SHV Energy

SHV Energy is a leading global distributor of off-grid energy, including LPG and small-scale LNG. The company is also active in sustainable fuels and renewable energy. With products and services predominantly used for heating, cooking and transport, SHV Energy provides decentralised, low-carbon, and clean energy solutions to 30 million business and residential customers in 23 countries across four continents. Brands include Calor, Ipragaz, Liquigas, Pinnacle, Primagaz, Xiwei, and Supergas.

The company’s main goal is to make relatively clean and safe energy options accessible and affordable to as many customers and companies as possible. To meet increasing demand, it is constantly looking for cleaner and economic energy sources, while also meeting the challenge of climate change with innovative solutions that contribute to a more sustainable and environmentally-friendly future. The provision of cleaner energy alternatives and partnerships with communities also contribute to securing and growing a sustainable business.

The strategy of ‘Advancing Energy Together’ supports growth, efficiency, and sustainability across all brands. The aim is to activate the full potential of the company through increased international collaboration; leverage shared opportunities; and identify and solve common challenges through a combination of organic growth, add-on acquisitions, geographic expansion, productivity improvement, and advocacy for—and promotion of—sustainable fuels.

The economic recovery, together with a regular cold winter in both Europe and the USA, resulted in a sustained high demand for LPG. The supply side was more volatile, with storms impacting LPG production capacity on the US Gulf Coast and low refinery utilisation rates in Europe. This imbalance resulted in a continuous increase in LPG prices, before the new Omicron variant and bearish macroeconomic data for the USA and China began to reverse the trend.

Similar trends occurred in the LNG sector. In Europe, the increase in supply was outpaced by a double-digit rise in demand as most US LNG cargoes were shipped to Asia, leaving regional storage levels low. The ongoing geopolitical uncertainty around the Nord Stream pipeline from Russia to Germany has also had a significant impact on LNG prices, which almost quintupled in 2021.

In the second year of a global pandemic, many economies started to recover and grow in the wake of vaccination programmes. SHV Energy benefitted from the rise in industrial and commercial activity, with the partial normalisation of travel and the easing of restaurant lockdowns driving Hospitality and Autogas sales. At the same time, the company continued to benefit from strong domestic sales volumes: partly driven by a regular winter and fresh spring weather in Europe, and partly by people working and cooking at home more often. Although the cost of gas significantly increased in the first part of the year, margins remained strong across the board. Automotive LNG sales volumes also increased in most countries.

2021 marked a year in which SHV Energy took significant steps towards its objectives for renewable solutions and sustainable fuels. SunSource Energy was acquired, an Indian-based solar solutions company delivering mid- to large-scale solar projects for commercial and industrial customers. A process to set up a joint venture with UGI, to develop rDME, a sustainable molecule that will help to de-fossilise the LPG industry, is underway. A joint venture was also established with KEW Technology to begin the first industrial rDME production in 2022.

SHV Energy took steps to rebalance its portfolio with the divestment of Primagaz in the Netherlands and Balcas, a non-core sawmill and wood pellet producer in Ireland. At the same time, the company finalised a density acquisition in the US to drive further synergies, while also taking new opportunities to strengthen positions in growth countries.

SHV Energy continues to invest in innovative solutions including new services; business models; processes; and technologies aimed at bringing consistency across business units to improve efficiency and increase customer satisfaction.

One key project over the year involved the manufacture of smart cylinders to unlock new value propositions. In Brazil, a large pilot scheme was rolled out to 1,500 customers offering a new pay-per-consumption model, which uses a connected device to remotely monitor gas consumption. Unique in the global LPG industry, the model is now being evaluated for implementation in China. To improve efficiency, a new analytical model was also developed to optimise the planning of cylinder deliveries in France. This has now been implemented across all depots and is expected to generate significant savings.

Operational performance considerably improved in 2021. Total volumes increased compared to 2020 due to the release of COVID-19 restrictions having a positive effect on both industrial and commercial segments, especially in Europe and Asia, combined with stable high domestic volumes in particular in Brazil. Higher margins as result of the well-positioned hedge portfolio and active cost management also contributed to strong results.

High demand for LPG

Sustainable fuels