Vector Annual Report 2018

Business Unit Reports Gas Trading

GAS TRADING

Revenue for the Gas Trading business increased 3.0% to $290.3 million from $281.8 million a year earlier. This is on the back of higher field production at Kapuni up 11.9% to 9.4PJ, natural gas volumes at 18.3PJ, and higher Liquigas, LPG and Bottle Swap volumes. Gas Trading adjusted EBITDA fell 6.8% to $34.4 million from $36.9 million a year earlier. The prior year result included an insurance settlement of $5.3 million in relation to damage to the Liquigas facilities at Lyttelton during the 2012 earthquake. Excluding this one-off, underlying Gas Trading EBITDA was up 8.9% with strong volumes across most segments and higher production at the Kapuni Gas Treatment Plant being offset by lower natural gas sales margins, due to strong competition in the market. Vector’s LPG operations continue to occupy a strong market position. All segments of the LPG business saw increased volumes. The new Bottle Swap plant in Papakura is fully operational and is helping drive efficiencies and further growth in our Bottle Swap operations. Bottle Swap 9kg volumes were up 8.0% to 652,859 bottles from 604,391 a year earlier. LPG tolling volumes were up 8.6% to 183,540 tonnes from 169,046 tonnes a year earlier. Industry reaction to the Government’s ban on new offshore block offers for oil and gas suggests that the decision will have limited impact in the short to medium-term as this ban does not affect existing exploration licences. That said, the change is an important signal of the Government’s policy intentions for the longer-term. n

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