A successful 2009 for Eustream despite difficult business environment

Bratislava –The largest carrier of Russian natural gas in the European Union – eustream, a.s. (Eustream), successfully dealt with the gas crisis and other challenges of 2009. Despite the unusual situation at the beginning of the year and the economic crisis, Eustream ended the year with good results. The company focused on safe and reliable gas transmission, efficient operation and on boosting cross-border capacities.

The gas crisis in January 2009 has changed how countries and transmission system operators view the security of transmission and supply. For the first time in the history of natural gas transmission in Slovakia, gas supplies from the east were completely stopped for almost two weeks. Thanks to the efforts of Eustream, in just a few days the company managed to put reverse flow mode into operation. "One of the lessons learnt from the gas crisis is that having reliable and flexible assets and experienced and skilled people to operate these assets, is a crucial element in securing energy supplies for Europe”, said Andreas Rau, Chairman of the Board of Directors of Eustream, summarising the situation. If there is a crisis or restriction of supply from the east, Eustream can initiate reverse flow from the Czech Republic within two to three hours.

Eustream strengthens its cross-border transmission capacities
Eustream supports new connection opportunities to newly established transmission routes. In 2009 greatest progress was seen in the project for a gas interconnector between Slovakia and Hungary. The planned pipeline will be approximately 115 kilometres in length and will connect the Slovak high-pressure pipeline near the village of Veľké Zlievce with the Hungarian transmission network near the village of Vecsés on the outskirts of Budapest. Together with the Hungarian partner, FGSZ Zrt., Eustream has secured financial support for this project under the European Economic Recovery Plan. At the end of last year, both companies successfully finished the non-binding phase of the Open Season process – a survey of non-binding interest in the use of transmission capacity. "The additional cross-border capacity will increase the liquidity of the gas market and will also enhance the security of gas supply for the Central European region. In the future, the project could be connected to European gas projects under preparation, such as Nabucco, South Stream or the LNG terminal in Croatia," said Antoine Jourdain, Member of the Board of Directors of Eustream. The final investment decision will depend on the outcome of the recently started binding phase of the Open Season.

Eustream transmitted 66.4 billion cubic meters or natural gas in 2009
In the past year, the natural gas market was affected by the global economic crisis. At the very first signs of its impact, Eustream began adopting measures to mitigate the negative effects of the economic recession. These measures included a significant reduction in operating and investment costs and optimisation of financial transactions. The fall in industrial production reflected itself in weaker demand for natural gas. This motivated customers, especially in the first half of 2009, to optimise their supply portfolio intensively. The volume of transported gas decreased year-on-year by more than 10% to 66.4 billion cubic meters.
Since 1968, Eustream has transmitted more than 1.9 trillion cubic meters of natural gas.

Eustream invests in security and reliability
In 2009 the company continued to invest in projects for improving the reliability of gas transmission to the European market. Eustream continued in the project for automating compressor stations and installing two new turbo compressors at Veľké Kapušany compressor station.

Financial results
The 2009 financial results of Eustream were partly influenced by the gas crisis, the economic crisis and the unstable EUR/USD exchange rate. However, thanks to the adopted optimisation measures Eustream posted better results than expected, considering the external influences. Profit after tax came to EUR 78.7 million, which is down EUR 6.6 million year-on-year.

Eustream provides non-discriminatory access to the transmission system
In 2009, Eustream initiated the definition of requirements that will fall to the company by implementation of the Third Energy Package of the European Union. The goal is to strengthen the independence of gas transmission system operators from affiliated companies in vertically integrated enterprises. The new rules of the EU Directive must be put in place by energy companies by 3 March 2012.

However, Eustream provides its customers with transparent and non-discriminatory access to the transmission system already today. The company did not refuse a single request for access to the transmission system in 2009 and it has set this goal for itself also for the future. Eustream is therefore developing both investment and technical measures and the company is working on expanding its portfolio of commercial products as well.

Revenues, costs and profit of eustream, a.s., in 2008 – 2009