Nord Stream 2. Part of a long-term solution for European energy security >

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1 Nord Stream 2 Part of a long-term solution for European energy security >

2 Commercial decision by leading energy companies > 50 % 10 %* 10 %* 10 %* 10 %* 10 %* * prospective shareholders 2

3 Routing options > 3

4 Nord Stream 2 preliminary project timeline > > Feasibility Study EIA Programme Consulatation Shareholders' agreement Permitting and Environmental Impact Assessments Environmental Monitoring Surveys and Engineering Procurement and Delivery, Pipe Logistics Construction and Commissioning Operation 4

5 Strong economic rationale > The EU needs to compensate the decline in domestic gas production over the next 20 years (-100 bcm) At the same time there will be a moderate increase in the demand for natural gas (approx. 40 bcm) To close the import gap of over 140 bcm additional supply infrastructure is required Nord Stream 2 will be capable of supplying additionally 55 bcm and will complement other supply routes. The pipeline is part of several required solutions The project follows on from the positive experience with the existing Nord Stream pipeline reliable, economical, environmentally responsible 11

6 Undisputed import gap > Rising demand 40 bcm + falling domestic production 100 bcm = import gap 140 bcm BCM 600 Norwegian exports Gas production in the EU of 28 Import gap (avrg.) -> 2035 = 144 bcm Norwegian export falls by ca. 20 bcm EU-28 production falls by ca. 80 bcm 0 Russian exports through existing infrastructure North Africa LNG (avrg.) Import from Russia, North Africa and LNG import constant (basis: avrg ) LNG North Afr RU EU Norway Demand Africa Source: IHS Energy Long-Term Supply and Demand Outlooks to 2040, July

7 World s largest gas reserves in strategic proximity > 9,160 44,380 4,470 13,890 29,610 46,570 8,060 14,760 16,240 Sources: BP-Statistical Review of World Energy 2010; Proven reserves are those quantities that can be recovered from known reservoirs under existing economic and operating conditions with reasonable certainty (BP) Total reserves: 187,490 14

8 Dependency on Russian gas: 6 percent of EU energy consumption > Russian natural gas holds a share of around 30 percent of the gas consumption of the EU For additional demand Nord Stream 2 will be supplying only a part: the share of Russian gas will remain unchanged. Gazprom supplies around 60 percent of its exports to the EU: the company and the state are more dependent than the EU 4 % Renewable 12 % Nuclear 27 % Coal 38 % Oil 18 % Natural Gas % Renewable 14 % Nuclear 17 % Coal 33 % Oil 23 % Natural Gas Sources: Eurostat, 2015; Eurogas Statistical Report percent: Share of Russian gas in primary energy consumption 19

9 Competitive and economic impetus > 55 bcm gas per year means: 26 million European households are supplied with energy Without liquidity through additional providers like Nord Stream 2: less competition in internal market Nord Stream 2 alone does not ensure security of supply. Supply security through competition between transport routes (e.g. LNG) ultimately the decision is made by the market About 8 billion Euro investment, an investment program for the European economy without costs to the European taxpayers Strong competition in a diversified market: Gas flows

10 Complementing not replacing Ukrainian transport routes > Nord Stream 2 is a long-term, additional transport route for additional quantities Ukrainian gas supplies to the south can not be replaced by the Nord Stream capacities Different systems will compete in terms of reliability and cost-effectiveness in the interest of security and consumers 18

11 Two parts of the solution and future competitors: Nord Stream 2 and US LNG deliveries > To fill the import gap in 2035, IHS expects Russian gas and LNG to cover most of the shortfall [IHS Energy Long-Term Demand and Supply Outlook 2015] With energy prices levels, importing LNG from the US is unlikely to be commercially viable for Europe in the short term, unless it is able to compete with other LNG and piped gas sources. [DGEXPO Analysis, European Parliament, 2016] Additional LNG up to ~68 bcm ~144 bcm Southern Corridor up to ~12 bcm Additional Russian supplies ~62 bcm (NSP2: 55bcm) "Against the backdrop of a still ailing economy and the competitive edge low energy prices have given to the U.S. industry, European consumers will remain reluctant to pay a significant "security premium" for LNG over Russian supplies." [Andreas Goldthau, German Marshall Fund, Addressing the Russian Energy Challenge: Why Regulation Trumps Geopolitics] 29

12 Contact > Nord Stream 2 AG Gotthardstrasse Zug, Switzerland info@nord-stream2.com Website: 29