Market & Supply 58

News

JET strengthens presence in north east

JET has increased its presence in north east England through new contracts with Penny Petroleum. Seven new sites have joined the network and a further three sites have signed retie deals. Owned by David Penny, Penny Petroleum has a portfolio of 25 retail sites, the majority of which are located in the north of England. David has operated three sites under the JET brand since 2009 and has now also moved seven recently acquired sites over to the brand. All ten JET-branded sites have a combined fuel volume of 30 million litres annually and are supplied by Phillips 66 from Teesside terminal. The sites are now in the new JET livery. David Penny commented: “I’ve worked with JET for five years now and have always found them really easy to deal with and very flexible in terms of meeting my needs as a business owner. The three sites that we already had with JET were performing very well, so when choosing a brand for the other sites, it was an easy decision to go with JET.” Carl Smaller, territory manager for JET, added: “North east England has been a core retail region for Phillips 66 for many decades so we are delighted to expand our network coverage in this region with these new site wins. David is clearly operating a very successful business model and we very much look forward to welcoming these sites into our dealer network and building this relationship further in the future.”

News

The £50 Energy Savings challenge

David Blevings, Ireland manager of OFTEC As Northern Ireland’s energy companies joined together to celebrate Energy Aware Week last week, OFTEC issued an “energy savings challenge” to householders that could help them save up to £50 per month on their energy bills. Energy Aware Week, which ran from 13th – 19th October, is a joint initiative by Northern Ireland energy companies to increase awareness of energy efficiency and provide homeowners with practical help and advice to make their money go further. As part of the campaign, OFTEC issued the following money-saving tips, challenging local householders to be more energy efficient and to help cut their energy bills by £50 per month:·      Turn your thermostat down – try and keep the room at 19°C. Increasing room temperature by only 1°C, can increase heating costs by 10%, whilst reducing temperature by 1°C can save almost £6 per month.·      Service your boiler – by servicing your boiler, you could improve your overall efficiency by 10%, saving up to £100 per year.·      Turning off standby – by properly switching off those appliances that often sit on standby at the mains, householders can make a saving of £4 per month -almost £50 a year.·      Swap to energy saving light bulbs – switching from regular to energy saving light bulbs can save £55 per year, almost £5 per month.·      Be water efficient – by taking a shower instead of a bath and you’ll use a lot less hot water, and with a water-efficient head to your shower, you could save about £75 a year on your energy bill, around £6 per month. Additional measures suggested by OFTEC that homeowners can take to ensure even greater long-term cost savings include:·      Consider switching to a condensing boiler – this change could reduce the annual oil bill by 18% – a cost saving of £21 per month and £259 per annum for a typical 3 bedroom house.·      Fit heating controls – simple control measures, including a 7 day programmer with room and cylinder thermostats and a motorised control, allows separate hot water and space heating. The installation of these controls could mean a reduction in the fuel bill of up to 30%.·      Insulate your home – cavity wall insulation can lead to a monthly saving of almost £10.·      Fit draught stripping across doors – eliminating small draught gaps can lead to a saving of around £100 a year, or £8 per month. David Blevings, Ireland manager of OFTEC commented: “Energy Aware Week is all about highlighting the ways that homeowners can become more energy smart. The week is a chance to inform homeowners on the small changes they can make to cut their energy bills, often at no cost. There are additional measures homeowners can also take which do require initial investment, but these can provide even greater savings in the long term.” Energy Aware Week is supported by a range of partners, including OFTEC, Phoenix Gas, Bryson Energy, Firmus Energy, Glow Worm, Grant Boilers, Power NI, SSE Airtricity, Valliant and Worcester.

Interview

A proud tanker driver

Alex Longman is a man with a real fiery passion for tanker driving, Fuel Oil News deputy editor, Liz Boardman went to Dragon Petroleum to meet him.

Insight

The case for a UK CSO agency

With the exception of Italy and partially Sweden, the UK is almost unique among EU members in operating a compulsory oil stock holding system in which responsibility for compliance and management of the country’s Compulsory Stock Obligation (CSO) rests entirely with participants in the oil market – refiners/ex refiners and importers/wholesalers.

News

Cheaper heating bills for oil households

Latest figures show that oil continues to be the only primary heating fuel to have fallen in price over the past three years, making it the cheapest option for off gas grid homes. According to the Sutherland Tables, a recognised source of data on comparative UK domestic heating prices, the current annual cost of using oil to heat a three bedroom home in Great Britain is now 10.1% lower than the average cost reported over the last three years. The same average figures for homes using electricity and LPG – the other main heating fuels used by off gas grid homes – show an increase in heating costs of 23.9% and 2.2% respectively with LPG, used by some 170,000 off mains gas properties, remaining substantially more expensive than oil. The cost of heating a three bedroom home with a condensing boiler on LPG is £1,924 per annum – £734 more expensive than oil at £1,190 per annum. According to a new report from DECC published last month, the downward trend in oil prices is set to continue over the next two years with wholesale prices forecast to fall 11.9% by 2016. In contrast, gas prices are predicted to rise by 14.5% over the same period. Jeremy Hawksley, director general of OFTEC, said: “This is further positive news for oil households which have continued to benefit from relatively consistent heating costs over the past three years.”

News

Total – committed to better energy

Total launched its new international multimedia advertising campaign simultaneously in 21 countries at the beginning of October. The campaign highlights Total’s operations in oil production, refining and marketing, as well as its role as a major player in natural gas – 50% of its output – and as the global number two in solar power, through its subsidiary SunPower. “This large-scale campaign is the first of its kind in Total’s history. It reflects both our size and our ambitions,” explains Jacques-Emmanuel Saulnier, Total’s senior vice president, corporate communications. Philippe Guys, managing director, Total Exploration and Production UK, commented: “Total is a leading global energy company. It needs a powerful brand over the long term to support the growth of its businesses. Our commitment is to continuously improve, working with and for our stakeholders. This isn’t just a promise, it is an everyday reality for Total’s 100,000 employees.” The “Committed to Better Energy” campaign includes a television commercial filmed at Total sites around the world that will appear on nearly 80 different channels. In addition, more than 230 publications will carry advertisements featuring Total employees. Displays will be visible in 15 international airports, on the web and on social networks. In all, the campaign is targeted to reach a potential audience of more than 450 million people.

News

Geneva hosts first Oil Trading Risks summit

Conference organiser, International Research Networks (IRN) is holding its inaugural Oil Trading Risks Summit in Geneva on October 22/23. “With oil being such a volatile, political and essential commodity, managing the risks related to its trading has become a very important part of the oil trading companies’ strategy to maintain their profits,” says IRN. “This high level meeting will gather heads of trading, risk managers, and financial managers from oil trading companies, refineries as well as transportation companies, including aviation.” Topics to be discussed by high-profile speakers from such companies as Repsol, Cargill, Turkish Airlines, Irving Oil and Oryx Energies, will include market risk, credit risk, regulatory risk, political risk and financial risk. More information is available about the summit at: www.oiltradingrisks.com

News

Gulf Aviation – a breath of Fresh Air

Gulf Aviation has added private jet and helicopter provider, Fresh Air, to its portfolio of aviation contracts. Gulf – the aviation brand of national fuel and lubricant supplier Certas Energy – will offer refuelling support to Fresh Air which specialises in providing helicopter and jet charter services at a variety of high profile festivals, sports tournaments and corporate events. Gulf Aviation, which has been supplying the UK aviation market for more than five years, is headed up by Alex Murphy. Commenting on the contract win, he said: “Since Gulf Aviation’s inception in 2009, the company has been servicing smaller private and business airfields and flying clubs, as well as regional airports and supplying fuel direct to airlines. “This latest contract with Fresh Air is a significant win for us, extending our work with specialist aviation services and enabling us to showcase the benefits of working with a supplier with extensive experience of the aviation industry.” www.gulfaviation.co.uk 

News

Big names at Essar’s literature festival

Adventurer Ranulph Fiennes, former Sex Pistol John Lydon, politician Paddy Ashdown and actress and writer Sheila Hancock are some of the big names appearing in the Essar Chester Literature Festival 2014 line up. Running from Friday, October 10th to Sunday, October 26th, this will be the third consecutive year that Essar Oil (UK) has sponsored the festival. Chester Performs has a programme of more than 40 events for this year’s festival. Paul Lavin, festival manager, said: “This is another programme that we believe offers something to suit all tastes. The festival has a really good audience and we look forward to welcoming them back for another year.” Ian Cotton, head of communications and community for Essar Oil (UK) Ltd, said: “We are delighted to be sponsoring the festival once again. It’s a highlight not only in the Chester arts calendar but across our entire region. This year’s line-up offers something for everyone and we’re looking forward to seeing our local communities getting involved.” The festival programme and ticket booking information is available online at: www.chesterliteraturefestival.co.uk

News

Simon provides specialist storage and water separation services

Specialist water separation services from Simon Storage Simon Storage has successfully provided specialist storage and water separation services at its Immingham East Terminal on behalf of Hydrodec (UK) Ltd. The contract with Hydrodec, which trades as the OSS Group in the UK, involved around 11,000 tonnes of saline water containing oil residues from shipping operations. Having already undergone an initial oil skimming process, the product was re-sampled by Simon on arrival at the terminal to ensure it satisfied the adequate specification for water separation and disposal via Simon’s on-site water treatment facilities. Received by sea into the terminal, the “ship slops” were stored in a number of specially configured tanks totalling nearly 20,000m3. After a settling period to allow for natural in-tank separation of oil and water, the water was drawn off for disposal through Simon’s water treatment facilities. Oil residues left in the tank were collected by OSS, using vacuum tankers, for recycling at its Stourport-on-Severn processing plant. Simon’s Immingham East Terminal is permitted to carry out water separation activities and recovery of separated hazardous and non-hazardous waste products from industry and commerce. Simon’s investment in its own water treatment plant at the terminal provides the capability for disposal of separated waste water derived from a wide range of permitted EWC (European Waste Catalogue) codes. In the face of finite global oil supplies, the market for collecting and recycling waste oil from sources such as the maritime and automotive industries is growing, explains Rachel Lewin, marketing executive at Simon Storage. “This rapidly developing market is increasing requirements for suitable storage, treatment and disposal in the UK and mainland Europe,” she says. “With a long history of handling bulk liquid wastes under permit and its own water separation facilities at Immingham, Simon has achieved significant business success in this demanding sector and is ideally placed to maximise emerging opportunities.” www.SimonStorage.com

News

Greenergy becomes national fuel supplier to Esso dealerships

Greenergy now supplies Esso dealerships nationally Greenergy has begun supplying Esso fuel to Esso branded independent dealerships in the Midlands, the South of England and South Wales. Greenergy has been a branded wholesaler for Esso since February 2013 when it took over fuel supply to Esso branded dealerships in the north of England, north Wales and Scotland.  The agreement now extends nationally with Greenergy taking over supply to a further 104 Esso branded dealerships. Greenergy also has rights to market the Esso brand to independent forecourts nationally, offering Esso-branded fuel alongside its other brand options.  Both the number of Esso branded sites supplied by Greenergy and their sales volume have grown strongly under the branded wholesaler arrangement. Andrew Owens, Greenergy chief executive said: “There has been considerable interest from dealers looking for a major oil brand and loyalty scheme with Greenergy’s flexible terms, competitive pricing, supply reliability and customer responsiveness.  This is a unique combination, making it one of the strongest fuel offerings in the UK.” Duncan Connolly, retail director of Esso Petroleum Company Limited commented: “Greenergy already supplies high quality Esso fuels to independent dealers in the northern half of the country and has attracted 25 additional independent dealer sites to switch to the Esso brand.” Meanwhile, Shailesh Parekh of Midland Link service station, for whom fuel supply has now transferred to Greenergy, said: “I’m excited that Greenergy is now my supplier of Esso fuel. I’ve heard great things about their flexibility, efficiency and hands-on approach to customer service.”

News

Will YOUR customers “buy oil early” for winter?

Heating oil consumers across the UK are being urged to change their energy habits and order heating oil early before the winter weather arrives. The FPS (Federation of Petroleum Suppliers) has joined forces with the government and consumer bodies ACRE (Action with Communities in Rural England), Citizens Advice Bureau and Consumer Futures, to launch its “buy oil early” campaign – a move which has the support of energy minister, Matt Hancock, who commented: “The nights are drawing in and winter is just around the corner, so we are encouraging people to stock up on oil sooner not later. “It’s better to order early when demand is low and prices are low and to make sure no household is caught out, especially in remote and rural areas where roads can be disrupted and delivery times only increase as the weather gets worse.” Chief executive of the FPS, Mark Askew, comments: “We have launched a ‘buy oil early’ campaign now in association with the government and consumer agencies and we hope people will heed our combined advice. We are urging people not to leave it to the last minute when the bad weather has taken hold and tanker drivers struggle to get through on roads covered in snow or ice. In addition, compared to how much it cost the 1.5 million off-grid energy users to heat their homes using oil last year, it’s now a lot cheaper – which is obviously great news for households who use oil.” The FPS is advising customers to set up a regularly monthly payment with their local oil supplier in order to offset higher bills during the winter months. “In an economic climate where energy prices are in the news daily, we are trying to educate consumers on ordering early and therefore pay less and manage their fuel budget better throughout the year,” adds Mark Askew. The FPS has also posted a list of money-saving tips and advice on managing energy needs on their website www.oilsave.org.uk

News

Oil Care Campaign prepares to celebrate 20 years

The Oil Care Campaign will be celebrating its 20th anniversary at its conference and exhibition on 4th June 2015 at the National Motorcycle Museum near Birmingham. The campaign was set up by the Environment Agency in association with the Scottish Environment Protection Agency (SEPA) and the Northern Ireland Environment Agency (NIEA), to reduce oil pollution by providing guidance on the safe disposal and management of oil. A network of oil banks which accept used engine oil for recycling has been established in England, Wales, Scotland and Northern Ireland. Organisers of next June’s event are offering the opportunity to support the campaign for £250. This will include a table in the exhibition room and entry for two people to the conference itself. Since it was launched in 1995, the Oil Care Campaign has helped reduce oil pollution incidents across England and Wales from nearly 7,000 a year to under 2,600 in 2013. In the 12 months to April 2014 more than 37,500 people used the oil bank website to find the location of their nearest oil recycling facility. Event and exhibition booking information is available from Oil Care Campaign manager, Liz Hobday at: liz.hobday@environment-agency.gov.uk

News

Suttons Group acquires bulk chemical transport company

Suttons Group has acquired Imperial Tankers, one of the largest bulk chemical transport companies in the UK, from Hargreaves Services PLC. Terms of the transaction have not been disclosed. Established in 1989, Imperial Tankers has a road tanker fleet of over 200 tractor units and 350 tanker semi-trailers and provides both fully-managed logistics solutions and single spot product movements to deliver a wide range of hazardous and non-hazardous chemicals and other sensitive products. John Sutton, Suttons Group CEO, said: “This transaction is an ideal fit for Suttons and will enable us to continue to deliver high levels of safety and service, improve efficiency and add value through supply chain resilience and innovation. Our joint depot network will enhance our ability to provide an outstanding service to customers in key production regions around the country. “Our combined fleet of over 700 road tankers gives us an even greater ability to support our customers through times of peak demand and react rapidly to changing customer requirements.” This is Suttons’ third acquisition in the last 12 months. In October 2013 the company completed the purchase of Chinese transport company Hanchi Logistics, and in August 2014 the company acquired IS Logistics Group, a logistics and supply chain specialist based in Singapore. The acquisition of Imperial Tankers reflects Suttons’ commitment to growth in the bulk logistics and supply chain sector.

News

Scotland’s big event…

A major event, potentially affecting tens of thousands of people and some of the biggest employers in the country, happens in Scotland this week. Yes, you guessed it – The Scottish Energy Careers Festival 2014! On Wednesday, September 17th – just 24 hours before that other Scottish event – at Glasgow’s newest conference and event venue, 200 St. Vincent Street, some of the most influential employers in Scotland’s flourishing oil and gas sectors will be meeting ambitious professionals with skills and qualifications that are in high demand in the country’s energy sector. Although direct employment with some of the big names in Scottish energy, may be relatively small, the number of jobs which depend on the sector is huge. David East, communications manager for the INEOS facility at Grangemouth, says that around 1400 people are directly employed at the site, plus contractors employed by third party companies. However, “Scottish Key Facts”, released by Scottish Enterprise in May this year, estimated that more than 13,500 jobs were directly associated with the country’s chemicals industry with another 70,000 people whose jobs depended on the sector. The Scottish Energy Careers Festival, organised by s1jobs, takes place on Wednesday 17th September between 11am and 8pm at 200 St. Vincent Street, Glasgow. www.s1jobs.com/newsandguides/the-scottish-energy-careers-festival-2014.html

News

New fleet investment by Hoyer Petrolog

Hoyer Petrolog UK has completed taking delivery of 253 new trucks in the UK and Ireland as part of a significant upgrade to its petroleum, bitumen and fuel oils fleets.

News

Top rating for 50th ECO Stars member, Greenergy Flexigrid

The Thurrock ECO Stars fleet recognition scheme is celebrating its 50th member with the sign up of Greenergy Flexigrid, who has been awarded a top rating of five stars. The ECO Stars (Efficient and Cleaner Operations) scheme was first launched by Travel Thurrock in April 2012 to encourage fleet operators to improve efficiency, reduce fuel consumption and emissions – all to help improve local air quality. Since then more than 2000 vehicles have been signed up to the scheme with each member receiving a star rating for their fleet. Greenergy is the UK’s largest supplier of road fuel and third largest private company in UK, supplying over a quarter of all road fuel sold. Flexigrid is Greenergy’s in-house haulage fleet with 101 trucks nationally and 15 driver depots throughout the UK, the largest of which is based in Thurrock. Ross Monkhouse, fleet asset manager for Greenergy Flexigrid, said: “We are proud to have been awarded five stars – the highest ranking – under the Eco Stars recognition scheme for our commitment to maximising fuel efficiency and reducing carbon emissions through the introduction of new trucks and technology to monitor fuel usage.” Thurrock is part of the Thames Gateway national growth area with the potential for increased traffic growth and C02 emissions from freight transport. For this reason Travel Thurrock adopted sustainable freight as a core element of its Local Sustainable Transport Fund (LSTF) programme. Cllr Andy Smith, responsible for Thurrock Council’s regeneration, highways and transportation, said:  “We are delighted to reach this milestone in a little under three years. Our roadmap to improve transport performance and reduce costs and carbon emissions is providing a better environment for our community.” ECO Stars was originally set up in 2009 in South Yorkshire and has since expanded to run in York, Edinburgh, Falkirk, Mid Devon, Nottinghamshire, Dundee, North Lanarkshire, Warrington, Sefton, Thurrock, Fife and South Lanarkshire. There are also further schemes in Europe as part of an EU project. www.thurrockfqp.com

News

Valero fuels another season of RNLI lifesaving

Members of the Tenby lifeboat crew thank Valero for its life-saving gift RNLI volunteers in Angle and Tenby have thanked Valero Pembroke Refinery, following another vital donation of fuel oil during the busy summer season. Valero’s annual donation has been a regular gift since 2005. Figures recently released by the RNLI in support of a major drowning awareness campaign – “Respect the Water” – revealed that 65 lives were saved by Wales’s RNLI lifeboat crews and lifeguards during 2013. Last year, RNLI lifeboats from Tenby launched 72 times and rescued 47 people, whilst Angle lifeboats launched 40 times and rescued 48 people. Lewis Creese, RNLI coxswain at Angle RNLI Lifeboat Station said: “Fuel is one of the RNLI charity’s greatest costs and naturally we see an increase in consumption during the summer months. During this time our volunteer crews are busier than ever saving lives at sea. The figures show the number of lives saved across Welsh coast, but without fuel we wouldn’t have been able to get to these people and bring them to safety – it’s a vital ingredient in what we do. “The RNLI is also very grateful to K P Thomas fuel distribution for collecting the free fuel and delivering to both Tenby and Angle without charge.” Valero public affairs manager, Stephen Thornton, commented: “Valero Pembroke Refinery has been proud to support the RNLI with donations of fuel since 2005. Safety is Valero’s number one priority, and whilst in Pembrokeshire we are very fortunate to be able to enjoy such a stunning coastline, we rely on the RNLI to help keep us and our families safe at sea. Providing free fuel is Valero’s way of paying tribute to the RNLI’s brave volunteers who keep people living, working and visiting Pembrokeshire safe all year round.”

News

Managing every last drop of fuel

Back in September 2011, Fuel Oil News editor Jane Hughes visited Heathrow Airport to learn more about the airside fuel operation at Airport Energy. In May, a return visit was made to learn about a new telematics system developed by AE Telematics “We’ve had a very good couple of years,” said executive chairman Phil Wright. “The reconstruction of Terminal 2 (opened last month), certainly gave an excellent boost to fuel sales.” Airport Energy fuels over 7000 vehicles and pieces of equipment that are essential to the smooth running of the airport. Fuel is not the only commodity that this company supplies. “With fuel being the biggest cost in running any vehicle or piece of equipment, everyone’s desperate for data to help them better manage both costs and fleets more effectively,” explained Phil. “With today’s technology just about anything can be measured and we can now provide our customers with a complete fuel management solution to include a fuel, servicing and tracking record.” Adding telematics The company has recently added a third tier to its well-tried and tested automated vehicle recognition system (AVR) fuel management system offering. Already benefiting from complete control and security over fuel usage and more effective fleet management, the company’s customers can now access fleet telematics. “Back in 2000, Heathrow’s suppliers had surprisingly little knowledge or control of fuel usage and costs. The introduction of a fuel management system was a revelation to many with each additional piece of information introduced since being very well received,” explained Phil. “We trialed our new telematics system with our 11 drivers and also with British Airways, with endless insights into individual vehicle and driver performance, it was found to be a no brainer. Using telematics shows where driver training can save money. “The technology being used stems from Formula 1 racing where the fine tuning of a vehicle coupled with the performance of the driver is paramount to its success,” said technical engineer Ian Breckon when explaining the telematics system. “Our aim is for customers not to waste a single drop of fuel. We want to maximise vehicle utilisation around the airport; by April 2015 every vehicle will have a tracker enabling every movement/incident to be tracked via a sensor. Dependant on the detail required, standard or customised reporting is available. This covers items such as fuel usage, speed, harsh braking and turning, CO2 and NoX emissions – as environmental legislation steps up a gear, NoX emissions from transport are becoming the focus of attention. “We don’t want to bombard the user with endless data so it’s possible to select and condense information into focused reports,” said Ian. “From information received users can then make informed decisions relating to relative cost effectiveness as vehicles and equipment age, using it to compare the performance of different makes/models. “Warnings about excess speed can be set up; if the speed limit is exceeded an email or sms can be sent within 20 seconds. The aim of this data is to educate and improve the bottom line, not to punish. If desired, a reward system can be set up for drivers/operators. “The integration of fuel usage data from our fully automated refueling system together with vehicle tracking data provides a unique total vehicle and fleet package in one place, giving complete control with easy access to all the data,” added Ian. Airport accolade Heathrow Airport has 1,500 suppliers; Airport Energy is now a top 55 strategic supplier. “High standards are demanded by the airport authority so this is a real accolade,” said Phil. “From our origins as a specialised fuel supplier we’ve developed the business to provide a total fuel and vehicle management package. As a strategic supplier the company participates in quarterly meetings with the airside director responsible for procurement. The meetings review the supplier’s contract performance, innovation, KPIs and successes. Branching out Having had considerable success with its fuel management system in the airport arena, the company took a stand at this year’s CV Show, to raise awareness of the system with a wider audience. “It was good to dip our toe in the water at such a big show,” said Phil. “Because everyone wants to measure business performance, telematics is definitely flavour of the month and we had a lot of interest.” Not standing still Heathrow, the UK’s only hub airport, sees 70% of the UK’s air traffic activity. At the time of visiting, plans for the airport’s further development had just been published. Whilst there will be continued development of terminals there is currently less construction activity. “Heathrow is in desperate need of a third runway,” said Phil. “But, this is a political football at the moment, and only time will tell if this is ever going to happen. “Whilst Airport Energy will continue its long term contractual arrangements with the airport, there will be many challenges in the meantime, Phil said. “It’s essential to continually look at new areas, you cannot simply stand still.” On 2nd August 2015, Phil will celebrate 50 years in the fuel industry, it is very clear that time has not dimmed his enthusiasm for the industry.  

News

Risk reduction for domestic customers

In mid May, Craggs Energy rolled out Oil Price Protect which offers a new way for domestic customers to buy their kerosene The idea was initially sparked by conversations with customers worried about rising oil prices and hefty winter fuel bills. “Top of the customers’ wish list was cheaper kerosene, next was being able to avoid the unknown when it came to winter fuel bills,” said managing director Chris Bingham. “Whilst we couldn’t affect a change to the former due to the many variables that control the price of oil, we felt we were in a position to do something about the latter. Having assisted commercial customers with their annual fuel needs via hedging, we looked at a version to suit our domestic customers.” Having a technology background, enabled Chris to build an online platform and start testing Oil Price Protect in selected areas in April last year. Checking with the FPS to ensure that the scheme met the criteria for the Code of Practice, over the last six months the scheme has been ‘tested to death’ reports Chris. To get an Oil Price Protect quote, a customer simply enters their postcode, email address and yearly kerosene consumption. An annual fixed price is then sent to the customer within 5-6 minutes. Prices do vary slightly across the UK given distances. There are payment options and customers paying the annual cost upfront receive a discount. Fuel is then delivered as and when required throughout the year. Trials, feedback and going live “Before going live we wanted to be sure that the back end system could cope. The trial also gave us the opportunity to get valuable feedback which in turn helped us refine the offering now launched. To date 95% of those who took part in the trial have signed up to continue buying their kerosene through Oil Price Protect,” said Chris. “Prior to Oil Price Protect, like most other distributors, we did offer different ways to pay including direct debit. Customers told us that in common with other utility bills, they were alarmed when direct debits suddenly shot up. Our customers wanted more control – a pensioner on a fixed income feels more secure knowing exactly what they have to pay as does a family on a tight budget. People don’t get excited by the oil price falling but they do get scared when the price keeps rising. A fixed price may be slightly more expensive but it is good value if you want or need price protection.” Following the trial, all Craggs Energy’s domestic customers have received a letter explaining the benefits of Oil Price Protect. Picked up by the national media, Chris has recently spoken about the scheme on local radio stations in Yorkshire, Lancashire, Scotland and Cambridgeshire. Extending Oil Price Protect Not only are Craggs Energy’s own domestic customers able to gain peace of mind, so are those of its partner distributors nationwide. “It’s still very early days but we’re encouraged by the response. Yes, it’s more expensive than today’s spot price but the reality is that no one can really get cheap fuel in the winter; but fixing the price does give customers peace of mind. Although we expect the scheme to be relatively low key this year, we’re looking for more mutually beneficial partnerships to spread the scheme. “We do get asked about what happens if the price falls; the answer to that is don’t fix your price. But if a domestic customer is worried about the oil price rising, it makes sense to fix the price for 12 months in advance. There’s no more shopping around, fixed payments can be spread throughout the year and if the price did go up in winter, they’re protected,” added Chris.

Insight

Gas grid and storage facilities in the UK

The start up of gas production in 1967 from the Leman field in the North Sea heralded a very substantial and ambitious infrastructure project, spanning the 1970s and early 1980s. The construction of a national grid was designed to bring this newly discovered resource to the major markets and points of consumption around the country, where previously distribution of locally manufactured gas was limited to networks in the main conurbations. The completed network, known as the National Transmission System (NTS) and owned by National Grid plc, makes gas available today to approximately 11 million domestic, commercial and industrial users, including 40 power stations and comprises approximately 4,200 miles of pipelines and 24 compressor stations. Gas enters the system through seven import points and intermediate storage around the network is provided at eight inland locations. Gas to end users is supplied through the Local Transmission System, comprising eight distribution networks and circa 170,000 miles of pipelines. The above infrastructure supports the largest gas market in Europe at just under 80 billion M3 in 2012 (70 million tonnes of oil equivalent) – down from a peak of 97 billion M3 in 2004 and the country’s second largest primary energy source, at 35% (versus 38% for oil). Its two principal sources of usage are in power generation, accounting for 34%, and in domestic/residential heating at 33%. Gas accounts for about 40% of the fuel used in power generation and 80% of that used for residential heating. The National Transmission System The seven gas import points for the NTS points are at St Fergus, Teesside, Easington, Theddlethorpe, Bacton, Burton Point and Barrow. Three of these facilities – St Fergus, Easington (including Rough) and Bacton – process about 80% of the gas entering the country. The next key link is the network of eight operational storage sites that act as buffers around the system and which fall in to three broad categories:- Long range – primarily to accommodate seasonal demand swings Medium range – which have shorter injection/withdrawal times to respond more quickly to short term demand and/or price changes Short range – to enable rapid/instantaneous delivery of gas in to the system The storage facilities themselves fall into two main types – depleted oil/gas fields and salt caverns. Recent developments in the current millennium have necessitated material new additions to the storage network in the form of LNG facilities. Recent developments A landmark was reached in 2004, since when the country has not been able to satisfy indigenous gas demand from the UK Continental Shelf (UKCS) in the North Sea, with production there having declined by almost 60%. Consequently reliance on imported sources has had to increase, with UKCS supplies now only covering circa 45% of national requirements. Imports are sourced from three principal supply points – the Norwegian sector of the North Sea (just over 40%), as LNG (circa 40% of which 90%+ is from Qatar) and the Netherlands Groningen field (circa 15%) via the interconnector in to Bacton; small quantities ( around 5% ) are sourced from Belgium. So LNG imports now service just under a quarter of the country’s gas requirements and to accommodate this new source three substantial new storage complexes have been commissioned since 2005. These are:-