BUSINESS UNITS: Gas Trading
GAS TRADING
Revenue for the Gas Trading division increased 1.7% to $281.8 million from $277.1 million a year earlier. This is on the back of higher natural gas volumes, up 6.6% to 17.8PJ from 16.7PJ in the prior year. Volumes from the Kapuni field, however, continued to decline, down 23% to 8.4PJ.
Despite an increase in volumes, our natural gas operations were impacted by lower margins as a result of strong competition in the market and by lower production and processing fees at the Kapuni Gas Treatment Plant. Vector’s LPG operations continue to occupy a strong market position. Bottle Swap nine kilogram volumes were up 9.9% to 604,391 bottles from 549,998 a year earlier. The new bottling facility in South Auckland is expected to be operational for our summer peak this year and will help drive efficiencies and enable further growth in our Bottle Swap operations. LPG tolling volumes were down 2.1% to 169,046 tonnes from 172,695 tonnes a year earlier, driven by lower export volumes as lower international prices for LPG made exports less attractive. Gas Trading adjusted EBITDA fell 9.1% to $36.9 million from $40.6 million a year earlier. This result includes a one-off insurance settlement of $5.3 million in relation to damage to the Liquigas facilities at Lyttelton in the 2012 earthquake. As previously disclosed, Vector received an arbitral award in its favour regarding the price and terms for the next tranche of Kapuni gas which we have been taking since 2013. On 31 May 2017, Vector announced that the High Court had denied Todd and Shell a right to appeal this judgment. They have now applied to have aspects of the High Court’s judgment recalled and, alternatively, sought leave to appeal this decision to the Court of Appeal. We will oppose this application. During the year, Shell and Todd agreed a transaction that saw Todd assume 100% ownership and operation of the Kapuni field on 1 August 2017.
Dan Molloy BSc CHIEF FINANCIAL OFFICER
Adjust
Growth for Vector is about striking the right balance between delivering what’s expected from our regulated assets and exploring unregulated adjacent opportunities.
—
48
Vector://AR 17
Made with FlippingBook Annual report