Public hearings upon the annual report on activity of the Asia Gas - - PowerPoint PPT Presentation

Public hearings

upon the annual report on activity of the Asia Gas Pipeline LLP for 2016 on rendering

• f regulated services
• n commercial gas transportation

along the Kazakhstan-China Main Gas Pipeline towards the consumers and other concerned persons

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GENERAL INFORMATION

The Asia Gas Pipeline Limited Liability Partnership (further the Partnership) was registered in February 15, 2008. Founders (Partners) of the Partnership are as follows: Trans-Asia Gas Pipeline Company Limited -50% of share in the charter capital KasTransGas Joint Stock Company -50% of share in the charter capital Legal basis for establishment of the Asia Gas Pipeline LLP: 1.Agreement between the Government of the RK and Government of the PRC – On cooperation in construction and

• peration of the Kazakhstan-China Main Gas Pipeline dated August 18, 2007 (further the Intergovernmental

Agreement). 2.Agreement – On fundamental principles in construction, in accordance with which participation of the KazMunayGas NC JSC and the China National Petroleum Corporation in the Project has been performed by their affiliates – the KazTransGas JSC and the Trans-Asia Gas Pipeline Company Limited.

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Investment program of the Partnership

The main purpose of the Investment Project is bringing of the total capacity of the First Section of the Kazakhstan-China Main Gas Pipeline up to 55 billion m3/year.

No . The main construction facilities of the Main Gas Pipeline Commencement of construction Commissioning (acceptance committee) 1 Linear part January of 2013 July of 2015 2 Cathodic Protection System March of 2014 August of 2016 3 Stationary facilities December of 2013 October of 2018 4 SCADA and Telecommunication August of 2015 November of 2018 No. Name Amount, million tenge Amount, million US dollars Utilized as of December 31, 2016, million tenge without VAT with VAT without VAT with VAT Estimate cost of the investment project, stage - Project 794 991 889 400 4 316 4 830 714 355

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Investment program, approved by the department of the competent authority

Investment program of the Asia Gas Pipeline LLP for 2015–2019 is approved by the joint order of Minister of Energy of the RK dated August 14, 2015 No.536 and Acting Leader of the Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the RK of Almaty dated July 23, 2015 No.153-ОД. Adjustment of investment program on transfer of several measures from 2015 to 2016 was approved by the order of the Department of the Committee on Regulation of Natural Monopolies and Protection of Competition dated March 01, 2016 No.39-НК.

No. Name of measures of the investment program (project) Amount of the investment program, thousand tenge Perf

• rm

ed Plan for 2016 Fact for 2016 Total amount To the domestic market Total amount To the domestic market % TOTAL 19 580 895 292 227 60 086 854 1 063 537 364 I Capital expenses upon the Project on Increase of Capacity of the Kazakhstan- China Gas Pipeline 19 371 075 289 094 59 837 524 1 059 124 366 Stationary facilities (Compressor Stations, Shift Camps, ERC, GMS): 17 697 820 264 122 51 925 069 919 074 348 Other expenses (engineering services, Designer’s Supervision) 519 261 7 749 2 891 162 51 174 660 SCADA and Telecommunication 1 153 994 17 222 5 021 293 88 877 516 II Capital investments for the purposes of keeping of current production for the Lines A and B 209 479 3 126 248 052 4 391 140 2.1 Process equipment for the Compressor Stations - 1 - 2 - 4 - 6 - 7 47 271 705 52 272 925 131 2.2 Safety signs 157 249 2 347 161 979,5 2 867 122 2.3 Metal containers 4 959 74 33 800 598 808 III Capital investments of administrative character 341 7 1 278 23 307 Emergency Recovery Service-4, annually 341 7 1 278 23 307

The main financial-economic indicators of activity Consolidated balance report

Balance indicators As of Decemb er 31, 2015, million tenge As of December 31, 2016, million tenge Short-term assets 530 265 528 089 Long-term assets 1 696 978 1 788 741 Short-term liabilities 323 796 321 501 Long-term liabilities 2 866 985 2 466 567 Capital (871 775) (563 002)

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Report on profits and losses

Certain report on joint revenue

Revenues from rendering of services on gas transportation 549 728 224 Prime cost of services on gas transportation 112 409 890 Gross profit 437 318 334 General and administrative expenses 4 533 182 Profit from the operating activity 470 913 230 Other revenues 38 141 520 Other expenses 13 442 Financial expenses 85 771 582 Financial revenues 4 512 769 (Loss)/profit before taxation 389 654 417 Economy/(expenses) upon income tax 80 881 044 Net (loss)/profit for the period 308 773 373 Total joint (loss)/revenue for the period excluding the income tax 308 773 373

• Consumer of regulated services is the KazTransGas JSC. In 2016, the services were rendered within the Contract on

rendering of services on commercial gas transportation with the KazTransGas JSC in accordance with the Standard Contract of the Agency on Regulation of Natural Monopolies. The work on confirmation of volumes of accepted and handed over gas and signing of the relevant documents was executed during the year between the Consumer and Service supplier.

• Acceptance of gas from the gas shippers was carried out on the border of Uzbekistan-Kazakhstan, and handing over on the

gas metering stations, belonging to the ICA on branch-gas pipelines in the regions of the Ak Bulak TIP-01, Akyrtobe TIP-02 and Uzyn-Agash TIP-03.

VOLUME OF REGULATED SERVICES

Name of indicators Total Gas offtake to the RK, million m3 1 047 117,819 including: along the TIP 01 (310 km) 265 970,896 along the TIP 02 (557 km) 21,047 along the TIP 03 (945 km) 781 125,876

0 km km Uzb Uzbekist stan GMS GMS 69 69 km km Bor Border with China China 13 1305,85 km km

CS CS 4 ERC ERC and GTA TA 597.6 km km CS CS 1 164.8 km km CS CS 2 ERC ERC and GTA TA 349 349 km km КС 6 881 км CS CS 7 ERC ERC and GTA TA 1121 1121 km km Sh Shu Gas Di Distribution St Station 726 726 km km Otar Gas Di Distribution St Station 844 844 km m Uzynagash Gas Di Distribution St Station 94 945,84 km km Kairat Gas Di Distribution St Station 1029 1029 km km Malovodnoye Gas Di Distribution St Station 1059 1059 km km Sh Shelek Gas Di Distribution St Statio 1116 1116 km km Sh Sharyn Gas Di Distribution St Statio 1198 1198 km km Zh Zharkent Gas Di Distribution St Station 1265 1265 km km Ak Akbulak offtake point 310 310 km km Uzynagash

• fftake point

94 945,84 km km DN DN 813 813 mm mm

Route of the Kazakhstan-China Main Gas Pipeline

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In accordance with the item 1 of the Order of Chairman of the Agency of the Republic of Kazakhstan on Regulation

• f Natural Monopolies – On making supplement to the order of Chairman of the Agency of the Republic of

Kazakhstan on Regulation of Natural Monopolies dated January 24, 2005 No.16 – ОД – On republican section of the State register of entities of natural monopolies dated April 23, 2012 No.89 – ОД, the Partnership is included to the Republican section of the State register of entities of natural monopolies. According to the order of Chairman of the Agency of the Republic of Kazakhstan on Regulation of Natural Monopolies dated April 23, 2012 No.89 – ОД, the regulated type of the Partnership’s services are the services on commercial gas transportation along the main gas pipelines. Tariff estimate for regulated service on commercial gas transportation of the Partnership was approved and the tariff was determined in the amount of 3 494,4 tenge/1000 m3 with coming into force from March 01, 2016 by the order of the Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan of Almaty No.217-ОД dated October 20, 2015. Performance of tariff estimate for services on commercial gas transportation along the Kazakhstan-China Main Gas Pipeline for 2016 was developed based on financial statement of the Asia Gas Pipeline LLP for 2016. Actually formed indicators of tariff estimate are confirmed by the following documents:

• Minutes on approval of the results of purchase of the Commodities and Materials/services/work;
• Contracts on supply of the Commodities and Materials/services/work, concluded for 2016;
• Acts of executed work/services, writing-off of the Commodities and Materials, acceptance-handing over of the

Commodities and Materials, invoices.

PERFORMANCE OF TARIFF ESTIMATE

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Item-by-item performance of tariff estimate

No. Tariff estimate indicators Approved Performed Deviation I Expenses for production of the goods and rendering of services, total 1 652 278 1 898 459 15% including: 1 Material expenses, total 243 095 247 418 2% including: 1.1 Raw and materials 157 668 326% 1.1.1 HSE materials 157 668 326% 1.2 Purchased items (gas for own needs and losses) 241 049 241 844 0,3% 1.3 Fuel and Lubricants 429 4 906 1 044% 2 Expenses for labor remuneration, total 35 043 55 063 57% including: 2.1 salary of production staff 31 886 46 437 46% 2.2 social tax and social expenditures (social insurance) of production staff 3 157 8 627 173% 3 Depreciation 933 576 1 009 766 8% 4 Repair 6 633 7 674 16% 5 Other expenses 435 391 578 537 33% II Expenses of the period, total 474 108 1 510 175 219% including: 6 General and administrative expenses, total 32 001 45 004 41% including: 6.1 Expenses for labor remuneration 10 543 21 329 102% including: 6.1.1 salary of administrative staff 9 594 17 552 83% 6.1.2 social tax 950 3 776 298% 6.2 Taxes 813 954 17% 6.3 Other expenses 20 645 22 721 10% 7 Expenses for payment of remunerations 442 107 1 465 172 231%

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ACTIVITY PERSPECTIVES

The main direction of the Partnership’s activity is provision of reliable and safe transportation of natural gas in set volumes, at keeping of financial stability of the company at the stable level, i.e. the Partnership shall perform transportation the supplied gas volumes, not allowing situations, hazardous for people and environment, herewith, providing optimal indicators of production-economic activity. Fulfillment of this purpose supposes provision of reliable and safe transportation of gas by as follows: 1. Non-allowance of accidents; 2. Increase of efficiency of use of gas for own needs; 3. Optimization of production processes and charges and, consequently, increase of efficiency of the main gas pipeline operation. In course of the projects implementation period, the Partnership intends for:

• Keeping of set level of natural gas transportation;
• Increase the level of operation safety: provision of absence of injury rate and incidents at the gas pipeline

facilities, emergency situations, which lead to shutdown of production and incurring of ecological damage;

• Increase efficiency of gas pipeline operation;
• Increase efficiency of energy resources use (process gas, power, water etc.);
• Provision of keeping high labor productivity and improvement of staff qualification.

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THANK YOU FOR YOUR ATTENTION!