Natural Gas

Galp is positioned as an integrated supplier of natural gas and electricity in the Iberian market, whilst also operating in the international market through its trading activity.

Galp’s natural gas and electricity supply activities take place mainly in the Iberia market. We have been focusing in strengthening our combined offer, particularly in the Portuguese retail market, where we position ourselves as one of the leading suppliers. Galp also maintains an active presence in the international market for natural gas and liquefied natural gas through its trading activity.

Natural gas sales (mm³)

Sourcing

Galp actively manages its natural gas sources, and has been seeking alternatives and diversifying its sourcing options.

Sources of supply

The main sources of supply are based on long-term contracts, both with Algeria for natural gas, and with Nigeria for LNG, totaling 5.7 bcm per year.

In parallel, Galp sources natural gas from other markets, namely in Spain and France.

The remaining natural gas requirements are covered through spot market operations.

Sources of natural gas in 2017

As a rule, long-term natural gas purchase contracts define a minimum annual amount to be acquired and a margin of flexibility for each year.

These contracts usually establish a take-or-pay obligation, which obliges purchase of the agreed quantities of natural gas, regardless of whether the need occurs.

Purchase agreements of natural gas and LNG

Contracts Country Amount (mm³/year) Period (years) Start
NLNG I (LNG) Nigeria 420 20 2000
NLNG II (LNG) Nigeria 1,000 20 2003
NLNGIII (LNG) Nigeria 2,000 20 2006
Sonatrach (natural gas) Algeria 2,300 23 1997

Transportation

Galp imports natural gas destined for the Iberian market through:

  • Al Andalus pipeline (Spain) - Connects Tarifa to Cordoba.
  • Extremadura pipeline (Spain) - Córdoba to Campo Maior.
  • Sines - Sines LNG regasification terminal.

The international gas pipeline linking Portugal and Spain transports contracted natural gas from Sonatrach, in Algeria, which enters Spain through the Europe Maghreb Pipeline (EMPL) pipeline.

The Sines LNG regasification terminal receives LNG vessels purchased mainly from NLNG in Nigeria.

Galp's stakes in international pipelines

International pipelines Country Amount (bcm/year) % of Galp
EMPL Algeria, Morocco 12 23
Al-Andalus Spain 7.8 33
Extremadura Spain 6.1 49

 

Sales to direct clients

Galp's natural gas supply activity is mainly based on sales to clients in the industrial, electrical and retail segments in the Iberian market.

The Company is one of the most relevant natural gas suppliers in Iberia.

Natural gas sales to direct clients (mm³)

The natural gas supply activity has been progressively integrated with the marketing of electricity activity, especially in the retail segment.

Galp has been expanding its presence in the electricity market, particularly in Portugal, as an integrated energy supplier. At the end of the year, the G&P business had c.644 thousand clients.

In 2017, Galp started a digital and technological transformation project to ensure the continuous improvement of commercial operations, by implementing new platforms for communications with clients, and digital marketing.

Trading

Through its trading activity, Galp has guaranteed access to relevant international natural gas and LNG markets.

The company has been consolidating access to organised European natural gas markets (network trading), with a focus on Spain, France and the Netherlands.