NGV Growth in Portugal : Challenges & Opportunities Pedro Ricardo, Executive Director of GDP Distribuição

1. NGV Growth in Portugal : Challenges & Opportunities Pedro Ricardo, Executive Director of GDP Distribuição Henrique Santos, President of Natural Gas Vehicles Portuguese Association 9th Annual European NGV Conference & Exhibit & ENGVA Annual Meeting Porto, 13-15 May 2003

2. 12% FRANCE FRANÇA FRANÇA FERROL BILBAO GIJON LACQ BILBAO MARSELHA OVIEDO MARSELHA SANTANDER VIGO VITORIA BARCELONA PERPIGNAN SERRABLO LOGRONO PORTO TUY BURGOS CALAHORRA PALENCIA MONZON BRAGA MADRID OPERATING VALLADOLID ZARAGOZA BARCELONA PORTO IN PROJECT OR CONSTRUCTION SPAIN GNL GNL LISBOA SALAMANCA AVEIRO GUADALAJARA GNL COIMBRA CORDOBA MADRID CARTAGENA CASTELLON HUELVA LEIRIA ESPANHA ESPANHA VALENCIA LISBOA ALGERIA CAMPO MAIOR TUNISIA SETÚBAL ZAFRA CORDOBA MAROCCO HASSI R´MEL SEVILHA HUELVA CARTAGENA GNL GNL GNL GNL GNL TARIFA ARGEL GNL GNL GNL GNL TUNES TANGER ARGÉLIA ARGÉLIA TUNÍSIA TUNÍSIA EL ARICHA TAZA RABAT SONATRACH MARROCOS MARROCOS HASSI R´MEL MECHERIA Natural Gas Infra-structure 1993 2003 Concluded December 2003 • Three current sources of supply: • Algeria, through Maghreb pipe-line (~ 85% in 2002) • Nigeria, through Spanish terminal • Spot market Gas Supply

3. Natural Gas Key Indicators Primary Energy market share (%) Fastest European Build-up Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year The Netherlands Spain France UK Germany Beginning of activity (aprox.) 1947 1964 1970 1960 1966 1997

4. 1.174 402 1.427 26,6 1.350 1.097 735 242 492 46,6 1.180 950 334 122 219 22,2 488 436 2.243 Mm3 767 Mm3 2.138 Mm3 95,4 Mm3 3.018 Mm3 2.483 Mm3 Natural Gas Key Indicators Power Generation Transgás annual volume sold Large Industry LDC’s (Milions m3 NG) Forecast of the Concession agreement (rev.1994) +29% % Power Generation 28% 52% 67% 44% 52% 45% % Industry 49% 32% 23% 38% 33% 39% % LDC’s 23% 16% 10% 18% 15% 16%

5. Main Projects Sines LNG Terminal Underground Storage • Strategic reserve and upgrade of National transportation flexibility system; • Current situation: 400.000 m3 bleached (in the first two caverns); • First filling up scheduled to the beginning of 2004; • 4 caverns, with a geometric total of 1.37 Mm3 - about 160 Mm3 (n) of Natural Gas; • Injection Capacity: 110.000 m3 (n)/ hour; • Extraction Capacity: 300.000 m3 (n)/hour; • Total Investment: 95 M€. • Upgrade of LNG importation capacity, supply’s diversification, increase of National transportation flexibility system; • Current situation : 80% completed; • First ship in late 2003; • 5.2 bcm re-gasification annual capacity; two tanks of 125.000 m3 storage, handling capacity of 165.000 m3 LNG ships; • Total Investment: ~ 250 M€. Source: Galp Transgás

6. 5 units launched: Bragança, Chaves, Olhão, Évora and Vila Real Main Projects LNG satellite gasification units • Regional development (reduction of asymmetries) - Competitiveness - Job development in the gas sector and related businesses (contractors, retailers, etc.) - Improvement of the environment in inward cities • Light organisational structures and lower investments compared to those associated with pipe-line supply.

7. Natural Gas Vehicles Company Fleet of NGVs • Group Galpenergia • Carris • STCP • Urban transportation of Braga • Urban transportation of Aveiro • Natural Gas Vehicles Portuguese • Association • Portuguese Fiat Auto • 21 Fiat Multipla in operation • 20 bus in operation • (+20 planed) • 175 bus in operation • (+50 ordered) • 15 bus in operation • (+10 planed) • 3 bus in operation • 2 Fiat Multipla in operation • (+2 VW Golf Variant ordered) • 1 Fiat Multipla

8. First experiences In Lisbon, middle 1998, EXPO 98 took place, and it was considered an unique occasion to start pilot experiences with NGV buses. In fact the first unit, a Mercedes-Benz bus start then circulating between downtown Lisbon and 98 Expo facilities. During the second half of 1998 and 1999 year round other trials took place with other buses, namely: MAN,VOLVO, IVECO, RENAULT, in Lisbon and in Porto.

9. Actual Situation

10. To promote and support the expansion of NGV´s it was fund in November 2001 the Portuguese Natural Gas Vehicle Association (APVGN).

11. Taxis Trials In early 2002, in order to promote the usage of natural gas in taxis, a protocol was signed between APVGN and the Portuguese Inland Transport Dept (DGTT) a governmental agency which supervisions all transportation activities, including taxis companies activities. • This action was set up in order to increase public awareness of NGV´s in the taxi industry, in general, for owners to consider a fuel economy, and also a possible contribution to reduce harmful emissions. • Last but not least, it was taken this opportunity to launch new equipment in Portugal not currently used in present taxi´s fleet like: • -Printers for the invoicing • -New EC taxi roof light • -GPS location system • -Payment by credit cars

12. Taxis Trials

13. Results

14. Opinions • From taxi drivers • Their opinion was colleted from the questionnaires which were regularly sent to APVGN and also from the meetings which were held. • Their general opinion was: • -Enough horsepower and torque • -Very comfortable and driving position with over viewing the traffic • -Insufficient luggage capacity • -High distance to soil, solved with the addition of a step • From passengers

15. Opinions Noticeable less fuel smell ? Less noise if compared with a Diesel powered taxi ? Should this type of solution (NGV´s) be largelyimplemented ?

16. Opinions In general, we consider the experience very positive. We were very favourable impressed with the enthusiasm of owners, drivers and passengers and their interest in giving their opinion. The cars behaviour and performance were good. We have finished this trial and right now we are preparing another one this time with the new VOLKSWAGEM VARIANT bi-fuel. For this purpose, APVGN has ordered two units, which shall de in service very soon.

17. What´s next?  In cities where there are already filling stations any increment of the existing fleet depends of the policy of each transportation company, unless the Government launch ambient protection measures to be followed by the Municipalities and in this way an increase of the number of NG buses will occur. In what taxis are concerned APVGN has prepared a project for 200 taxis to operate in Lisbon and Porto. Several taxis operators showed their interest to take part in this project, providing that NGV´s and filling stations with capacity and convenient location are available, besides those that already exist for bus filling. This project was ordered by the Portuguese Inland Transport Dept, and it is presently under study by Government entities Lisbon and Porto Municipalities and by the Gas Company. We are confident that very soon we shall have public filling stations, initially for taxis and to be used at a later stage by private owners. We all hope, at APVGN, that these dreams come true , very shortly...