Gasum Annual Report 2009

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in 2009 the sales price of natural gas went down during the first two quarters but began a slow rise in June. The prices of oil, coal and emissions allowances plummeted in the first half of 2009, making natural gas unable to compete with them during that period, despite its price falling from January to may. short-term trading and secondary market trading accounted for 3.4% of total natural gas sales. The market Court dismissed Gasum’s appeal concerning the decision made by the Energy market Authority (EmA) regarding the reasonability of Gasum’s pricing of natural gas under the supply obligation. Under the Natural Gas market Act, Gasum must supply natural gas at a reasonable rate while in a dominant market position. According to Gasum’s interpretation, the supply obligation applies to natural gas supplied under annual contracts, while the EmA interprets this to apply to all gas supply. Gasum was dissatisfied with the market Court’s decision and appealed to the supreme Administrative Court, where the case is still pending. in June Gasum extended its letter of intent signed with Turun seudun maakaasu ja Energiantuotanto Oy regarding the delivery of natural gas to the Turku economic zone, and the letter of intent was further extended at the turn of the year. sales of natural gas by Gasum Paikallisjakelu Oy totalled 40.2 million m3 in 2009, up 8.2% on the year before. Centre stated that the EiA fulfils the content requirements set for the EiA report. Gasum has applied for a redemption permit on the areas needed for pipeline construction. Gasum aims to begin pipeline construction in the early summer of 2010, whereby it would be operational in late autumn 2012. A new cooperation organisation, the European Network of Transmission system Operations for Gas (ENTsOG), was founded by European gas transmission companies in December 2009.The organisation has 31 members from 21 European countries, including Gasum.The creation of ENTsOG was connected with the third internal energy market package adopted by the European Union in summer 2009, with its regulations obliging transmission system operators to set up their own cooperation bodies for the gas and electricity markets. Gasum Paikallisjakelu Oy constructed a total of 24 km of new pipeline in 2009, so it now has a total of 500 km distribution pipelines in eight areas around the country. OTHER bUsiNEss ACTiviTiEs in february Gasum acquired a shareholding in biovakka suomi Oy.The two companies aim to construct biogas production facilities near the natural gas network. Gasum anticipates that biogas can be fed into its natural gas network in 2011 at the latest. Gasum began the construction of a new natural gas liquefaction plant and liquefied natural gas (LNG) storage facility in the kilpilahti industrial area in Porvoo. The current LNG facility is owned by Oy AGA Ab.Tanker lorry deliveries of LNG are made to customers outside the pipeline network catchment area. LNG can also be utilised as a reserve fuel during shortterm supply disruptions due to issues such as natural gas network repairs. The facility is expected to be ready for production use in summer 2010. investments in the facility totalled €9.9 million in 2009. in 2009 Gasum made tanker lorry deliveries of LNG produced by the current AGA Porvoo plant to finland and sweden for testing and research purposes.The volume totalled 5,296 tonnes. The use of natural gas as a transport fuel is an important developing market segment. During the year under review, natural gas filling stations were opened in Porvoo, Helsinki (Roihupelto), Lahti and Hyvinkää. sales for transport use were up around 18% on the year before. Gasum is investing strongly in the development of natural gas product and service provision via its subsidiaries. The 2009 development projects had a particular focus on the development of the heat business. Gasum Oy offers its customers products and services for natural gas price risk management. in 2009 hedging products were sold for a total of 3.5 TWh of gas, equalling almost 9% of the total volume of gas supplied in finland. 33 NETWORk OPERATiONs Gasum Oy owns the natural gas transmission network and is in charge of its use, maintenance and development. Gasum’s activities are supervised by the Energy market Authority (EmA), which has appointed Gasum as the national gas grid system operator. The EmA approves the terms and conditions imposed by Gasum to implement system responsibility. The EmA also supervises the reasonableness of Gasum’s transmission pricing. This is examined over periods of four years. Covering the years 2006 to 2009, the first period saw Gasum’s profit from network operations remain below the reasonable rate of return specified by the EmA, with a particularly low rate reported on the year 2008. The quality targets set for transmission activity were met in 2009.The amount of undelivered energy totalled 0.002% of the energy transmitted via the grid. The year under review saw the completion and launch of a new 42 km transmission pipeline between Hämeenlinna and Lempäälä, and repairs on the parallel pipeline dating back to the 1970s between Pajari and valkeala were completed. The Environmental impact Assessment (EiA) programme on the project to construct a new natural gas pipeline between mäntsälä and siuntio in Western Uusimaa was completed. in its statement issued in December, the Uusimaa Environmental

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