Company profile

RAG AG

ENGLISH Contents 02 The company

04 The future of energy

08 Business areas

16 Gas storage facilities

24 on the move

28 New technology

34 A responsible corporate citizen

38 History

2 / RAG COMPANY PROFILE / 1 Energy-ready for the future supplies, is only one aspect of this. The other is “green gas” – biogas (or biomethane) made The company from waste materials, and synthetic gas Gas storage facilities are the lifeblood of produced using power-to-gas technology. The security of supply. With total storage capacity Underground Sun Storage and Underground RAG Austria AG is Austria’s largest gas storage company – making it the of about six billion (bn) cubic meters (cu m) of Sun Conversion projects developed by RAG country’s biggest provider – and one of Europe’s leading natural gas, RAG is Austria’s largest gas have opened up the unique proposition of gas storage facility operators. The company develops pioneering energy storage company, and one of Europe’s leading storing large volumes of gas produced from storage operators. The storage business is the renewable sources – such as solar and wind technologies that act as partners to renewables. Its portfolio of business company’s mainstay. About half of all the gas power (synthetic methane and hydrogen) – activities also includes gas production, supply and trading, as well as the reservoirs discovered in the RAG’s 80-year seasonally and carbon-neutrally underground use of gas as a transport fuel. history have been conver- for withdrawal whenever ted into gas storage they are needed. This facilities up to now, and “RAG’s success story is based turns RAG’s gas storage In 2018 Rohöl-Aufsuchungs AG, Austria’s RAG Austria AG is committed to maximising this figure will rise in the on constant technological facilities into energy oldest-established exploration, production and quality and maintaining its strong long-term next few years as RAG innovation, a continuing high storage facilities, creating gas storage company with a history stretching commercial performance by leveraging its makes good on its vision level of expertise, and its stable a link between the gas and back 80 years, was split into two new busines- longstanding subsurface engineering expertise, of sustainable raw shareholders of energy supply electricity sectors so that A decarbonised ses: RAG Austria AG and RAG Exploration & wide-ranging technological capabilities, high material production, they work together still utilities.” future will require Production GmbH. RAG Austria AG focuses on environmental and safety standards, and delivering a decisive boost more closely. massive, the core gas storage business, as well as collaborative and transparent corporate to security of supply in In contrast to electricity, seasonally flexible developing and expanding the use of culture. The company’s success reflects its Austria and Europe as a whole. gas can be stored securely and transported energy storage cutting-edge energy technologies. Operations ability to innovate, and to spot and capitalise Securing energy supplies for the future that over very large distances without losses, out capacity. All this is also extend to gas production, supply and on new trends and business opportunities. can provide energy sustainably and affordably, of sight, in a well-established provided by RAG. trading, as well as the use and marketing of RAG’s goal is to provide its customers with while also reducing greenhouse gas emissions underground transmission network. gas as a transport fuel. safe, efficient, environmentally friendly and and improving energy efficiency, is one of the Gas already has a broad range of applications, RAG Austria AG is playing a vital role in affordable energy and gas storage services – biggest challenges facing the world today. underpinning safe, efficient and sustainable achieving Austria’s ambitious climate goals, sustainably and responsibly. The energy carrier of the future can only be energy supplies. It is used to generate electricity and in the sustainable stewardship of the gas – methane and hydrogen. The advantages and heat, and in transportation as Liquefied country’s raw material and energy supplies. are obvious: gas is inexpensive, clean and Natural Gas (LNG) and Compressed Natural Without the energy in RAG’s storage facilities, efficient. It can ensure that climate targets are Gas (CNG). phased decarbonisation would not be possible, met, and it is a partner to renewables that is so they are key to future energy security. itself renewable. Gas can be manufactured Responsibility from wind, solar and biomass energy, and in RAG will continue to make a major contribution the form of (LNG) and to Austrian energy supplies and storage, as it (CNG) it helps reduce has throughout its history, and to fulfil its carbon dioxide (CO2) emissions from transpor- economic function. This includes observing tation directly. strict safety standards, and implementing all our projects in close consultation with land­ owners, residents, public authorities, Rethinking gas customers and employees. Our mission is to For RAG, focusing on gas, an energy carrier use the natural resources entrusted to us that is highly versatile and promising, means carefully and responsibly, to the maximum looking at it from a new perspective. benefit of society. Conventional natural gas, which will continue to play an indispensable role in energy

2 / RAG COMPANY PROFILE / 3 The global energy business is in a ferment of change. It is on course for a sustainable energy Our vision for 2050 The future of energy Gas is a guarantor system that will limit climate change. The of secure, challenges faced globally and in Europe are sustainable, immense. Security of supply, as well as Austrian households that use gas affordable and efficiency and affordability, must be delivered heating can be supplied with 100 % Providing secure, sustainable, competitive and affordable energy for all is a competitive along with decarbonisation and the move to renewable gas. If the potential for bio- major challenge, and is essential to economic growth and prosperity in Europe. energy supplies. green technology. This can only be achieved gas generation (from residual materials) These four factors by a huge collective effort, for which the EU’s and production of synthetic gas (from are the keys to the Energy Union strategy and the 2015 UN electricity surpluses) in Austria is fully success of the Climate Change Conference in Paris have laid exploited, in 2050 these will meet the energy transfor- the groundwork. entire heating demand (gas central hea- mation. ting and district heating) of all house- holds in Austria – carbon-neutrally. Ambitious targets

Both Austria and Europe as a whole have set gas heating systems and gas-fired power themselves ambitious energy and climate stations), and can underpin affordable, socially targets. The goals contained in Austria’s acceptable and rapid action to combat climate “#mission 2030” climate and energy strategy change. include the expansion of renewable energy generation, a 36 % reduction in greenhouse gas emissions by 2030, and carbon-free energy Security of supply supplies by 2050. With the right strategy, we can meet these goals. The energy transformation represents a The energy transformation can only succeed paradigm shift in terms of sustainability, to be if security of supply is guaranteed. Highly achieved by greater energy efficiency, more developed gas infrastructure, including complete integration of renewable energy and storage facilities, means that enough energy is Conserving the reduction of greenhouse gas emissions. always available. Austria’s high storage resources, capacity provides security: with total capacity boosting efficiency, Reducing energy consumption at the same (working gas volume) of 8.3 bn cu m, the enhancing time as decarbonising the energy mix does country’s storage facilities can hold more than storability, not simply mean conserving resources – it 100% of its annual needs. Barely a single other reducing depen- demands appropriate improvements in EU member state has such high storage dency on imports efficiency, and enabling renewable and capacity relative to its consumption. and expanding the conventional energy sources to work together. use of domestic The gas industry can make a significant energy sources contribution. Gas offers economically viable Sustainable heat supplies with green gas are central issues climate action in all areas; it is the guarantor of In around 30 years, it will be possible to supply all for Europe’s supply security, sustainability and competitive- Austrian households that use gas with green gas. 2,041 mn N cu m/y energy sector – ness. The success of the energy transformation of methane 2.000 and we must pay depends on these factors working together. Gas demand of households and district heating close attention to Paired with the expansion of renewable energy 1.500 (with existing measures) 1.407 Synthetic gas them. sources, gas offers a huge opportunity for Total renewable gas potential potential 1.000 689 reducing CO2 emissions that is affordable and Biogas potential available immediately. Its versatility and 500 374 flexibility means that gas – and increasingly 24 24 39 94 renewable green gas – offers a secure and 2017 2018 2019 2020 2025 2030 2040 2050 sustainable supply of energy using existing

infrastructure (the gas grid, storage facilities, Source: Austrian Association of Gas and District Heating Supply Companies (FGW)

4 / RAG COMPANY PROFILE / 5 Many studies show that using existing gas infrastructure Innovations and power-to-gas technology can help to significantly Gas storage facilities reduce the system costs entailed in the energy transfor- mation. It can remove the need to build additional As energy consumption continues to rise worldwide, high-voltage power lines, as well as saving consumers intensive research and technological breakthroughs are When the wind blows steadily and there is plenty money since they can continue to use existing gas essential if today’s ambitious climate change targets are of sunshine, renewables often produce more central heating systems. to be attained. Recent studies electricity than is needed. Power-to-gas enables Two key advantages “Green gas not only show that although large-scale such surpluses to be recovered and stored, in the of green gas are that “According to our forecasts, has vast potential, it’s decarbonisation represents a form of green gas, in Austria’s storage facilities – it is flexible and by 2050 all Austrian house- sustainable, affordable considerable challenge, rapid the country’s biggest “battery”. All the other dependable. It is hold gas consumers can be and storable. In other technological progress makes it storage concepts (pump storage plants and always available, supplied in full with green #mission 2030 feasible, and it also represents an batteries) offer only a fraction of the storage even if the wind words, it is the enabler gas, opening the way for economic opportunity. These capacity presented by gas storage facilities. doesn’t blow and the of the energy transfor- sustainable heating.” structural changes in the energy skies are overcast, Austria’s climate and energy strategy commits mation.” Gas storage facilities – the country’s battery sector present an enormous providing climate it to the goals of the Paris Agreement and the opportunity for innovative friendly energy for power generation, heating and EU’s 2030 targets. technologies, services and ideas. 93,2 transportation all year round, 24 hours a day – just as TWh By 2050 the country aims to have created a 800 times as much energy storage needed. It possesses the same excellent qualities as the modern, resource-friendly, decarbonised energy For some time now RAG has been working on promising capacity as all the pump storage conventional natural gas that has supplied us with system. solutions that address the changes in energy policies put together energy for decades, and it is renewable, too. and the energy sector. These efforts are based on three pillars. Another benefit of gas is its high efficiency: in combined % Reducing greenhouse gas emissions 0,14 heat and power (CHP) plants, where thermal energy from Greenhouse gas emissions are to be TWh 0,05 •• Increasing gas storage capacity, which plays an TWh gas is used to generate heat as well as electricity, reduced by 36 % from 2005 levels by 2030.

important part in strengthening security of supply in Gas storage Pump storage 1 million electric efficiency is close to 90 %. And if gas is used in a Measures will focus on transportation and Austria and Europe, and in supporting the expansion facilities cars storing power condensing boiler, efficiency of 96 % can be achieved. buildings. of renewable energy sources; Source: RAG % Renewable energy The share of renewables in overall •• Promoting decentralised, renewable, energy-efficient Gas convinces by high efficiencies consumption is to rise to between 45 % energy generation that exploits all potential synergies, lost, but can be carried over from summer to winter, and 50 % by 2030. The figure currently and extends from heat generation and geothermal stored and made available when needed. The infrastructure Effective use of gas stands at 33.5 %. The aim is for all of projects to natural gas vehicles; is already in place – green gas can be injected into determines efficiency 96 % 90 % Austria’s electricity needs to be met by Austria’s nearly 43,000 km gas network, and held in gas renewable energy sources by 2030. •• Green gas and the development of sustainable, storage facilities. These natural underground gas cutting-edge technologies such as power-to-gas, reservoirs, which can hold more gas than is consumed in % Raising energy efficiency which makes it possible to manufacture synthetic – Austria in a year, are being upgraded to prepare them for To permit continued growth in future, and thus sustainable - gas from wind and solar their future role. The existing infrastructure can therefore especially in the industrial sector, by 2030 40–60 % energy. be used as the “battery” of the energy transformation, intensity is targeted to im- and provide the necessary back-up for the volatile prove by 25-30 % in comparison with 2015. This allows RAG to support the goals of the Energy renewables. % Security of supply is top priority Union and the Paris Climate Change Conference, as well Both biogas and synthetic natural gas are completely Electricity generation CHP Gas condensing The focus will be on existing highly effi- as making an important contribution to sustainable, carbon neutral, and therefore climate friendly. using gas boilers cient CHP plants as well as the necessary secure and affordable energy supplies. Source: Austrian Association of Gas and District Heating Supply Companies (FGW) expansion and modernisation of network and storage infrastructure.

Green Gas Flagship project: Production of green gas Working together, natural gas and green gas represent will be promoted as a major flagship project. the only realistic prospect for achieving climate targets Measures will include reduced costs for Green gas – meaning renewable gas – can be biogas, The gas grid while safeguarding security of supply. injection into the grid and tax advantages. generated from plant residues and other waste, or Some 75 terawatt hours (TWh) of synthetic gas produced from excess electricity generation 75 Source: BMNT, BMVIT – May 2018 energy in the form of natural gas is using power-to-gas. This means power generated from TWh transported out of sight, underground renewable sources can be converted into gas – hydrogen on a 43,000 km long network. or methane – so that excess solar and wind energy is not

6 / RAG COMPANYCOMPANY PROFILEPROFILE / 7 Business areas

Production Supply

RAG deploys advanced technology to We provide our customers with reliable produce eco-friendly natural gas with storage services, 24 hours a day, 365 days minimum impact on the environment, and a year. We deliver flexible and import- researches and develops the production of independent supplies of our own natural renewable gas. Hydrogen made using gas and which are wind and is converted into secure because they are domestically methane underground, in natural gas produced. In the sector of mobility, our reservoirs, and large amounts of this gas liquefied natural gas (LNG) and compressed can be stored. The company also continues natural gas (CNG) filling stations offer to implement geothermal energy projects. Storage environmentally friendly fuels.

RAG stores large volumes of gaseous energy (methane and hydrogen) in natural underground reservoirs. The gas storage facilities operated by RAG, with a combined capacity of 6 billion (bn) cubic metres (cu m), are vital to security of supply in Austria and Europe. The company’s storage capacity is marketed by its subsidiary RAG Energy Storage GmbH.

8 / RAG COMPANY PROFILE / 9 Climate friendly natural gas has a pivotal role Revolutionary power-to-gas technology holds to play in the progressive decarbonisation of the key to affordable solar and wind energy Natural gas the energy system. The statistics show that transportation and storage, and thus to the Gas is fit for the gas is growing in importance. A forecast constant availability of these energy sources. future. It is low on increase in consumption of almost 50 % Gas has become indispensable not only in emissions, worldwide by 2040 makes natural gas the electricity generation, but also in heat generation Natural gas is by far the most environmentally friendly conventional innovative, in fastest-growing fossil fuel. Its share of the – at cogeneration plants – and in the trans­ energy source, and one of the most important worldwide. Expert opinion abundant supply, energy mix will climb to 26 %, meaning it will portation sector as LNG and CNG. Natural gas, is unanimous that natural gas will not merely remain important, but that increasingly green, replace oil as the world’s most important as an energy carrier, achieves a universality, its role will grow. and set to become energy source. This boom will principally be which until then was the sole possession of climate neutral over driven by the power generation and industrial crude oil and fully deserves its its reputation the long term. sectors, while the expansion of LNG infrastruc- as the energy source of the future. ture will decisively improve its availability.

Global Consumption Shares (Mtoe) (%) The advantages of gas

2016 2040 2016 2040

Primary energy 13.276 17.983 100% 100% % Using gas for heat, transportation By fuel: and power generation can lower Oil 4.336 4.836 33% 27% emissions of carbon dioxide (CO2) Gas 3.204 4.707 24% 26% and other pollutants quickly and cheaply. Coal 3.732 3.762 28% 21% Nuclear 592 912 4% 5% % Gas is the natural partner for renewables because of its flexibility Hydro 910 1.241 7% 7% when injected into existing storage Renewables 502 2.527 4% 14% facilities and the gas grid. Quelle: BP Energy Outlook 2018 % Gas can be green: biomethane, hydrogen and power-to-gas mean that over the long term gas supplies Gas’s attractions are increased by currently will become carbon neutral. competitive prices, high energy efficiency and Gas underpins highly developed existing infrastructure. It % Gas has a key role to play in our competitive- provides round-the-clock security of supply, forward looking, climate friendly ness and jobs. which is crucial to the economy because of its energy supplies. It can be easily and Only gas can importance to large industrial companies as efficiently used for space and water assure Austria’s well as small and medium-sized enterprises. heating, cooling and electricity future as a The main consumer of natural gas in Austria is generation, and as fuel for trucks business and the industrial sector, accounting for 43 % of and cars. Gas does not release industrial location total demand. Gas is used to generate process any fine particulates when burned, by providing heat or as a raw material in production. making it the lowest-emission fossil climate friendly Natural gas is the most important energy fuel. And gas can be eco-friendly: energy supplies source for Austria as an industrial location. biomethane is produced from that arrive biogenic waste, and synthetic gas is precisely when Gas has the fastest-growing share of fossil fuel produced from renewable electricity and where they consumption, since it is undoubtedly the and hydrogen (power-to-gas). are needed. climate friendly, reliable, low emission alternati- ve for power generation and other applications. Gas is an ideal and essential back-up for renewables due to its ability to compensate for swings in electricity supply and demand.

10 / RAG COMPANY PROFILE / 11 Natural gas production

Valuable energy on our doorstep: supplies of locally produced, eco-friendly A downhole safety valve in the production string prevents the uncontrolled release of gas. The natural gas play an important economic role, among their many advantages. natural reservoir pressure, which can be several The history of gas RAG has been producing natural gas at fields in Austria for over 50 years. hundred bar, lifts the gas to the surface, where it travels from the wellhead to the treatment plant production in Austria Austria’s gas reserves play an important part strictest environmental and safety standards via a high-pressure pipeline. Depending on the in security of supply. In addition, gas produc- – and this reduces import dependence. reservoir type and the pressure depletion, anyt- Gas is vital to tion is a major growth driver for the econo- Currently, Austria meets about one-sixth of hing up to 99 % of the natural gas in place can be RAG recognised the potential of gas as an industry, district mies of the regions where it takes place. About gas demand from households, industry and recovered. The flow rate declines over time, along energy source as early as the 1960s. Until then, heating and 15 % of the gas required by Austria is produ- power stations with domestic output. with the reservoir pressure. Because of this, it had barely played any role in the Austrian power generation. ced domestically. The remaining 85 % is made The biggest gas discovery in RAG’s history additional production wells are required later in economy. The first natural gas discoveries were up of imports from the CIS and other count- was the 17.5 square kilometre Haidach field, the life of a field to maintain the level of overall mostly a by-product of oil exploration. Targeted ries. RAG contributes about 45 % of domestic near Strasswalchen, struck in 1997; today it is output. gas exploration only became possible with production. Austria’s largest gas storage facility, with a modern methods such as 3D seismic surveys. capacity of 2.6 bn cu m. Clean natural gas for Demand for natural gas was particularly strong Domestic energy in Upper Austria. When RAG encountered gas consumers in Voitsdorf in 1963, it was possible to use it as State-of-the-art an energy source for a large-scale industrial production technology plant for the first time, launching the rapid RAG has been producing natural gas at fields Before the gas can be fed into the supply network development of natural gas in Upper Austria. in Lower Austria, Upper Austria and it has to be processed. First, the produced formation Over a period of just a few years, RAG discovered for over 50 years, and today operates about When a new gas field is identified by a 3D water, liquid hydrocarbons and solids are separated and developed a number of small gas fields. 200 gas wells. seismic survey and is developed, first a out in drying plants. The remaining water vapour The industrial enterprises in the Wels and production string, reaching down to the is then removed from the gas using glycol or areas were potential large-scale consumers, Supplies of locally produced, environmentally bottom of the reservoir, is inserted into the adsorption agents. Finally, the pipeline-quality and could be directly supplied with locally friendly natural gas play an important econo- production well, once it has been cased and natural gas is fed into the network. produced gas. mic role, among their many benefits. We know cemented. For the gas to flow into the well Over the past 40 years, natural gas has exactly where the gas comes from, and that it from the reservoir, the casing and cement experienced a rapid upswing as an energy source. Starting from 0.76bn cu m of natural is produced and transported according to the must then be perforated. A so-called “Christ- “Natural gas is by far the most environ- mas tree” that closes off the well is installed at gas in 1955, output rose continuously to reach mentally friendly conventional energy the surface. a peak of 2.5 bn cu m in 1978. Since then source. It can be safely stored in very domestic production has hovered between 1 bn large quantities, and is ideal for transpor- and 1.8 bn cu m annually. In 1970 domestic tation in existing underground pipeline production still met 66 % of Austrian gas infrastructure. Gas is a key factor in consumption. Due to the strong growth in maintaining security of supply at all take-up of this environmentally friendly energy source, the proportion stands at a sixth of the times.” country’s annual consumption today – with gas still a mainstay of security of supply.

12 / RAG COMPANY PROFILE / 13 Supply and trading

RAG has international gas trading operations, and supplies domestic and foreign energy companies, and industrial consumers. The company specialises in providing flexible and secure supplies of gas produced from domestic reserves.

In the past, RAG’s equity gas output was sold almost RAG is an active market participant of a number of exclusively to its owners. This was in the days before gas European gas hubs and exchanges. EU-wide gas liberali- market liberalisation, when contract design and fulfilment sation and the creation of entry/exit systems have opened were still a simple matter. The pace of change has been up new trading opportunities. The company’s downstre- rapid since then. The EU’s energy liberalisation efforts, am division is responsible for gas trading and sales, and initiated in 1998, have gaining the necessary access opened up the gas markets to markets. Many years of “Security of supply is the core issue for the in large parts of Western experience and close monito- and , and energy sector. That’s our mission, too, and ring of markets enable RAG to traders and suppliers can we are totally committed to it. When provide its customers with now buy and sell gas on everything is running normally people tend tailor-made solutions. increasingly liquid exchan- to forget how vital complete security of ges and trading platforms. supply is in an emergency. We supply With pricing increasingly As a result of gas market regional utilities and are the backbone of decoupled from oil and driven liberalisation in 2002, RAG by spot quotations, the their services. Our storage facilities have to was able to market its gas influence of European trading production outside Austria keep functioning, come what may, and be points and exchanges is and the focus switched ready to spring into action at any time. steadily growing. The resul- away from sales at entry That’s our day-to-day business. There’s a lot tant price volatility is bringing points to the national low of high tech behind the scenes.” new challenges for supply pressure grid, towards portfolio design and risk exports via virtual trading management. points. RAG has since made a name for itself as an RAG also produces and supplies liquefied LNG (Liquefied flexible, independent company. In 2002 its natural gas Natural Gas) for use as a low-carbon transport fuel, or to sales topped 1 bn cu m for the first time. The company make gas available to industrial and commercial consu- has progressively built up a trading and supply business mers, that are not connected to the public gas grid. which operates on markets throughout Europe.

14 / RAG COMPANY PROFILE / 15 Gas storage facilities

In Austria gas storage facilities are synonymous with security of supply. RAG is Europe’s fourth-largest storage operator, with 6 bn cu m of storage capacity at its facilities.

Balancing out daily and seasonal Gas storage – the RAG has been using depleted gas reservoirs to Sustainable use of store gas for over 35 years. Expansion of gas demand swings perfect partner for storage in Upper Austria and Salzburg has reservoirs renewables made RAG not only the largest energy storage company in Austria over the last 20 years and Natural gas is produced throughout the year, at roughly Thanks to the fact one of Europe’s leading operators of gas By progressively expanding its gas storage constant rates. Austria’s imports are transported along RAG’s gas storage facilities are crucial to that Austria’s storage facilities, but also a cornerstone of capacity, RAG has added a key additional link long-distance pipelines from Norway and Siberia, and as the progressive decarbonisation of the geology is ideal for security of supply in Austria and Central to its supply chain, and in so doing it has LNG cargoes. The amount of gas consumed by industry, energy system, the attainment of climate underground Europe. RAG has converted about half of the developed a sustainable use of gas reservoirs. power stations and households varies according to the targets and the growing use of renewable storage it is able to gas reservoirs discovered over its 80-year The 6 bn cu m of storage capacity operated by season and time of day. Demand is much higher in winter energy sources. Together, environmen- make a major history into storage facilities and thus enabling RAG alone is roughly equivalent to 75 % of than in summer, and more gas is used during the day than at tally friendly natural gas and renewables contribution to a sustainable energetic use – a figure unmatched Austria’s annual natural gas needs. Relative to night. Gas must be stored to balance out these swings in are a dream team. Natural gas from security of supply anywhere in the world. The company is consumption, the country already has the demand, and to ensure that it is available when needed. storage is a dependable source of in Europe as a well-equipped to meet one of the biggest largest gas storage capacity in Europe. energy to balance out the swings in whole. challenges of the future – energy storability. The company’s storage facilities serve customers “Natural gas is by far the most environmentally in Austria and abroad, and include joint wind and solar power output. To achieve friendly conventional energy source. It can be ventures with multinationals such as the planned expansion in the use of and . RAG’s storage capacity is marketed safely stored in very large quantities, and is ideal renewables, these energy sources need by its RAG Energy Storage subsidiary. for transportation by existing underground pipe- a partner in the energy mix to even out line infrastructure. Gas is crucial to energy security the supply fluctuations – and natural gas of supply, and plays a key economic role due to fits the bill perfectly. It is easy to store, and gas-fired power stations are not its use in industry, district heating and power only environmentally friendly and generation.” efficient, they also offer outstanding operating flexibility. They are able to react immediately to ups and downs in wind and solar output. RAG’s gas storage facilities can also be of the gas reservoirs used for green gas. An important 50 development is the injection of gas generated using wind and solar power have been sustainably converted (hydrogen or methane) into existing gas % into . infrastructure. Biogas (biomethane) will also play an increasingly important role.

16 / RAG COMPANY PROFILE / 17 From gas fields into storage facilities

Storing gas in depleted reservoirs is certainly one of the most efficient, eco-friendly and safe ways of stockpiling energy – but it takes a lot of expertise to get it right. A modern storage facility is a masterpiece of engineering.

After a gas reservoir has ceased to be produc- Conserving resources and Expertise and safety Efficient, sustainable tive, it can be used as a storage facility instead. When gas arrives at a storage facility via a the environment and safe RAG’s success is a pipeline network it first enters a metering product of the RAG has demonstrated that it is equal to the technical station where it is filtered, and the quantity company’s wealth challenges posed by gas storage, and has the requisite and quality are measured. Injection and Husbanding domestic resources and good of experience, expertise. Its state-of-the-art storage facilities are permanently Use of depleted gas reservoirs is withdrawal take place via a number of wells. environmental stewardship play a vital role in innovative monitored and maintained. Highly skilled staff run the the safest, most efficient and most Where necessary, compres- gas storage, and all the capacity, state-of- installations from a dispatching centre, working around the environmentally friendly way of sors bring the incoming gas processes at storage facilities the-art technology “In the course of its many clock to maximise efficiency, and to optimise environmental stockpiling energy. Austria has up to the right injection operated by RAG are designed and and technical performance. RAG is also an industry leader in geological structures that are unique pressure. Since compres- years of storage expe- for maximum eco-friendliness. safety standards. terms of safety, and the entire safety management system at in Europe and ideal for gas storage. sion raises the temperature, rience, RAG has steadily Optimizing energy use and RAG’s installations is based on audited processes. In 2009 New supplies can be stored in these the gas must then be cooled developed the technical minimizing emissions, RAG became the first European company to obtain Technical formations, where gas accumulated before being conveyed to technologies for waste know-how required for Safety Management (Technisches Sicherheitsmanagement, naturally over millions of years, at the wellhead and injected prevention and new methods natural gas storage. TSM) certification from the German Technical and Scientific depths of over 1,000 metres. These via the probes into the for permanent monitoring Thus, the most modern Association for Gas and Water (Deutscher Verein des Gas- former gas fields originated over natural rock formations. The and testing of plants and lines und Wasserfaches e.V., DVGW). 20 million years ago, when orga- pressure that originally technology guarantees are particularly vital. This is Systematic quality and environmental management, and nic matter in the primeval ocean prevailed in the reservoir is flexible use and where internal control and an strict health and safety standards are central to RAG’s that occupied today’s Prealps was not exceeded The gas is maximum safety.“ energy management system philosophy. trapped by sandstone sediments. withdrawn when it is certified according to the Over time, the gas migrated into needed, and processed accordingly. It must be ÖNORM EN ISO 50001:2011 the pores of the sandstone, forming dried as it will have absorbed moisture in the standard come in. gas reservoirs that can have an reservoir. Once it is area of several square kilometres. on-specification it enters the public grid Clay strata several hundred metres and is transported to the consumer. 6 billion thick overlie the gas reservoirs, and cubic metres this natural insulating layer makes them an extremely safe means of After starting out over 35 years ago with 50 million underground storage. The proof of (mn) cu m of storage capacity in Puchkirchen, today this comes from nature itself, since RAG is one of Europe’s biggest storage operators, the original gas reserves were held with total storage capacity of about 6 bn cu m. This there for millions of years. corresponds to a more than hundred-fold increase in capacity.

18 / RAG COMPANY PROFILE / 19 How do gas storage 01 facilities work? 02

11 12

03 10 09 01 Public grid When gas arrives at a storage facility via a pipeline network, it first enters a metering station where it is filtered, and the quantity and quality are measured. 04 Injection and withdrawal take place via a number of 05 02 Metering station wells. Where necessary, compressors bring the incoming gas up to the right injection pressure. Since compression raises the temperature, the gas must then be cooled before being conveyed to the wellhead and injected via 03 Compressor station the probes into the natural rock formations. The pressure that originally prevailed in the reservoir is not exceeded.

A certain amount of natural gas is left as cushion gas in 06 04 Cooling units the reservoir to minimize the number of wells. The cushion gas assists the pressure released after the natural gas has been exhausted and optimizes the storage facility for operation. The so-called „working“ 05 Wellhead gas is injected and withdrawn as needed. In this way, the natural gas storage can be operated economically and ecologically at the highest level.

06 Well The gas is withdrawn when it is needed, and processed accordingly. It must be dried as it will have absorbed Gas reservoir moisture in the reservoir. Once it is on-specification it enters the public grid and is transported to the consumer. 07 07 Reservoir

08 08 Working or cushion gas

09 Preheater

10 Pressure reduction station Pores in the thin section

11 Drying unit

12 Control room and stores

20 / RAG / 21 Grain size of approx. 0.5 mm RAG’s gas storage facilities Haidach 7Fields

As the operator of storage facilities that have a total capacity of about 6 bn cu m of natural gas, The Haidach gas storage facility is a joint venture The 7Fields facility is a joint venture project between RAG is Austria’s largest gas storage provider and one of Europe’s leading storage operators, between RAG, Russia’s Gazprom Export and Germany’s RAG and Germany’s Uniper. As with Haidach, RAG was making a significant contribution to security of supply in Austria and across Central Europe. Wingas. RAG designed and built the facility, and responsible for design and construction, and operates operates it. Gazprom markets the capacity. the facility. Uniper markets the capacity. The first The first development phase came onstream in 2007, and development phase was completed in April 2011, after the second in April 2011. The total storage capacity of just two years’ construction time, and the second phase Puchkirchen/Haag Nussdorf/Zagling 2.78 bn cu m of natural gas is equivalent to a quarter of was finished in April 2014. Storage capacity now totals annual gas consumption in Austria. Haidach is the some 1.7 bn cu m. The site is unique in Europe, with four second-largest storage facility in Central Europe. storage stations connected via pipelines to three metering RAG’s gas storage operations originated in Puchkirchen, RAG built this facility between 2011 and 2014, as part of stations, and to the Austrian and international gas grids. Upper Austria. This was the site of its first Austrian the 7Fields project, and it was commissioned in April natural gas discovery, made in 1956. In 1982, after more 2014. It has a working gas volume of 289 mn cu m than 25 years’ production, RAG began using the gas (equivalent to 3.3 TWh), with an injection capacity of reservoir as a storage facility. The last of a number of 120,200 cu m/hour (1.4 GW) and withdrawal capacity of expansions was completed in 2009, and in the summer 150,000 cu m/h (1.7 GW). erke of that year Puchkirchen was linked with the Haag facility erke AG by a 20-kilometre pipeline. The facility currently has a PNTA ST ren ren maximum working gas volume of about 1.1 bn cu m Haag rsen Puchkirchen (equivalent to 12.2 terawatt hours, TWh), and injection Pilsbach ienn rsen HAG and withdrawal capacity of 520,000 cu m/hour (5.9 giga- Haidach 5 watts, GW). Haidach endr 7ields Aigelsbrunn eerin rn Haidach 5 Aigelsbrunn TAG Austria

The repurposing of the depleted gas formation as a Gas production at this field started in 2001. Development eiendr storage reservoir was carried out in 2005. Haidach 5 has of the gas storage facility began in 2008, and it was SO a maximum working gas volume of around 16 mn cu m commissioned on 1 April 2011. Aigelsbrunn has a maxi- red

(equivalent to 181 gigawatt hours, GWh), and injection mum working gas volume of approximately 130 mn cu m, rndsein and injection and withdrawal capacity of 50,000 cu m/hour and withdrawal capacity of some 20,000 cu m/hour Gas transmission grid (226 megawatts, MW). (equivalent to 565 MW). Upper Austria / Überackern Salzburg Ried/Innkreis Total maximum working gas volume of facilities RAG gas storage facility Haiming operated by RAG Haag RAG joint venture gas storage facility (TWh, GW and MW thermal) Oberkling Pfaffstätt Pilsbach RAG joint venture gas storage facility / Auerbach Haidach Puchkirchen Working gas volume: 68.1 TWh 6,028 mn cu m Aigelsbrunn 68,1 RAG gas storage facility Withdrawal capacity: 31.7 GW 2,803,000 cu m/h Vöcklabruck Gas transmission Nussdorf Nord Haidach 5 grid TWh Injection capacity: 26.1 GW 2,312,200 cu m/h Underground Sun Storage / Conversion Zagling Nussdorf Süd Storage connecting pipeline

22 / RAG COMPANY PROFILE / 23 Global, European and national climate targets environmentally friendly, affordable natural aim for a reduction in vehicle emissions, since gas. As a producer of natural gas and operator Natural gas on the all medium and long-term forecasts predict of gas storage facilities, RAG can warrant a growth in traffic – especially heavy goods crisis-proof supply of fuel at stable prices far Natural gas is the traffic. In recent years the effects of improve- into the future. cheapest and ments in the efficiency of drive systems and move safest way to fuels have been cancelled out by sharp growth The fuel of the future slash road traffic in goods traffic. This has led to annual increases pollution. in road traffic related greenhouse gas emissions. Road traffic is responsible for about Mobility plays an essential role in a functioning economy. But in the age of climate The use of environmentally friendly gas as a 45 % of emissions. In urban areas in particular, fuel can make a major contribution to hitting change, one thing is clear: transport fuel must be clean, affordable and safe. Gas fits air quality suffers from vehicle emissions. A ambitious climate targets. In the future, green the bill on all counts. raft of EU initiatives are therefore promoting gas produced from renewable sources could increased use of natural gas or rather LNG as also be used in the form of LNG, in addition to transport fuels. conventional natural gas. RAG’s ongoing research and development activities are The advantages are obvious: opening up new possibilities. Power-to-gas % Reduced nitrogen oxide emissions technology is being used to produce synthetic gas from surplus electricity generated by solar % Reduced fine particulate emissions and installations. Hydrogen is % Reduced noise derived from water by means of electrolysis. This gas can then be converted into methane,

binding CO2 in the process. The synthetic Infrastructure methane is of the same quality as natural gas, and can simply be injected into the existing gas grid and held in natural gas storage Major investments are being made in infra­ facilities. This means that renewable gas for structure (filling stations) across Europe. RAG transportation can be provided at any time, operates LNG and CNG filling stations in around the clock, and need never run out. Upper Austria, opening up driver access to

Mobile gas supplies

Natural gas is frequently required for testing purposes or as an emergency supply in a variety of situations that occur in the operation of gas plant and pipelines. Since gas cannot always be withdrawn from pipelines, RAG has acquired extensive experience in compressing natural gas (methane) to produce CNG, and in trans- porting CNG. This expertise is also available to our customers, forming part of the portfolio of products and services we offer.

24 / RAG COMPANY PROFILE / 25 Liquid natural gas (LNG)

LNG is a tried and tested technology, and refuelling is quick and easy. Since it is ideal for long-haul routes it is perfect for heavy goods vehicles.

The strict environmental requirements of the Advantages of Euro 6 emissions standard can easily be met Compressed by LNG. In comparison with diesel, emissions LNG-powered trucks LNG is a competi- of sulphur oxide and fine particulates from tive, clean and vehicles running on LNG are 95 % lower, while natural gas (CNG) affordable nitrogen oxide emissions are over 70 % lower % CO2 emissions up to 20,000 kg/year lower alternative to and CO2 emissions up to 15 % lower. Noise in comparison with a Euro 6 diesel truck conventional fuels emissions from LNG vehicles can be up to 50 % % 95 % reduction in fine particulates for road haulage. lower than those of diesel vehicles. In other % Over 70 % reduction in nitrogen oxides Environmentally friendly natural gas is an outstandingly knock-resistant. All in all, vehicles running on natural gas

words, LNG already offers an environmentally (NOx, NO2) economical, safe and clean vehicle fuel, and has been in are quieter than those that use petrol or diesel. benign alternative for mobility, and the cost % No AdBlue/catalytic convertor needed use in Austria and around the world for decades. arguments are also on its side. Operating costs % Mature technology for use in heavy goods In principle, gas-powered cars work the same way as are an important factor for road hauliers, and vehicles, and assured long-term availability cars that run on petrol – the petrol engine was actually Filling up with LNG vehicles fuel costs undercut conven- % Reduction in vehicle noise of about 50 % originally developed for gas. This has many advantages: tional fuels such as diesel. % Infrastructure being rolled out along the the technology is mature, and the same engine can run LNG Blue Corridors – principle routes for efficiently on either CNG or petrol. The gas is condensed LNG heavy goods vehicles in Europe by compressors at the filling station, and stored in It could hardly be easier or safer: filling up is as simple as Infrastructure % EU initiatives such as Horizon 2020 pressurised containers. it is for vehicles running on conventional fuels. However, CNG will not flow if the connection to the car is not correctly made and leak-proof. The process takes roughly the same amount of time as filling up a car with regular RAG opened Austria’s first LNG filling station Clean – safe – quiet – cheap fuel. CNG filling stations can now be found throughout at Ennshafen port, near Linz, in 2017. The site What is LNG? Austria, and the network is continually expanding. The in Enns has a capacity of 12 tonnes of LNG, In establishing country has about 160 stations at the moment – relative enough to refuel between 60 and 90 trucks. LNG as an Natural gas is an affordable and environmentally friendly to the size of the country, this is the most extensive RAG delivers natural gas using its own LNG environmentally Liquefied natural gas (LNG) is natural alternative to conventional fuels. It takes the form of network in Europe. tankers. Some of the gas comes from RAG’s friendly fuel for gas that has been converted to a fluid methane – produced from natural sources, biofuel RAG has operated public, self-service natural gas filling gas fields in Austria, and is processed at the goods vehicles, state by cooling it to a temperature of production or the conversion of renewable solar and stations at its sites in Gampern and Kremsmünster, open company’s LNG plant in Gampern, Upper RAG is making a around –160 °C. The expansion ratio of wind energy. This means the fuel tank contains either around the clock, since 2014. This business model will be Austria. This currently produces about two vital contribution natural gas from liquid to gaseous form natural gas or compressed natural gas made from steadily rolled out across RAG’s exploration and produc- tonnes of LNG a day for use at the Ennshafen to achieving is 1:600, meaning that large volumes of natural materials – protecting the environment. tion areas, to give consumers access to environmentally LNG filling station. This is enough to refuel Austria’s climate energy can be transported and stored as Since natural gas has a high hydrogen and low carbon friendly, affordable, locally-produced natural gas as a 10-15 LNG-powered trucks a day. LNG. It can be produced in Austria or targets. content, up to 20 % less CO2 arises than with normal transport fuel. transported to customers in specially petrol. In comparison with diesel, nitrogen oxide emissions designed road, barge and sea-going are 90 % lower, and in comparison with petrol, 80 % less 1kg of natural gas contains the same tankers. As well as being easy to carbon monoxide is emitted. The main emission produced amount of energy as 1.5l of petrol transport and store, LNG offers another when burning gas is steam – and vehicles emit virtually significant benefit: it is highly economical no fine particulates. Using CNG vehicles can significantly and efficient. As extremely pure natural improve air quality, especially in urban areas. gas that consists almost entirely of CNG is also quieter. Natural gas burns more slowly, and 1,3 l 1,5 l methane, it has an average gross therefore more softly, making it only about half as noisy 1 kg = = calorific value of approx. 11.3 kWh per as diesel. With an octane rating of 130, it is also extremely cubic meter of gas. Natural gas Diesel Petrol

26 / RAG COMPANY PROFILE / 27 Green gas not Together, versatile natural gas and renewables Power-to-gas New technology only has immense are already a dream team. Sometimes the potential, it is wind does not blow or the sun goes in, while sustainable, at other times surplus power is produced. To The principle behind power-to-gas affordable and meet ambitious climate goals, and for renewable could hardly be simpler: Surplus The future belongs to green gas. For some time now, RAG has been working hard hence available energy sources to increase their share of the solar and wind power is used to split on new approaches to making large amounts of renewable energy conveniently round the clock. In energy mix over the long term, renewables water into oxygen and hydrogen by accessible for consumers. Wind + sun = green gas – this is the equation behind power- other words, it is need a means of compensating for fluctuations means of electrolysis. The hydrogen the enabler of the in output. to-gas. Together with natural gas, this could be the key to the success of the energy can then be stored for later use, for energy transfor- Variable green power supplies are not the only transformation. It can make the transportation and storage of large amounts of solar example as primary energy in fuel mation. problem. How can we draw on energy produced and wind power economically viable. It can mean that climate friendly energy is always cells. A further process stage is also in summer during the winter? What is to be available whenever it is needed. possible: in methanation, the done with all the excess power generated by hydrogen reacts with carbon dioxide wind and solar farms at times of low (CO ) to form methane, the main consumption? 2 component of natural gas (typically This surplus energy needs large amounts of making up 98 %). The CO can be storage so that it can be made available during 2 drawn from the atmosphere or it can Its flexibility peak periods. The pump storages used up to come from a biogas or industrial means that gas – now do not have sufficient capacity. The plant. The product of the process is and increasingly solution is obvious. Gas infrastructure in the renewable synthetic natural gas. renewable green shape of pipelines and subterranean storage This means that electricity can be gas, thanks to facilities – which can store more gas than is converted into gas, making it power-to-gas consumed in Austria in a year – already fulfil storable in large quantities for the technology all the requirements for future use as a storage first time. The process solves one of – offers a secure, system for green gas. the biggest problems posed by sustainable and A number of German studies indicate that electricity storage – shortage of climate-friendly using existing gas infrastructure and space. It can simply fall back on supply of energy. power-to-gas technology can slash the cost of existing natural gas infrastructure, in the energy transformation. This approach the shape of the pipeline grid and would both remove the need to build new the gigantic storage facilities. power transmission lines and spare consumers Instead of developing and rolling the expense of replacing efficient gas central out expensive, high-tech storage heating systems and appliances. solutions, power can be transformed into synthetic natural gas and stored in depleted gas reservoirs. The process gives rise to no emissions apart from the oxygen Energy storehouses released when the water is split. Today the efficiency of the conversion process is already about 60 % – a lot Most of the renewable electricity produced in Austria is when one thinks that today surplus generated in spring and summer – outside the heating electricity is often not used at all season. Run-of-river power stations produce twice as much owing to the lack of storage capacity, energy in summer as they do in winter, and seven out of and instead wind turbines are idled every ten kilowatt hours (kWh) of solar power are generated or whole wind farms taken off the in the summer months. But this energy cannot be stored for grid. extended periods because the electricity storage that would be needed is lacking. Existing gas storage facilities are the answer.

28 / RAG COMPANY PROFILE / 29 Underground Seasonal conversion and storage Sun Storage Households, Industry, Mobility, CNG

Harvesting, storing and supplying solar energy: RAG tested this groundbreaking approach to energy production and storage in a unique research project, Underground Sun Storage. Gas Power Plan / CHP Unit Power Grid Gas Grid The storability of hydrogen produced using Storing hydrogen solar energy was demonstrated at a small RAG’s constant depleted gas reservoir in Upper Austria. Energy ability to innovate from renewable sources that can be retained and commitment thanks to storage offers the only straight We have taken these processes as a model and to research and replacement for conventional energy – and imitated them with power-to-gas technology. Solar Energy development are Austria’s gas storage facilities provide the Using electrolysis, excess energy generated Wind Power among its key necessary infrastructure. The project is being from renewables is transformed into hydrogen, success factors. financed by Austria’s Climate and Energy Fund. which can be stored in the natural gas net- work. A range of tests are being conducted to The challenge investigate how far the natural gas infrastructure tolerates hydrogen. These have already demonstrated that the existing infrastructure copes well with hydrogen content of up to In most cases renewable energy sources are 10 %. difficult to manage. Neither the wind nor the Finding a solution to the question of storing sun obey energy demand. But the electricity renewable energy is the key to maximising its grid cannot store energy, so grid operators contribution to the energy mix and thereby

have to adjust generation precisely to demand. achieving a substantial reduction in CO2 If it were possible to store large amounts of emissions. In terms of the strategic development power and inject it back into the grid when of energy systems for the future, the research The research project needed, generation would no longer be tied to project led by RAG is hugely significant for demand. That is why huge energy storage companies, political decision-makers and facilities are essential in a world that relies on public authorities. The main purpose of this pioneering project was to The project comprised laboratory experiments, renewables. In nature, investigate the hydrogen tolerance of underground simulations and a field trial conducted on an industrial carbon and hydrogen gas storage reservoirs. The project demonstrated that scale at an existing reservoir with similar characteristics have evolved as “Power-to-gas technology enables gas storage facilities can tolerate hydrogen content of to Austria’s large developed storage facilities. The primary sources of conversion of surplus electricity into up to 10 %. This means that naturally formed gas tests were accompanied by a risk assessment, a life energy, and the main hydrogen or rather synthetic methane. storage reservoirs are not a limiting factor within the cycle assessment, and an analysis of the legal and substances in which The Underground Sun Storage project gas system as a whole, and with their vast storage economic environment. Simulation tools developed energy is stored. is investigating the storability of hydro- capacity (more than 8 billion cubic metres in Austria, in the course of the project were calibrated by compa- equivalent to 92 terawatt hours), their role in the ring the results of the laboratory tests, simulations gen as an additive to natural gas / energy system of the future could change significantly, and the field trial. They will make it possible to synthetic methane in pore reservoirs.“ since they can be used to store and balance supplies investigate many other structures around the world of renewable energy. in the same way.

30 / RAG COMPANY PROFILE / 31 A sustainable carbon cycle

Renewable natural gas Electricity Elektrolysis CO CH Underground 2 4 H2 Water utilization

Energetic utilization Sun Conversion Electricity generated by solar and wind power will be converted to hydrogen by electrolysis.

Geological history fast forward: over 1,000 an underground pore reservoir. This is the key to the project’s huge potential as it promises to provide the metres below ground, where natural gas ©BOKU urgently needed flexibility that renewable energy formed millions of years ago, a microbiological currently lacks. It holds out the promise of achieving the process for producing renewable natural gas is creation of a sustainable carbon cycle. Micro-organisms convert injected being tested for the first time. It will permit the Laboratory tests, simulations and scientific field tests are hydrogen (H2) and carbon dioxide (CO2) into renewable natural gas organic, renewable production of natural gas. being carried out at an existing RAG reservoir in collabo- (CH4) and water (H2O). ration with a group of project partners. A further objective is to test whether the research results can be repeated in This unique method recreates the process by which other formations around the world. The striven findings 4 H2 CO2 CH4 2 H2O natural gas originates, but shortens it by millions of are of great importance as they could extend Austria’s years – like geological history in fast motion. A microbio- lead position in energy storage, and associated research Using existing natural gas reservoirs and development. The goal is to apply the methods logical process can transform hydrogen and CO2 into for conversion and storage of renewable energy methane – renewable natural gas – in suitable gas developed by the project – both the technology and the reservoirs. Converting the energy, increasing the energy expertise – on a global scale. density and storing it take place out of sight, in porous rock formations at depths of over 1,000 m. Austrian Climate and Benefits Manufacturing natural gas Energy Fund lead project Carbon neutral First, hydrogen is produced from solar or wind energy Initial laboratory tests conducted in the Under- and water (using power-to-gas technology) in an Renewable natural gas is carbon neutral if CO that is The problem of storing renewable energy is solved ground Sun Storage project showed that hydrogen 2 above-ground facility, and then injected into an existing already present – for example, from burning biomass by converting it into renewable natural gas. injected into the reservoir with CO is converted gas (pore) reservoir. At a depth of over 1,000 metres, in a 2 – is utilised and absorbed by the production process. into methane by microbiological processes. The relatively short time naturally occurring microorganisms This creates a sustainable carbon cycle. Use of existing infrastructure Underground Sun Conversion project was convert these substances into renewable natural gas – Infrastructure already in place can be used for the initiated on the basis of these findings, and is which can be stored in the same reservoir, withdrawn as Renewable energy becomes storable natural production process, as well as for under- being implemented by an Austrian consortium led needed at any time, and transported to consumers via Solar and wind power output fluctuates due to ground storage in natural gas reservoirs, and by RAG. The project is being financed by Austria’s the existing pipeline network. changing weather conditions, meaning that production environmentally friendly transportation to consumers. Climate and Energy Fund as part of its energy The aim of the research project is to use existing gas cannot be adjusted to demand. (pore) reservoirs as natural geological “reactors”. The research programme. methanation process and storage take place naturally in

32 / RAG COMPANY PROFILE / 33 Responsible management the Austrian Health Ministry’s quality seal for workplace health promotion; the seal for the A responsible 2016-2018 period was received in March 2016. The company offers individual working time At RAG, corporate social responsibility (CSR) and working practices models, in order to means carefully considering the economical, meet employees’ needs for flexibility. ecological and social aspects of our activities Employees also have the option of taking corporate citizen when making decisions. In addressing these various types of sabbaticals, and a range of Our company has issues we take our lead from the international part-time working arrangements are available long fostered an ISO 26000 social responsibility standard. for older employees. This gives staff the space open-door culture Our responsibilities to our employees, custo- they need to develop, as well as boosting Responsible corporate behaviour is vital to security of energy supplies in tomorrow’s world. where communi- mers, shareholders and suppliers, as well as to motivation. Careful stewardship of valuable energy resources, protecting the environment and the climate, cation thrives, and society and the environment are integral to and good relations with our neighbours are more important to RAG than ever. it is fundamental our decision-making processes. Our activities RAG’s success. are broken down into these different areas of Safety accountability, and we follow the applicable guidelines on corporate governance, compliance and integrity. All of these considerations are The safety of staff and local residents, and embedded in our policies and underpin RAG’s protecting the environment, are extremely success. important to RAG. Eliminating the potential risks and dangers facing all of the people working at RAG, and communities affected by our activities, as well as avoiding damage to Accepting our the environment, is a top priority. responsibilities to When it comes to preventing accidents, the company goes beyond merely complying with employees the statutory requirements. Its aim is zero accidents in all of its activities, and in order to achieve this RAG has established a dedicated Respectful employee relations managerial unit which systematically monitors Equal opportunities, integration and diversity adherence to its targets on the basis of the are central to RAG’s corporate philosophy. Our internal health, safety and environment (HSE) workforce brings together many different management system, and supports their nationalities, and all are treated absolutely consistent application and improvement. equally in terms of pay and career opportunities, In addition to implementing workplace safety regardless of their gender, religion, cultural measures for its own employees, RAG integrate Cutting-edge background or ethnicity. the external companies into its safety-related process enginee- initiatives. Through clear processes, efficient ring, highly An inspirational work environment communication, defined policies and instruc- efficient plants We are committed to providing our employees tions, RAG can also provide these employees and some of the with excellent, flexible and safe working with the best possible protection of health and most stringent conditions, and an environment that supports safety. safety standards them in making the best use of their abilities All of RAG’s processes are designed to anywhere in and promotes their development. maximise environmental soundness. Particu- Europe, as well as RAG invests in staff development programmes larly close attention is paid to minimising dedicated, and training including health education energy use and emissions, use of waste experienced staff courses. An in-house health promotion avoidance technology, and new methods for ensure that scheme offers employees a selection of free continuous surveillance and testing of plant security of supply courses, such as nutrition, exercise and and pipelines. is engrained in relaxation programmes, as well as initiatives our day-to-day that reflect the latest health-related trends. The operations. company also works closely with healthcare facilities and doctors. RAG has been awarded

34 / RAG COMPANY PROFILE / 35 Taking a responsible approach Efficient use of energy to the environment and resources

Research into groundbreaking technology We attempt to use and distribute the energy required for Working for a future of secure, sustainable and affordable our operations as efficiently as possible. The commissio- energy supplies, while also reducing greenhouse gas ning of combined heat and power (CHP) plants in emissions and improving energy efficiency, is one of the Strasswalchen and Kremsmünster has enabled us to biggest challenges facing the world today. For years, make particularly efficient use of electricity and heat RAG, Austria’s biggest energy storage company, began from our production and storage facilities, and to inject focusing on decarbonisation and the transformation of energy into the public grid. the energy system. A project to reduce vehicle emissions has been in place In cooperation with several partners, RAG has initiated for several years. This involves upgrading the vehicle and conducts research into the production of renewable, fleet so that it is predominantly made up of gas powered carbon neutral natural gas, and storing it in natural gas vehicles, and establishing the necessary filling station reservoirs in an environmentally friendly manner. This infrastructure. This move will sharply reduce carbon means that in future it may be possible for large quantities dioxide emissions compared with conventional fuel Environmental of renewable energy, such as wind and solar power, to types, and eradicate emissions of fine particulates. The protection be converted into gas, and transported and stored using aim is to make it simpler for RAG employees and existing gas infrastructure. customers, and the general public to switch to environ- mentally friendly and affordable technology. When constructing facilities, RAG takes preservation of operate, has always been an article of faith for RAG. The the natural environment into account at the planning company engages in detailed discussions with stake­ stage, as part of the environmental analysis. Locations holders in order to minimise the environmental and are carefully selected, with the amount of land used as social impact of its activities. Constant communication well as emissions and damage to the landscape kept to with local authorities, public agencies and key local an absolute minimum. The land is restored to its previous institutions is essential to building solid partnerships. state once the project has been completed. When it Ongoing efforts to improve this dialogue with stakeholders comes to constructing permanent facilities such as those are aimed at strengthening trust in the company and its for gas storage, RAG is committed to creating compensa- operations. tion areas. We also aim to continually expand cooperation with public authorities, nature conservation experts, planners, local authorities and landowners, and to take account of their requirements and interests from an early stage. Dedicated to local communities A fair partner and a good neighbour Throughout its history, RAG’s activities have promoted regional economic growth, and as a major employer and orderer, the company makes RAG has a strong reputation for forging long-term an important contribution to the Austrian economy. relationships with its contractual partners and suppliers. Guided tours of facilities, open days and partner­ Fair and proper business dealings, integrity and trans­ Reusing natural reservoirs ships demonstrate the strength of RAG’s commit- parency are central to these partnerships. This includes ment to the regions where it operates. The company a strong commitment to working with companies that carries out regular training and drills with local respect and operate in line with RAG’s corporate philoso- Thanks to the use of depleted natural gas reservoirs as gas storage facilities, in the past few years RAG has volunteer fire brigades, and offers paid internships phy. Adherence to internal compliance rules designed to made a key contribution to European security of supply. About half of the gas reservoirs discovered in the and supervision of master’s theses for students prevent corruption is underpinned by staff training, the company’s 80-year history have now been converted into storage facilities and thus enabling a sustainable at the University of Leoben. RAG also supports four-eye principle and an internal control system. energetic use – a track record unmatched anywhere in the world. various regional social projects. Responsible treatment of all stakeholders, especially residents and local authorities in the areas where we

36 / RAG COMPANY PROFILE / 37 History

1935 1963 2001 2011 Rohöl-Aufsuchungs Aktiengesellschaft (RAG) is formed Commercial natural gas production begins in Upper RAG makes its first sales of gas to The Haidach II, 7Fields I and Aigels- on 15 October as Rohöl-Gewinnungs AG by Socony Austria. Numerous gas fields are subsequently discovered Germany and Italy. brunn gas storage facilities are Vacuum Oil Company, Inc. (now Exxon Mobil Corporation) – today they are used as gas storage facilities. completed. The total capacity of gas and N.V. de Bataafsche Maatschappij (now 2002 storage facilities operated by RAG plc). 1978 The Austrian gas market is liberalised, reaches approximately 5 bn cu m. Opening of the Kremsmünster Krift tank farm, required in accordance with the Natural Gas 1936 to comply with the Oil Stockholding and Reporting Act. (Amendment) Act. 2013 RAG drills its first deep well, RAG 1, in Marchfeld, Lower Capacity at the Puchkirchen storage RAG establishes RAG Energy Austria 1979 facility is expanded to 700 mn cu m. Storage GmbH, a wholly-owned RAG concludes a master agreement with subsidiary responsible for marketing 1938–1945 Oberösterreichische Ferngas GmbH. 2005 capacity at storage facilities. Austria’s annexation by in 1938 drastically An agreement is signed for changes the legal and economic framework in which the 1982 construction of the Haidach storage 2014 company operates. In 1941 all of RAG’s property is Construction of RAG’s first gas storage facility, at facility, and work begins on the Formation of wholly-owned subsi- declared “enemy assets”, leaving the company with Puchkirchen, with a working gas capacity of around largest project in RAG’s history. diary RAG Energy Drilling GmbH. nothing but a few fields. 40 million (mn) cubic metres (cu m). The facility is a joint venture with Commissioning of phase two of the Gazprom Export and Wingas. 7Fields facility. 1945–1955 1989 Total capacity of gas storage The Soviet Mineral Oil Administration controls RAG’s The Berndorf field marks the first commercial gas 2007 facilities operated by RAG reaches production in Lower Austria. In 1946, former German discovery in Salzburg Province. The Haidach I storage facility opens 5.8 bn cu m. assets (banks and the iron, steel, chemical and oil with storage capacity of 1.2 bn cu m. RAG’s first public natural gas filling industries) are nationalised, including large parts of RAG, 1992 Capacity at the Puchkirchen storage station, between Puchkirchen and which are transferred to the newly established OMV Rohöl-Aufsuchungs Ges.m.b.H. is converted into an facility is expanded to 850 mn cu m. Gampern, is opened. between 1955 and 1957, under the Austrian State Treaty. Aktiengesellschaft (stock corporation). EVN Energie As compensation, RAG receives concessions in Upper Versorgung Niederösterreich acquires 50 % of the 2008 2015 Austria, Salzburg and Styria. RAG and the Austrian shares, with Mobil Oil Austria and Shell Austria AG each Work starts on the final expansion The test storage facility to be used in government conclude four exploration and production taking 25 % stakes. phase at Puchkirchen, to bring the Underground Sun Storage agreements. storage capacity to 1.1 bn cu m project opens in Pilsbach, Upper 1993 and withdrawal capacity to 520,000 Austria. 1956 EVN transfers its interests to the newly formed cu m/h. RAG’s first discovery well, Puchkirchen 1, is drilled, RAG-Beteiligungs-Aktiengesellschaft (RBG), in which Construction of the 7Fields storage 2017 marking the start of oil development in Upper Austria. Bayernwerke AG acquires a 40 % holding, and SAFE and facility begins – RAG’s largest The country’s first LNG filling station Steirische Ferngas Ges.m.b.H. each take 10 %. project to date. opens at the Ennshafen port in 1958 Upper Austria. RAG signs a supply agreement with Lower Austrian gas 1997 2009 RAG establishes RAG Exploration & supplier Niogas (now EVN). The largest ever gas discovery in the Austrian section of RAG Austria joins the new Austrian Production GmbH, focusing on oil the Molasse basin – around 4 billion (bn) cu m – is made gas exchange. production. at Haidach in Upper Austria. 2010 2018 The final expansion phase of the Change of company name from Puchkirchen storage facility comes Rohöl-Aufsuchungs AG to onstream, bringing capacity to RAG Austria AG. 1.1 bn cu m. Commissioning of the pilot plant Underground Sun Conversion.

38 / RAG COMPANY PROFILE / 39 Executive Board Legal information

Markus Mitteregger, Chief Executive Officer Published by RAG Austria AG, Schwarzenbergplatz 16, 1015 Vienna Michael Längle, Chief Financial Officer Pictures: RAG archives, steve.haider.com, Karin Lohberger Photography and fotolia.de Kurt Sonnleitner, Chief Technical Officer Last updated: September 2018

Subsidiaries, associates and joint ventures

RAG Energy Storage GmbH RAG Energy Drilling GmbH RAG Exploration & Production GmbH Silenos Energy GmbH

Joint Ventures

Haidach storage facility 7Fields storage facility

40 / RAG COMPANY PROFILE / 41 RAG Austria AG Schwarzenbergplatz 16 1015 Vienna, Austria [email protected] www.rag-austria.at