RAG’s core businesses are oil and gas exploration and production, and gas storage. These activities are concentrated in Austria and Germany. Our crude oil is processed at refineries that are close to our production sites. Some of our natural gas output is consumed in our region and the remainder is marketed elsewhere. RAG also has international gas trading operations, and supplies domestic and foreign energy companies and industrial consumers. We specialise in providing flexible and secure supplies of oil and gas produced from domestic reserves.
In the past, RAG’s gas output was sold almost exclusively to the company’s owners. This was in the days before gas market liberalisation, when contract design and fulfilment were still a simple matter. The pace of change has been rapid since then. The EU’s energy liberalisation efforts, initiated in 1998, have opened up the gas markets in large parts of Western and Central Europe, and traders and suppliers can now buy and sell gas on increasingly liquid exchanges and trading platforms. As a result of gas market liberalisation in 2002, RAG was able to market its gas production outside Austria and the focus switched away from sales at entry points to the national low pressure grid, towards exports via virtual trading points. RAG has since made a name for itself as an agile, independent company. In 2002 our natural gas sales topped one billion cubic metres for the first time. We have progressively built up a trading and supply department which operates on markets throughout Europe. RAG is a member of a number of European gas hubs and exchanges. EU-wide gas liberalisation and the creation of entry/exit systems have opened up new trading opportunities.
With pricing increasingly decoupled from oil and driven by spot quotations, the influence of European trading points and exchanges is steadily growing. The resultant price volatility is making supply portfolio construction and risk management more challenging.
RAG also produces and supplies liquefied natural gas (LNG) for use as a low-carbon fuel or to make gas available to isolated industrial and commercial consumers.
„Security of supply is the core issue for the energy sector. That’s our mission, too, and we are unconditionally committed to it. When everything is running, people tend to forget how vital total security of supply is in an emergency. But it’s important to remember that when needed, our Haidach, 7Fields and Puchkirchen gas storage facilities push out 30,000 megawatts of energy! We supply the regional utilities – we are the backbone of their services. Our storage facilities have to keep functioning, come what may, and be ready to spring into action at any time. That’s our day-to-day business, but it shouldn’t be taken for granted. There’s a lot of high tech behind the scenes.”
Markus Mitteregger, Chief Executive Officer, RAG