Uncategorized

The 60 participants in the Wisdom Small and Mid-Scale LNG Conference in Amsterdam agreed on one thing: The demand for Liquefied Natural Gas (LNG) will grow enormously over the next 15-20 years. Royal Dutch Shell had concrete forecasts for this: in 2035, the world could deliver 600 million tons of transportable liquefied gas per year, more than twice as much as in 2017, according to Shell’s LNG Outlook for 2018, which was introduced by Shell’s Senior Advisor Gas Strategy Wouter Koopman.

From 2020 onwards, Shell expects a growing deficit in LNG: Although the gas market grows only one percent per year, the role of LNG as a resource for power plants or for the propulsion of ships is steadily increasing. “Gas is an easy subsitute to coal if we want to contribute to climate goals,” says Koopman. The additional volumes of liquefied petroleum gas, which manufacturers from Russia, the US and soon also from Canada on the market rinse, will not be able to keep pace with the growing demand, according to the expert.

Florian Willershausen, Director Business Development, Marketing and Communications, participated in the strategy panel for Creon Capital. He pointed out that the infrastructure was not adequate for refueling ships and trucks – and banks are still struggling to finance such projects. “We have to design this infrastructure with the help of modern instruments for project financing and involving private equity partners,” says Willershausen. The aim is to develop the entire value chain from the producer through the logistics to the end user. The Creon Energy Fund, managed by Creon Capital, is dedicated to this task.

For more information please contact:
Leila Nettaf
Creon Capital
T. +352 26 49 79 2203
E. nettaf@creoncapital.lu

As much as some may be surprised in the West: ecology and Russia – this combination is no longer a contradiction today. Not only since the Year of the Environment took place in 2017, the world’s largest country moves slowly but visibly in the right direction in terms of environmental issues: The burning of associated gas in the oil production is decreasing, landfills have been closed, recycling is being promoted by the state actively. Above all Russian oil and gas companies have to offer something, which could boost the EU-countries leap towards a cleaner economy structure: Liquefied Natural Gas (LNG) as a fuel for decentral regions and the transportation sector.

Ecology and Russia – this combination also becomes relevant for companies. Therefore, CREON Group invites to the second Berlin Conference this year. Businessmen and experts from both Russia and Germany will discuss how environmental responsibility can be shaped and improved further. Which solutions can German companies provide for Russian partners who want to tackle the topic? And conversely, can Russian companies contribute to a “greener Europe” by delivering Liquefied Natural Gas (LNG)? These discussions will be supported by the German Eastern Business Association (OAOEV) and the German-Russian Chamber of Commerce (AHK).

During the conference we will present the results of our environmental responsibility rating in Russia’s oil and gas industry. For the fifth time, WWF Russia and CREON conduct the independent rating of major oil and gas companies regarding their efforts and transparency in terms of environmental responsibility: Who renatures oil-contaminated areas? Who is flaring on associated gas, who is not? How transparent are corporations in reporting on ecological issues? In the meantime, the rating has been established as a credible, objective and recognized tool to push the oil and gas companies towards on a more sustainable course. The initiative to conduct Global rating of the 32 biggest world oil and gas companies will be also presented in Berlin.

The aim of the conference is to promote ecological responsibility as a common topic for Germans and Russians. Therefore, we are pleased to welcome high-ranking politicians from both countries, who find common interests in the field of ecology beyond the well-known political dispute topics. Above all, however, entrepreneurs from East and West should be brought together: In Europe’s East, a market is now growing with its awareness of the problem, for which Germany particularly could supply “green” technologies. CREON has set itself the goal of connecting these networks.

Venue and Timing

Wednesday, December 05^th 2018

Time: 13.00 – 19.00

Hotel Marriott, Berlin (Potsdamer Platz), Inge-Beisheim-Platz 1, 10785 Berlin

DOWNLOAD the program here

MORE INFORMATION you may find on our website.

Despite sanctions imposed by US-authorities on Russia, construction of large infrastructure projects continues. Recently Novatek opened the second of four production trains on Yamal peninsula, freezing natural gas down to 164 degrees below Celsius to get it transportable. Next year the capacity of 17,4 million metric tons of liquefied natural gas (LNG) will be reached, but even before this the new Russian energy giant Novatek is widely expected to make an investment decision on a second LNG-factory worth of more than 18 billion Euro. Other huge projects worth dozens of billions are planned or under construction along the Baltic shore and in the Russian Far East.

However, it remains difficult for foreign investors to enter large infrastructure projects such as the gas processing plants or the railway corridor Moscow-Kazan. An obvious reason is that companies themselves hesitate to invest due to sanctions-related risks and uncertainty. But they might be encouraged to invest if governments simplified mechanisms to issue state-guarantees. Creon Capital works closely with the Association of European Businesses (AEB) to achieve progress on this matter.

Several investment projects are stalled because it takes too much time to issues state-guaranties, which are usually being granted to smaller or highly secured projects only. This means in fact that the government does not issue them. Even governmental institutions such as VEB and its subsidiaries require tough preconditions, which are difficult to fulfill. Therefore, the influx of FDI remains limited and both European and Chinese investors hold back their capital to finance projects.

Creon Capital proposes the Russian government to increase its efforts to ease the conditions for state-guarantees, which must include bureaucratic processes, financial preconditions, due diligence, monitoring and decision-making procedures. The existing institutions of industrial development such as VEB and its subsidiaries shall expand their instruments to include a wider range of economic sectors and increase the minimum amount of funding for single projects.

For further information please contact:
Leila Nettaf
T. +352 26 49 79 2203
E. nettaf@creoncapital.lu

Professionalism, experience, transparency – these are the values that Creon Capital stands for in Luxembourg. This is now confirmed by an independent ranking on the quality of Board compositions: Out of 2191 Alternative investment funds under European jurisdiction, whose management structures the London-based consulting firm IFI Global had examined, the Board of Creon Energy Fund achieved a top 50 ranking. The Sicav-SIF Fund managed by Creon Capital is listed in the “AA” category and ranks alongside with well-known funds from 3i, Blackrock and Blackstone.

IFI Global justifies the top placement of Creon Energy Fund with the “broad and impressive range of five individuals acting as directors”. Criteria for the rating were the board members’ professional background, as well as their experience and how one’s knowledge complements to others. The availability and transparence of this information was also crucial. The latter is not a matter of course, according to the findings of the study published in the monthly newsletter “The NED”: “A common feature of fund boards is to include big name directors, presumably to help capital raising”, says the study. However, this does not always mean that these people also play an active role in management.

Transparency is a weak point of many funds. There are funds under European jurisdiction that disclose “the bare minimum” of information about directors, so that the regulatory requirements are met. The researchers of IFI Global’s “The NED Risk and Governance” assessed a large variety of levels of professionalism on fund boards. It is the rankings goal to encourage funds with weak boards to improve them.

For Creon Capital and the Creon Energy Fund, the positive rating result is a confirmation, said Board Chairman Dr. Fares Kilzie: “Since the founding of the fund, we have relied on proven industry and country experts who understand their areas of responsibility better than anyone else. This is the only way we can work together with our partners to bring ongoing investment projects to success and create real value.”

Learn more about “The NED” Risk and Governance: http://nedglobal.com/

For more information please contact:

Creon Capital S.á.r.l.

Florian Willershausen
Director BD & Marcom
Cell: +352 621 235 126
E-Mail: fw@creoncapital.lu
www.creoncapital.lu

Since political relations between Russia and the West deteriorated, the bilateral partnership between Moscow and Beijing has gained importance. At least since 2014, politicians from both countries have increasingly and resolutely proclaimed a closer alliance of the major powers. Consequently, a more comprehensive cooperation between the countries, was also claimed at the major bilateral China-Russia Conference, which took place on May 29 and 30 in Beijing. As a partner of the Russian International Affairs Council (RIAC), CREON Group supported the summit in China’s capital. Almost 300 delegates participated in the event, which was organized by the China Strategic Cooperation Council with Russia and the Institute for Russia, Eastern Europe and Central Asia. Both organizations belong to China’s Academy of Social Sciences (CASS).

The title of the top-class conference promised optimism: “China and Russia: cooperation on the way to a new era.” Dai Bingguo, a former deputy of the People’s Republic of China and co-chairman of the Chinese-Russian Committee for Friendship, Peace and Development, praised the common strategic interests of both countries. Igor Ivanov, Russia’s former foreign minister (1998-2004) and current chairman of the RIAC, was pleased with the intensification of the relationship in recent years, the importance of which should not be underestimated in an increasingly unstable world. Politically, according to the quintessential high-level discussions, China and Russia became recently closer than ever before.

And economically? There is still room for improvement, as representatives of both countries openly explained. Li Sin, senior academic researcher at the academy and Director of the Center for Russian and Central Asian Studies at the Shanghai Academy of Social Sciences, noted “an absolutely insufficient level of direct investment” from the Chinese side in Russia and vice versa. The reason for this: “There is a lack of mutual trust and understanding.”

Yevgeniy Nadorshin, Chief Economist of the investment company “FK Capital” said, he was missing “equal relations”, so he came to a similar conclusion. Chinese were wrong if they try to explain their low investments in Russia with existent investment barriers: “China has already overcome much larger investment hurdles in Africa years ago.” Instead, it should be time to admit: “We do not trust each other, that is not a question of customs barriers.” Andrey Klepach, Chief Economist and Vice-President of Vneshekonombank (VEB), found reasons for the mutually low level of foreign direct investments (FDI) also in Russia: “We must allow investments in the extraction and processing of natural resources and large-scale infrastructure projects”, the former Vice Minister of Economic Development demanded. It appears to him that China’s investment activity in Russia is too limited to the role of a creditor.

CREON had already systematically collected information about the FDI-influx for the conference one year ago: $ 62 billion, the total amount invested by Chinese financial institutions in the Russia’s energy sector. This rough figure has not changed significantly for a year. And it continues to apply that 98 percent of China’s FDI flow into the commodity and energy sectors.

China, it seems, still considers Russia as a pure raw material supplier. For Fares Kilzie, the founder of the Creon Group, this is a dangerous perception: “If the oil price moves up or down harshly, there will be conflicts between supplier and customer. Investors should swiftly diversify their economic relations with Russia.” However, this does not necessarily mean to invest in completely different industries instead: “Diversification can be achieved easily by just processing raw materials into products in Russia in order to export them to China, ” Kilzie suggested. Projects dedicated to the processing of gas to methanol or agrochemicals, for instance, would be completely free of sanctions while being economically very attractive. The Creon Group offers Chinese as well as European partners to accompany such projects as a co-investor. There are a lot of projects to be realized.

The World Wide Fund for Nature (WWF) Russia and the Luxembourg-based fund management company CREON Capital have agreed to create a «Global Transparency Rating of Oil and Gas Companies». The survey will involve 30 global commodity producers from around the world, it will be focused on their efforts to strengthen their environmental responsibility. Therefore, environmental strategies will be evaluated as well as concrete measures towards more environmental protection in a sector, which is critical for nature and human being. This will be the first worldwide study, which provides transparent and comparable data and information on environmental responsibility in the global oil and gas industry. WWF Russia and CREON Capital signed a declaration on May 25 during the International Economic Forum in Saint Petersburg.

The rating will be presented on several events later this year. Alexey Knizhnikov, WWF Russia’s head of the Environmental Policy program in the Fuel and Energy Complex, said: «The rating will allow us to assess on an annual basis the efficiency and transparency of oil and gas companies in terms of environmental responsibility: the development of renewable energy as an alternative to fossil fuels plays a role as well as activities to conserve biodiversity, the companies’ programs for environmental protection and renaturation.» In the past four years, when WWF and CREON conducted the rating for Russian companies, this format had become a platform of constructive dialogue between energy companies and civil society, Knizhnikov remembered: «Now we want to expand this platform to a global level, and we invite the industry to join the dialogue on ecological responsibility.»

Dr. Fares Kilzie, Chairman of CREON Capital, commented: «Our role as an investment fund is that of the co-investor in environmentally responsible projects, such as the processing of associated gas and the establishment of supply chains for LNG as an environment-friendly alternative to heavy fuel oil and diesel in the transport sector.» For him as a Fund manager it were not only possible and necessary to realize «green» projects, said Kilzie, but also economically reasonable. «We therefore support our partner WWF in every respect in order to promote the topic of ecological responsibility in the global oil and gas industry.»

About us:

The Rating of Environmental Responsibility in the Russian Energy Sector has been launched in 2014 as an initiative of the CREON Group and WWF Russia. The project’s objectives were to conduct tangible and comparable information on environmental activities of oil and gas companies. Thanks to the publicity effect of the rating, some influence could be exerted on the companies in Russia, which partly increased transparency, decreased pollutions or developed an environmental risk-management-system. In 2017, the rating was first presented in Europe, also a separate rating of the Kazakh oil and gas companies was conducted.

The World Wide Fund for Nature (WWF) Russia works with state institutions, companies, experts and local communities to change people’s attitude to nature. The priorities of WWF’s various activities in Russia include the protection and preservation of biodiversity, sustainable forestry and fisheries, the «green economy», environmental governance, climate and energy.

CREON Capital is a fund management company based in Luxembourg. It manages the CREON Energy Fund, which actively invests in energy projects. Green technologies and renewable energy are among the focus areas of investments. The private equity fund also invests in the processing of gas and the construction of a liquefied natural gas infrastructure.

Press Inquiries:

CREON Capital
Florian Willershausen
Director BD & Marcom

Tel. +352 621 235 126
E-Mail: fw@creoncapital.lu
www.zs-rating.ru/

Pictures:

Florian Willershausen (CREON Capital, left) and Alexey Knizhnikov (WWF Russia) signed a Memorandum of Understanding, stating that both organizations will conduct a Global Transparency Rating of Oil and Gas Companies:

Only two years ago, Uzbekistan was an almost closed country: Hardly any investor ventured into the Central Asian Republic with its 30 million inhabitants, where President Islom Karimov had established a kind of nepotism beyond comparison. But when, after his death in September 2016, long-time Prime Minister Shavkat Miziyoyev took the lead, Uzbekistan is opening: the government is working against corruption and bureaucracy, it has noticeably improved the investment climate, facilitates exports and is in the process of creating a zero tax regimes for investors.

According to the World Bank, Uzbekistan is today one of the world’s top 10 reforming countries. The economy grew by 5.3 percent last year, with an increase of 5.5 percent expected this year. Investors who have been waiting for a long time and feared a roll-back to hard autocracy and isolation are now interested in the country – including Creon Capital. The Creon Energy Fund is currently exploring several investment opportunities in the country’s chemicals sector, all of which are export-oriented.

In May, Creon Capital Manager Florian Willershausen participated in a delegation trip of the Eastern Committee of German Business. The 70-member delegation from Germany attended a business conference in Tashkent, where companies such as Siemens promised their first concrete investment. Creon Capital also met with Prime Minister Abdulla Aripov, who was very open to investment from Europe and promised maximum support at the administrative level.

Florian Willershausen commented positively on the results of the trip: “After years of isolation, the opening up of the country is more than just a government PR program. Small and medium-sized companies are venturing out of their way, who see great opportunities in the processing of oil and gas.” In the medium term, Uzbekistan could become a real growth driver in Central Asia, says Willershausen.

For more information please contact:

Creon Capital S.a.r.l.
Leila Nettaf
T. +352 26 49 79 2203
E. nettaf@creoncapital.lu
5, allée Scheffer, L-2520 Luxembourg

Especially in times of international tensions, it is important that the links between politics and business do not leave. The business associations in many countries are responsible for this. Creon Capital, the Luxembourg fund management company, recently joined two more business associations:

The Association of European Businesses (AEB) is the most important lobbying institution for European companies in Russia. Its members include corporations such as Alstom, BP, Volkswagen and ENI – influential long-established companies from Europe are joining forces via the AEB to work for greater legal certainty, transparency and clarity in the Russian business. Creon Capital has been sponsoring since the General Assembly in April 2018 and is involved in various committee meetings.

The Committee of Eastern European Economic Relations (“Ostausschuss”) is dedicated to business relations between German and Eastern European companies and is considered the most influential lobbying organization in Berlin. As Creon Capital also forges co-investment with German companies in Eastern Europe, membership serves to strengthen governmental relations. A delegation trip to Uzbekistan will be held in May, with a representative from Creon Capital participating.

Creon Capital is also an active member of the Luxembourg Private Equity Association (LPEA) and the Belgian-Luxembourg Chamber of Commerce. The Fund’s General Partner Creon Energy is also member of the Belgium-Luxembourg chamber of commerce and the German-Russian chamber of commerce and industry.

Several German cities plan to ban diesel-powered vehicles from city districts – further bans will follow throughout Europe. Stricter sulfur and carbon dioxide limit values on the North and Baltic Seas, as well as later in the Mediterranean, are forcing the ship-owners to make extensive retrofits. And so, the diesel gradually fades from roads and sea routes.

LNG could benefit from it. The burning of liquefied natural gas produces only a fraction of the pollutants compared to diesel, gasoline or heavy fuel oil – and the range is greater. But it lacks the value chain – from liquefaction to transport fueling the entire supply-chain is missing, preventing the fuel’s final breakthrough in the gas station business. How this can be achieved was a subject of the recent LNG conference organized by Wisdom Events in Hamburg.

Wisdom gathered the who-is-who of the industry: representatives of ENI, Elengy, Gas Natural Fenosa, Uniper, Fluxys, Linde subsidiary Nautricor, Baker Hughes and NASA were present to discuss the chicken egg problem: If the decrease of LNG in large quantities is not secured, nobody will run a gas station. As long as LNG prices fluctuate, a freight forwarder will shy away from switching its fleet to LNG. Without the critical mass of demand, an LNG supplier will not offer the gas on long-term contracts with reasonable pricing.

Creon Capital is ready to invest in projects along the value chain for small and mid-scale LNG through the Creon Energy Fund. “We believe in strong medium term growth in this segment,” said Florian Willershausen, BD Director of the Luxembourg Private Equity Fund. “Banks are hesitating to finance because of the high volatility in the market. As a consequence, an equity partner like us is more than ever needed to realize the projects.” Creon Capital is currently evaluating several potential LNG projects and technology providers in Europe.

The US is likely to replace Russia as the world’s largest gas producer by the end of 2018. Within ten years, US companies have been able to keep developing their fracking technology. As a result, the country is not only able to meet domestic demand through domestic gas production, but also to gain a foothold in exports.

America’s LNG market was the subject of a conference organized by CREON’s partner Wisdom Events partners on 27 and 28 February in Houston, Texas. Creon Capital was on board as silver sponsor. Florian Willershausen, Director of Business Development, Marketing & Communications, discussed the LNG market and current challenges in a panel discussion with representatives from GE, Red Box, SNC Lavalin and Monkey Island LNG.

There are many challenges for the US gas market, though. It is not a coincidence, that in the past two and a half years no final investment decision has been made for the construction of new large-scale export terminals: The US manufacturers have difficulties to find customers for their hydrocarbons, given the current oversupply of gas. Since the good utilization of the terminals is crucial for banks and equity partners in the context of project financing, many projects are on hold.

Over the next few years, Australia will bring more gigantic quantities of liquefied natural gas onto the world market. At the same time, Russia is increasing its export of gas in the form of LNG and pipeline supplies. Nonetheless, analysts expect China’s rapidly growing demand to rapidly absorb additional available volumes.

In general, the Creon Energy Fund is also holding back on the financing of the large-scale LNG infrastructure. Instead, Creon Capital, as a fund manager, is examining entry into technology companies that make the handling and transportation of LNG more efficient. An entry into small scale LNG projects, especially in Europe, can also be an attractive topic for the Fund. The latter are aimed primarily at the supply of decentralized power plants, as well as the refueling of ships and truck fleets. These are growth markets that CREON keeps a clear eye on.

You have any questions, remarks or project ideas? Please contact us: fw@creoncapital.lu

Older Posts

Tremendous growth in LNG demand expected

Safe the date: Ecological Responsibility in Russia’s Energy Sector

Creon Capital claims to ease procedures for state-guarantees issued by Russian government

Transparency Ranking: Board of Creon Energy Fund ranks among the top 50 in Europe

Kilzie: Investors from China should consider feedstock processing

WWF Russia and CREON Capital to conduct Global Rating of Oil & Gas Companies

Fund Manager accompanied large business delegation to Uzbekistan

Stronger presence in important business associations

LNG event in Hamburg: How to shape the value-chain of LNG

Creon Capital joined US LNG conference in Houston