2 nd Annual Gazprom Global LNG Seminar. Small Scale LNG: An Emerging Opportunity. Swissotel Krasnye Holmy, Moscow

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1 2 nd Annual Gazprom Global LNG Seminar Swissotel Krasnye Holmy, Moscow Small Scale LNG: An Emerging Opportunity Igor Maynitskiy, Gazprom Export

2 Small Scale LNG Working Group Small Scale LNG Development Supply Sources Marketing Small Scale LNG Alternative Supply LNG Bunkering NGV (CNG/LCNG/LNG) OAO Gazprom Gazprom Export GGLNG and GMT Singapore GMT France & Gazprom Germania Eugene Pronin Igor Maynitskiy Sergei Komlev Elena Gribinichenko Yegor Khokhar Tatiana Fayzullina Fred Smits Pavel Smotritsky Anna Polozova David Graebe Alexandre Bouchon Hartmut Shult Support from Pace Global Energy Services

3 Small Scale LNG markets What are Small Scale LNG Markets? LNG fueled ship LNG fueled truck Off-grid customers Why Small Scale LNG? New demand for gas expected to be hundreds of Bcma globally LNG fuel for Bunkering and NGV is cost effective and cleaner Few challenges to supplying LNG to Off-grid customers Baltic/North Sea bunkering opportunity is accessible to Gazprom

4 LNGV & LNG Bunkering Global Demand Potential (2030) Baltic/ North Seas North America Mediterranean South America LNG Bunkering demand NGV demand Total Bunkering and NGV demand could be 345 Bcma

5 MMTA Potential Global Demand for LNG Bunkering CERA Estimations Pace Global Estimations Global demand Global demand European demand Growth slow due to lack of availability of Small Scale LNG Demand growth fast if LNG is made available earlier Growth rate driven by availability of Small Scale LNG

6 LNG price in $/mmbtu LNG Price in $/mmbtu The Prize at Stake Into Ship Price as Brent Formula (Price is higher in ports such as Gothenburg or Copenhagen) Ferries Cruise RoRo Container Oil Price Parity Brent in $/bbl Historic into Truck Price in France (Includes 30% discount to diesel + tax benefit) Gazole LNG equivalent for NGVs JKM 0 апр.09 окт.09 май.10 ноя.10 SSLNG is sold at premium prices

7 European NGV Market Scenarios 2030 Europe 2010: 8.3 Bcma European NGV Development Scenarios 2030 Market share* CNG LNG Total Bcma Market share* Bcma Bcma High-case 10% 50 20% Mid-case 6% 30 8,5% Low-case 3,5% 18 5% 7 25 Growth of VLNG Heavy Duty Transport & LCNG stations Truck Companies Ready to produce LNG vehicles The lack of infrastructure and supply main problem for development High potential European countries Longer term potential countries European demand for NGV fuel could reach 80 Bcma by 2030

8 Gazprom Group s activities Engaging with potential LNG Bunkering and NGV customers/partners Participation in The North European LNG Infrastructure Project Participation in LNG Bunkering Joint Industry Project (Singapore) Active development of market entry for LNG as fuel for NGVs and Bunkering (SSLNG Working Group) 200+ CNG stations in Russia + 3 CNG stations in Europe with significant growth planned Blue Corridor project aimed at realizing international transit routes based on CNG + LNG Actively shaping the future of NGV markets through national + international co-operation

9 Consumption of Small-Scale LNG by Off-Grid Customers t/y Kaliningrad Plant (2) (4) Leningrad obl. Plants (3) (1) 0 Poland (1) Finland (2) Germany (3) Baltic region (4) at present by 2015 Existing market High potential European countries Longer term potential countries Rapid LNG consumption by Off-Grid Customers expected

10 Expanding Gazprom Market Reach Gazprom Equity Gas is a Key Competitive Advantage in Capturing Market Share Expected production capacity in Russia Prefered production LNG locations kton 140 Target market area Planned Supply vs. Potential Demand Baumgarten LNG plant We need to think bigger about Small Scale LNG

11 Developing Small Scale LNG for Gazprom Capturing the Market Analyze Markets Develop strategy that positions Gazprom for accelerated market entry Participate in pilot projects in Europe Sign non-binding agreements with potential clients Market development research Potential off-grid customers search Additional opportunities for Gazprom to enter the market in the near future Build Supply Infrastructure Expand Globally Develop Russian liquefaction plants to supply Baltic and North Seas Compliment, as needed, with LNG supply from third parties Participate in and promote infrastructure development Start with Russian coastal markets Baltic and North Sea Black Sea Expand market globally Mediterranean Sea Asia Pacific Latin America Russian LNG required for successful entry into SSLNG market