Statoil and Stadtwerke Düsseldorf conclude innovative gas-to-power contract

Statoil and Stadtwerke Düsseldorf have signed a 15-year arrangement for the supply of natural gas to Stadtwerke Düsseldorf’s upcoming 600-MW gas power plant (CCGT) in Lausward/Düsseldorf, Germany.
The power plant will become one of the most efficient plants worldwide due to heat production that will be used in the district heating system. Gas deliveries are planned to start in 2016.
The agreement builds on the liberalising gas, power and emissions markets and the available market price indices to enable risk and reward sharing between parties. It represents a new type of partnership in the German gas-to-power market.
The concept enables Stadtwerke Düsseldorf to run the plant in the most economical way, including steam production for district heating.
“This new partnership with Stadtwerke Düsseldorf is a stepping stone for Statoil’s strategy to promote gas in the power segment throughout Europe in general, but in Germany specifically,” says Rune Bjørnson, senior vice president responsible for Statoil’s Natural Gas business unit.
“Germany is a key market for us and we are very satisfied to establish a long-term partnership with a major utility like Stadtwerke Düsseldorf. It illustrates Statoil’s willingness to develop and enter into new commercial concepts in the gas-to-power segment. And – importantly for Statoil – this innovative deal creates value for our company,” he adds.
“Without highly efficient and flexible gas plants, the German Energiewende (energy transition) will not be successful. The agreement was possible despite very unfavourable regulatory framework for gas-to-power. Natural gas is the cleanest of all fossil fuels and can contribute to more than 50% CO2 emission reductions compared to coal,” Bjørnson says.
In December 2012 Stadtwerke Düsseldorf decided to invest into a new CCGT on its existing power plant facility in Lausward in order to produce power and district heat. “Securing gas supplies through this innovative agreement with Statoil, a major gas producer for Europe, is key to our energy production portfolio and gives a clear positive signal towards the gas-to-power market,” says Stadtwerke Düsseldorf chief executive officer Dr. Udo Brockmeier.
He pointed out: “The fact that a company such as Statoil shares our vision on the development of the energy market and the importance of gas-to-power projects in Germany confirms our way forward. This agreement materialises the partnership spirit between security of supply and security of demand with fully aligned interests on the long term; it is a perfect illustration of what gas market liberalisation brings in terms of innovation and value creation.”
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