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

1. LP Gas: a bright future for an old fossil Marketing & technology issues Yvon Sellier Director Technology and Business Practices World LP Gas Association Railroad Commission of Texas, 2007 Propane Technology Forum Austin, Texas, Wednesday, September 12, 2007

2. LP Gas global - Today’s context • Abundant supply • High prices in absolute terms • Low prices relative to other hydrocarbons • Climate change, peak oil: threats or opportunities? Marketing & Technology issues

3. 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.

4. Apowerful Industry Association

5. The WLPGA – Our Mission • 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 To add value to the sector by driving premium demand for the product

6. WLPGA & Global Networking Industry Council GAIN: Global Autogas Industry Network GLOTEC: GLObal TEChnology network • Global Technology Conferences Networking, cross fertilisation, exchanges, involving: producers, traders, marketing companies, retailers, equipment manufacturers, Industry Associations,

7. Three examples to make the future look bright • Cylinder business: improvements in packaging • Domestic bulk: propane and solar • Autogas: the European roadmap to success

8. 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

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

10. Galp advertisement (Portugal)

11. Ragasco: a leader in composite cylinders

12. 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.

13. 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.

14. Three examples to make the future look bright • Cylinder business: improvements in packaging • Domestic bulk: propane and solar • Autogas: the European roadmap to success

15. Policy driving the growth of LP Gas? Climate change, peak oil / expensive oil are key issues of today’s world People, corporations, communities, pressure groups, governments react differently to these issues. A consensus is building that the use of fossil fuels should decrease. What is the future for our old fossil, in this context?

16. Policy driving the growth of LP Gas? The European example - The “2020” deadline All the member states of the European Union signed and ratified the Kyoto Protocol, which means they agreed on reducing Greenhouse Gases (GHG) emissions As a result, EU energy policies and environment policies are now unified, including: • The obligation to produce more power from renewable energy • Incentives to promote energy efficiency like Energy Saving Certificates • New norms for insulation of building • Limitations on CO2 emissions of vehicles How did the European LP Gas Industry react to this policy? The domestic bulk and autogas challenges

17. Domestic bulk: the new Primagaz offer in France The 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

18. Domestic bulk: the new Primagaz offer in Austria Primasol: propane plus solar energy

19. Domestic bulk: the new Totalgaz offer The “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

20. The European Union energy policy and autogas The EU aims for a reduced energy consumption for transportation, and a corresponding reduction of CO2 emissions

21. The European Union energy policy and autogas 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 EU by increasing its usage as an automotive fuel from 5 to 27 Mtoe (million tonnes oil equivalent) per year between 2001 and 2030.

22. 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

23. Global Technology Conferences LPG fueled by solid oxide fuel cells Cotton harvest preparation using thermal energy Coriolis mass flow metering for the LPG Industry Industrial automation in Turkey Peak shaving with SNG: a hedge against power interruptions Small 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

24. And finally… 20th World LP Gas Forum 24th – 26th October 2007 Cape Town, South Africa Don’t miss it!

25. Thank you