3. Autogas: the European roadmap to success

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When the LP Gas cylinder came into our kitchens

In the fifties in Brazil, the LP Gas cylinder arrived in kitchens.Kitchens before and after as shown at the Ultragaz Museum of LP Gas in Sao Paulo

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Portugal: from steel to composite

Galp, like many European LP Gas Galp, like many European LP Gas marketing companies decided to marketing companies decided to roll out composite cylinders and roll out composite cylinders and promoted them with a strong promoted them with a strong advertising campaign…….advertising campaign…….

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Galp advertisement (Portugal)

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Ragasco: a leader in composite cylinders

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Primagaz: from steel to high-tech steel

Primagaz, one of the brand names of SHV Gas, the largest LP Gas marketing company in the world, opted for a light steel cylinder: made of a special “Dual Phase” steel.

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Primagaz: from steel to high-tech steel

The “Primalight” is the lightest cylinder on the market and it “sings”!• Light: resulting from joint research carried out by Primagaz, Liotard, a

cylinder manufacturer and Arcelor/Mittal, the steel maker. It weighs only 6.3 kg (13.9 lb.) and holds 10 kg (22 lb.) of butane.

• Clever: first a visual indicator activates when the level reaches 5 kg. Then it “sings” a jingle when the level reaches 2 kg.

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Three examples to make the future look bright

1. Cylinder business: improvements in packaging 2. Domestic bulk: propane and solar3. Autogas: the European roadmap to success

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Policy driving the growth of LP Gas?

Climate change, peak oil / expensive oil Climate change, peak oil / expensive oil are key issues of today’s worldare key issues of today’s world

People, corporations, communities, pressure groups, People, corporations, communities, pressure groups, governments react differently to these issues.governments react differently to these issues.

A consensus is building that the use of fossil fuels A consensus is building that the use of fossil fuels should decrease. should decrease.

What is the future for our old fossil, in this context?What is the future for our old fossil, in this context?

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Policy driving the growth of LP Gas?

The European example - The European example - The “2020” deadlineThe “2020” deadline

All the member states of the European Union signed and ratified the Kyoto Protocol, which All the member states of the European Union signed and ratified the Kyoto Protocol, which means they agreed on reducing Greenhouse Gases (GHG) emissionsmeans they agreed on reducing Greenhouse Gases (GHG) emissionsAs a result, EU energy policies and environment policies are now unified, including:As a result, EU energy policies and environment policies are now unified, including:

The obligation to produce more power from renewable energyThe obligation to produce more power from renewable energyIncentives to promote energy efficiency like Energy Saving CertificatesIncentives to promote energy efficiency like Energy Saving CertificatesNew norms for insulation of buildingNew norms for insulation of buildingLimitations on CO2 emissions of vehiclesLimitations on CO2 emissions of vehicles

How did the European LP Gas Industry react to this policy?How did the European LP Gas Industry react to this policy?

The domestic bulk and autogas The domestic bulk and autogas challenges challenges

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Domestic bulk: the new Primagaz offer in FranceThe European/French legal context:

– Reduction of GHG– Minimum quota for renewable energy – Diversification of electricity production– Insulation of buildings

– Energy Saving Certificates or “White Certificates”

The French context: Predominance of electricity (over 70% of new buildings are heated with electricity) led to a repositioning of propane: Primagaz becomes an energy consultant for their domestic customers:

– Identify improvements– Quantify energy savings– Quantify investments– Determine returns

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Domestic bulk: the new Primagaz offer in Austria

Primasol: propane plus solar energy

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Domestic bulk: the new Totalgaz offerThe “Eco-Déclic Solaire +” offer: a dual-fuel system, propane plus solar for central heating plus hot water with :

• Condensing boiler• Regulation/programming system• Thermal solar installation to produce hot water

The offer is a package with multiple advantages:• A commercial offer including a welcome bonus and price reduction • The assurance of decreased propane consumption• Tax incentives • Guaranteed contribution to reduction of GHG levels and impacts

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The European Union energy policy and autogas

The EU aims for a reduced energy consumption for transportation, and a The EU aims for a reduced energy consumption for transportation, and a corresponding reduction of COcorresponding reduction of CO22 emissions emissions

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Final energy consumption for transport in the EU in Mtoe

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The European Union energy policy and autogas

The European LP Gas Industry decided to promote autogas (LP Gas The European LP Gas Industry decided to promote autogas (LP Gas as engine fuel) as a means to meet CO2 reduction targets set by the as engine fuel) as a means to meet CO2 reduction targets set by the EU by increasing its usage as an automotive fuel from 5 to 27 Mtoe EU by increasing its usage as an automotive fuel from 5 to 27 Mtoe (million tonnes oil equivalent) per year between 2001 and 2030.(million tonnes oil equivalent) per year between 2001 and 2030.

Years

2001 2030

Forecast consumption of autogas in the EU in Mtoe

5 27

Corresponding share of autogas in transport fuels

1.31% 7.89%

Corresponding autogas share of LP Gas consumption

16% 38%

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Autogas / Electric Hybrid Vehicle

Made in Europe : the “autogas” Toyota Prius• 92 g/km of CO2 : 11% less than equivalent the petrol version

• expected to be below 90 g/km after further improvements

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Global Technology Conferences

LPG fueled by solid oxide fuel cellsCotton harvest preparation using thermal energy

Coriolis mass flow metering for the LPG IndustryIndustrial automation in Turkey

Peak shaving with SNG: a hedge against power interruptionsSmall size gas engines combined heat and power

Residential gas regenerated humidifier Poultry house sanitizer

Acoustic emission in the context of in-service inspection of LPG storage

Authorised filling technology to prevent theft

…and more : 41 subjects covered at our Chicago 2006 Conference!Many of those subjects have been presented at AFRED’s technology

conferences, and most of them are funded by PERC.Our next Global Technology Conference will take place on 24 – 26

September 2008 in Seoul, South Korea

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20th World LP Gas Forum

24th – 26th October 2007

Cape Town, South Africa

Don’t miss it!

And finally…And finally…

Thank you