CONNECTING THE ENERGY OF TOMORROW

Transcription

1 CONNECTING THE ENERGY OF TOMORROW ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT 2016

2 KEY POINTS CONTENTS Profile 01 The GRTgaz network Interview of Thierry Trouvé, CEO 04 The Management Committee & Governance 06 GRTgaz 2020 corporate project 08 The framework of our operations 10 Investment and regulated tariffs 12 Key points PROFILE 01 CONNECT SECTORS WITH ENERGIES Drive the growth of renewable energies 16 Reduce industrial emissions 18 Develop the circular economy 20 Preserve air quality through natural gas for vehicles 22 Exemplary environmental conduct 24 GRTgaz is a European leader in natural gas transmission, a world expert in gas transmission networks and systems, and an operator firmly committed to the energy transition. It owns and operates the gas transmission network throughout most of France and it manages the transmission network in Germany, thereby helping to ensure correct operation of the French and European gas market. It contributes to the energy security of regional supply systems and performs a public service mission to ensure the continuity of consumer supply. 2,916 EMPLOYEES 600 M INVESTED 1,993 M REVENUE CONNECT TERRITORIES WITH MARKETS Secure access to gas 28 Facilitate access to market 32 A single marketplace in Pending the merger The energy transition must reconcile secure supply and reducing greenhouse gas emissions with increased competitiveness. By connecting energies and regions with great care for the environment and countryside, by driving the growth of renewable energies and new uses for gas, by creating synergy between electricity and gas systems, we deliver innovative and accessible solutions to accelerate and secure a successful energy transition. 1,159 M EBITDA 384 M NET INCOME FROM RECURRING OPERATIONS CONNECT TERRITORIES WITH SKILLS, TALENTS AND IDEAS TO SHAPE THE FUTURE Support: local and regional authorities 38 Listen: advice from stakeholders 40 Explain: the Natural Gas Economy chair 41 Co-develop: customer relationships 42 Monetise: APCA-FNSEA convention 43 Share: partnership with the Federation of Regional Nature Parks 44 Innovate: First Open Innovation Challenge 48 Anticipate: partnership with the national education system 50 Secure: 15 th edition of the OPPBTP-GRTgaz Safety Awards NETWORK ACTIVITY : activity on the GRTgaz network 54 Environmental, social and societal data 56 Financial data 58 Your local GRTgaz representatives 60 1

3 OUR CUSTOMERS 131 SHIPPERS 19 DISTRIBUTION NETWORK OPERATORS CONNECTED 764 ACTIVE INDUSTRIAL CUSTOMERS, INCLUDING 13 NATURAL GAS-FIRED POWER PLANTS IN TWh TRANSMITTED 906 TWh TRADED AT GAS TRADING POINTS Our network THE GRTgaz NETWORK 2016 A safe, efficient, environmentally friendly way of transmitting, exchanging and storing large quantities of energy. DISCREET Our underground pipelines, whose presence is only shown above ground by yellow markers, blend in with the environment to respect local residents, local activities, the scenery and biodiversity. CONNECTED Our network is connected to the LNG terminals on the Atlantic, North Sea and Mediterranean coasts, to the Norwegian, Belgian, and German transmission networks, to the Italian network via Switzerland, to the Spanish network via the TIGF network and to underground storage facilities, providing access to diversified gas sources. This facilitates energy trading between countries and helps to build an integrated, efficient and competitive European energy market. POWERFUL Our network can instantaneously supply a power level 50% above that of the electricity transmission network during periods of peak consumption. TRANSPARENT Available on smartphones, our GRTgaz+ application provides full data on our network activities to anyone, anywhere. EFFICIENT Our network consumes less than 0.4% of the energy that it transmits and emits less than 1.4 g of CO 2 equivalent per kwh transmitted. On average, transmission represents 8% of the end consumer s gas bill (incl. VAT). UNITED KINGDOM Bréal Elengy SPAIN National Grid Nozay Dunkerque LNG Fontenay- Mauvoisin Cherré Auvers le-hamon Roussines Brizambourg Castillon ENAGAS Chazelles Laprade TIGF Dunkirk BELGIUM Alveringem Pitgam Arleux-en- Gohelle Beynes Évry-Grégy Cuvilly Saint-Victor Cruzy Gassco Vindecy Taisnières Dierrey- Saint-Julien Saint-Avit Courthézon Fos- Tonkin Elengy Fluxys Obergailbach Laneuvelotte Morelmaison Voisines Palleau Étrez Saint-Martinde-Crau Entre- Deux- Guiers La Bégudede-Mazenc Montoirde-Bretagne Fos- Cavaou Oltingue Swissgas Fosmax LNG SWITZERLAND Gaznat GERMANY Fluxswiss SNAM GRTgaz Deutschland Open Grid Europe ITALY CERTIFIED Our gas transmission and delivery, tanker transport and odorisation activities are ISO 9001 and ISO certified. Our natural gas compression and interconnection infrastructure design and construction activities are ISO (1) certified. Our footprint management and our actions in favour of ecosystems are recognised under the French national strategy for biodiversity. Transmission network (France) Transmission network (Germany) 28 compressor stations (France) 616 MW of installed capacity 7 interconnections with adjacent networks 4 interconnections with LNG terminals Direction of natural gas flow (1) 23 out of 28 compression stations in service. 6 compressor stations (Germany) Participation in Megal (1,161 km of high-pressure pipelines) Adjacent transmission and LNG terminal operators 2 Key points 3

4 Interview SPEEDING UP THE TRANSFORMATION Interview with THIERRY TROUVÉ Chief Executive Officer How would you sum up 2016? 2016 was a very positive year for GRTgaz. Workplace safety and industrial safety reached historically high levels. We have continued to streamline our offer and improve our quality of service. Growth in the volume of gas transmitted over our network is approaching 6% net of weather effects, driven by industrial operator consumption (+16.3%) which is mainly a result of electricity production. Gasfired power plants have stepped in to replace nuclear plants on shutdown and have supplemented wind and solar production with the maximum amount of flexibility and minimum emissions. Gas trading on our grid grew by 20%. We successfully brought the 300 km Arc de Dierrey gas pipeline online within deadline and budget, to carry regasified LNG unloaded at Dunkirk to the east and south of France. Our latest major investment, the Val de Saône programme, was launched with the objective of creating a single marketplace in France by the end of The new tariff was published by the French NRA - National Regulatory Authority (CRE). As it does not weigh heavily on the cost of transmission, it enables us to promote and develop renewable gas sources, new gas uses and complementary activities with other energies. In parallel, we finalised GRTgaz 2020, our corporate project for the next four years. In this new energy world, complementarity between electricity and gas systems will play a key role. What does GRTgaz 2020 aim to do? This project marks a turning point for us. Since 2005, we had been fully occupied with an incomparable infrastructure development plan. Now we must ensure our network serves the energy transition. Our objectives for 2023 and 2030 foresee a more economical, greener and more interconnected world. This world is characterised by the growth of renewable energies, the development of decentralised production and consumption, the increasing role of regional and local authorities, and new possibilities offered by digital technology and smart grids. In this new energy world, complementarity between electricity and gas systems will play a key role. This is the meaning behind our new tagline: Connecting the energy of tomorrow. Our business strategy will rise to meet these challenges. We aim to make GRTgaz a player fully committed to the energy transition and an operator acknowledged as a European leader in gas infrastructures. How is your commitment to the energy transition firming up? Above all, our efforts to inform users and show how gas contributes to reducing CO 2 emissions, particles and pollution must be continued and amplified. This applies to heating, industrial applications, transport and electricity production. We help regional authorities plan their energy strategies, budgets and environmental programmes. We deliver our skills and our data. In 2016 we signed a partnership with the Association des Régions de France, representing France's regional authorities, to foster sharing of best practices. We encourage our industrial customers to reduce their CO 2 emissions by using natural gas. Conversions over the past five years reduced CO 2 emissions for 2016 by 1.4 million tonnes, or the equivalent of 8,000 2-MW wind turbines. We fully support the deployment of public NGV fuelling stations. We have joined forces with Sigeif Mobilités, a semi-public company, to build a dozen such stations in the Île-de-France region. We support project owners seeking to convert household, agricultural or industrial organic waste into biogas and inject it into our grid. In 2016 we signed a convention with the French national farmers' union (FNSEA) and the chambers of agriculture to encourage agricultural biogas production. We are preparing future activities with the Jupiter 1000 demonstrator, which analyses the synergistic management of electricity and gas grids by storing surplus renewable electricity in the form of hydrogen or synthetic methane. Industrial agreements were signed in 2016 with eight partners, including transmission grid operator RTE. We are also joining forces with start-ups to make innovative use of data, identify operational levers and support our activities in the maintenance and performance of the gas system. What are your ambitions for Europe and international markets? We intend to develop our gas infrastructure operator activities in Europe. We are already active in Germany in a strategic corridor for the transmission of gas from Russian fields to France and southern Germany. We are fully open to other opportunities. The project to acquire Elengy, which owns and operates the LNG terminals in Fos-sur-Mer and Montoir-de-Bretagne, would strengthen our position in Europe. A memorandum of understanding was signed in January 2017 with ENGIE and SIG. Outside of Europe, we monetise our know-how through the delivery of services. Many countries use gas to meet their fast-growing energy requirements. Forecasts indicate that gas consumption in non- OECD countries should double (1) by We can help these countries to built robust infrastructures and efficient gas networks. (1) In relation to International Energy Agency - International Energy Outlook Key points 5

5 THE MANAGEMENT COMMITTEE At 1 May 2017 THIERRY TROUVÉ Chief Executive Officer OLIVIER AUBERT Chief Strategy and Marketing Officer GOVERNANCE A limited company set up in 2005, GRTgaz is almost 75% owned by ENGIE, with about 25% owned by Société d lnfrastructures Gazières (a publicly owned consortium comprising CNP Assurances, and Caisse des Depots) and 0.35% owned by employee shareholders. Functions of the Chairman of the Board of Directors and Chief Executive Officer are separated. Board members are appointed for five-year terms. The board member charter sets out each member's rights and duties. The Board of Directors is made up of 17 members: 14 board members appointed by the General Shareholders' Meeting: - 9 representatives of the ENGIE group; - 3 representatives of Société d'lnfrastructures Gazières; - 2 independent board members. 3 board members representing salaried employees. With a 41% share of women (seven of the 17 members), the Board of Directors is compliant with the Copé-Zimmerman law. The following persons also attend board meetings, but without voting rights: Commissioner from the French government; CEO of GRTgaz; Representative of the central Works Council; Compliance officer (Art. L of the French Energy Code). Three consulting committees support the Board of Directors: The investments committee examines investment policy and delivers an overall opinion on investment plans; The audit committee ensures that accounting methods are appropriate, examines the accounts and financial plans and delivers an overall opinion of their fair representation, evaluates the efficacy and quality of the internal control process, examines significant risks and commitments on which it can issue an opinion, in particular in light of the provisions applicable to an independent transmission network operator; The remunerations and selection committee examines and delivers an opinion on the remuneration of the board members and the CEO, while consulting on candidates for these positions. PIERRE ASTRUC General Secretary PIERRE DUVIEUSART Chief Financial Officer JEAN-JACQUES CIAZYNSKI Chief Operating Officer RÉMY COIN Director of Legal Affairs HERVÉ RAMBAUD Director of Human Resources 6 Key points 7

6 GRTgaz 2020 CORPORATE PROJECT A COLLECTIVE APPROACH 3 seminars organised by General Management, 400 managers consulted on the DNA of GRTgaz and its values, 11 work groups tasked to defined strategic objectives, 7,000 contributions posted on GRTgaz social media, 3,000 firm proposals for action by in-field teams. A CONTINUOUS APPROACH In 2017, employees will contribute to our project by posting their proposals in the Participative Workshops sharepoint devoted to GRTgaz 2020 on our dedicated intranet. FIVE VALUES TO MOVE FORWARD INNOVATION Step outside the box and feel safe making mistakes in seeking out new solutions; get a different perspective on the situation; look to the future in a positive light. Be inquisitive and audacious. MEN AND WOMEN We put our customers at the centre of our activities. We develop cooperation, initiative and innovation. We are all ambassadors for natural and renewable gas. We foster diversity within the company. BUSINESS We are improving our economic and technical performance. We are speeding up our adoption of digital technology and become a smart company for our customers. We develop green gases, complementarity to other energies and new uses for gas. We are becoming a major player in European gas infrastructures OBJECTIVES 50% reduction in main grid unavailability. Boost scores on the workforce survey by five points for the following themes Customer, Understanding of issues, Perception of teams and Diversity. Train all employees in the Gas Ambassador MOOC OBJECTIVES Raise our sales capacities by 50 GWh/day. Connect 16 new biomethane sources and five backhaul flow stations. Reach the goal of 250 NGV fuelling stations in France. Complete a development project of Europe-wide scale. OPENNESS Listen, be attentive to others and our environment, work together, challenge ourselves and question our assumptions, embrace diversity and change. RESPONSIBILITY Recognise and be accountable for the consequences of our decisions and actions, while understanding our prerogatives; consider the public interest and future generations. EXCELLENCE Achieve just the right performance for GRTgaz activities, with genuine peer comparison. TRUST Work together and with partners in a relationship of cooperation, transparency, sincerity and respect. Foster individual initiative and commitment. Share information. Practice what we preach. RELATIONS WITH OUR ECOSYSTEM We promote and develop mature and emerging gas chain activities contributing to the energy transition. We work closely with start-ups for this purpose. We collaborate with regional and local authorities as well as European institutions to secure an appropriate role for natural and renewable gas in the energy transition. We are exemplary in our environmental management OBJECTIVES Launch 30 innovative projects in the ten administrative regions covered by the network: NGV, synthetic methane, smart grids, etc. Cut our own methane emissions by two-thirds compared to Key points 9

7 THE FRAMEWORK OF OUR OPERATIONS Gas transmission in Europe is regulated. GRTgaz operates in France under the oversight of a National Regulatory Authority, the CRE - Commission de Regulation de l'energie. REGULATION IN EUROPE The Third Energy Package sets out the conditions for access to gas infrastructures and the shared rules applicable to the natural gas market in Europe. The Agency for the Cooperation of Energy Regulators (ACER) defines the harmonisation guidelines for the gas market. The European Network of Transmission System Operators for Gas (ENTSOG) prepares the network codes which set out the market harmonisation rules in accordance with the guidelines issued by ACER, following on from the list of priorities published by the European Commission. It monitors the coordination of investment and every two years it publishes a ten-year European network development plan and a regional investment plan jointly with three regional initiative groups (GRI), responsible for fostering the development of interconnected regional markets. EUROPEAN NETWORK CODES: CURRENT STATUS Congestion management procedures (CMP): annex to regulation (EC) No. 715/2009 of the European Parliament and of the Council, in force since August Balancing: in force since October Capacity allocation mechanisms (CAM): in force since November REGULATION IN FRANCE The French Energy Code transposes European rules into French law. The French Energy Regulation Commission (CRE) ensures due implementation of the code. Every year we submit a ten-year network development plan to the commission. The CRE verifies that the plan is coherent with the ENTSOG plan and ensures that the binding three-year investments are duly realised. Since October 2011, GRTgaz employs a compliance officer who ensures our business practices comply with the obligations of independence incumbent on the company. The compliance officer reports to the regulator. In particular, he draws up an annual report, a summary of which is available on the GRTgaz website. Incremental capacity amendment: publication in March 2017 and entry into force on 6 April Interoperability (INT): in force since May Network access tariffs (TAR): publication in March 2017 and entry into force on 6 April AN INDEPENDENCE CERTIFIED Certified as an independent transmission grid operator (ITO) by the CRE, GRTgaz meets the obligations of independence and autonomy applicable to network operators controlled by a vertically integrated Company. A GOOD CONDUCT VERIFIED Our code of good conduct guarantees customers that: Network access conditions are transparent by providing everyone with the same information accessible on grtgaz.com; All parties are treated equally, from the reservation of transmission capacities to dealing with complaints; Sensitive commercial information remains fully confidential; A ten-year network development plan is executed in line with the requirements of the French Energy Code; Our obligations of independence and selfgovernance are fulfilled over the long term. GRTgaz MULTISERVICE OBLIGATIONS FOR A public service agreement with the French governement for sets out the public service missions incumbent on GRTgaz in the following areas: Security of supply and continuity of transmission, Development of the French network integration / attractiveness of the French gas market, Promotion of gas and development of new uses for gas, Relations with customers and stakeholders, Safety, Environment, Research and development. This agreement confirms the importance given to safety, cooperative work, environmentally sound management and biodiversity. It formalises GRTgaz actions in favour of the energy transition and new uses for gas: support for industry, NGV fuel, biogas, storage of electricity as hydrogen and synthetic methane (Power to Gas), smart grid. It specifies that the costs of these actions must be taken into account by the regulation system. Bertrand Lombard has been our Compliance Officer since 1 st February 2015, monitoring GRTgaz's compliance with its legal obligations. He submits an annual report to the CRE, which is also available on the GRTgaz website. In early 2017, he submitted the 2016 report on our deployment of a code of good conduct and on our observance of independence obligations, while at the same time the CRE produced its own report on the observance of good conduct codes and the independence of electricity and gas network operators in 2015 and FIRST MULTI-YEAR FORECAST FOR GAS DEMAND The French Energy Transition for Green Growth Act requires gas transmission and distribution networks operators to publish a joint outlook every two years on demand for gas in France and the production of renewable gas. It was published for the first time in October 2016 by GrDF, GRTgaz, SPEGNN and TIGF. Gas consumption in France represented 461 TWh in 2015: 53% in residential and commercial buildings, 36% in industry, 11% in electricity production. In 2035 it should reach between 336 TWh and 516 TWh with a baseline scenario at 385 TWh. This development can be primarily explained by improvements in energy efficiency. The injection into gas networks of renewable gas produced by methanation, gasification or Power to Gas varies between 12 TWh and 76 TWh depending on the financial support offered to injection projects. BERTRAND LOMBARD Compliance Officer 10 Key points 11

8 INVESTMENT AND REGULATED TARIFFS Determined by the CRE, the transmission network access tariffs cover operating expenses and provide return on investments. The CRE verifies the efficiency of the costs borne by users, approves the investment programmes and verifies that they are executed. accept pre-odorised gas), would both benefit from this enhancement. INCENTIVE REGULATION GRTgaz receives financial incentives to control its project costs, raise its productivity and improve its quality of service. INVESTMENT DECISIONS Such decisions are based on major national and European considerations. Investment is in part conditioned by obligations designed to ensure security of supply: In France, the network must be able to cope with peak demand during unusually cold weather; In Europe, interconnections between countries must be able to transfer gas, in particular if a source of supply is cut off. Our investments are also associated with those of project promoters (LNG terminals, storage, adjacent operators, biogas etc.). THE TARIFF (ATRT5) This tariff became effective on 1 st April The tariff grid is based on an entry-exit structure with two balancing areas (North and South) until November After this date, the investment needed to operate in a single area will have been made. The ATRT5 is updated on 1 st April every year. It secures a real pre-tax WACC of 6.5% on regulated assets, enhanced by another 3% for 10 years by decision of the CRE, for projects which improve the operation and integration of the gas market. In this respect, the Val de Saône project, required to combine the North and South market areas or local odorisation, which would enable the transmission of gas to Germany or Belgium (as these countries do not THE TARIFF (ATRT6) This tariff was published by the CRE on 15 December 2016 and entered into force on 1 st April The new tariff enables GRTgaz to rise to the following challenges: successfully create the single marketplace in France in 2018, promote natural gas and develop energy solutions for the future, undertake extensive research on renewable gas production. The tariff also takes into account the actions involving the GRTgaz 2020 project. The ATRT6 tariff provides regulated assets with real pre-tax WACC of 5.25%. The average tariff for GRTgaz will therefore drop by 3.1% in 2017 (1) before rising moderately in subsequent years, due to the costs associated with the creation of the single marketplace. Projects aiming at improving the operation and integration of the gas market could receive a subsidy, the allocation and amount of which will depend on the results of a cost-benefit analysis conducted by the CRE. ATRT6 brings changes to the tariff structure in line with the European Tariffs Network Code on the harmonisation of transmission tariff structures and introduces measures to favour new customer connections and retain existing clients: the main network tariff is reduced by approx. 10% for entry points in France (pipelines and LNG terminals) and exit points from the main network to the regional network; a development discount based on a cost-benefit analysis that could lower the cost of new connections or the development of existing facilities billed to industrial customers, distribution system operators or connection of natural gas (NGV) fuelling stations. on a regional level the discrepancies in the NTR transmission tariff levels between the closest and most distant delivery points on the GRTgaz network are capped in order to align them with European best practices. More incentive regulation Performance incentives are enhanced for quality of service and for large-scale investments. 2.6 Bn OF INVESTMENT BETWEEN 2013 AND : 11 th TEN-YEAR NETWORK DEVELOPMENT PLAN Between 2013 and 2016, GRTgaz invested over 2.6 billion, which puts it amongst the leading infrastructure investors in France. The main projects for the period up to 2018 are: Commissioning of the Val de Saône and Gascogne-Midi facilities that will enable creation of a single wholesale marketplace In France in 2018; Creation of an entry point from Switzerland and Italy in 2018; Preparation of H-gas conversion for L-gas consumers, from the declining Groningen field in the Netherlands, with a pilot phase in to be followed by the full conversion project between 2021 and Beyond 2018, planned and as yet unconfirmed projects will enable the better integration of markets in the south-west and centre of Europe and to expand their access to LNG delivered to France. (1) Excluding structural effects and inter-operator reversals. 12 Key points 13

9 01 CONNECT SECTORS WITH ENERGIES Committed to the energy transition in France and Europe 14 Connect sectors with energies 15

10 DRIVE THE GROWTH OF RENEWABLE ENERGIES By helping to secure electricity production today, by storing surplus production tomorrow COMBINED CYCLE GAS TURBINE PLANTS TODAY Gas is facilitating the expansion of intermittent renewable energy production by strengthening the security of electricity supply to regions. When solar or wind production is insufficient, Combined Cycle Gas Turbine (CCGT) plants are the best option to generate backup power to meet peak demand times with the minimum of greenhouse gas emissions and the maximum of flexibility and efficiency. A few minutes suffice to start up a gas turbine plant and inject the electricity produced into the network, with an efficiency rate of 55% or even more, compared to 35% for a coal-fired plant. They adapt 6.3 GW POWER GENERATED BY 13 GAS-FIRED PLANTS to rapid variations in demand for electricity or its production. The investment required to build and operate CCGT plants is also well below that of nuclear power plants. In November 2016, almost a third of nuclear reactors were on shutdown. The 13 gas-fired plants in France took up the slack and produced 5.1 TWh (1), their highest level since 2008, to meet electricity demand that was up + 8% compared to November 2015 due to the colder temperatures full-year production amounted to 45.6 TWh, up 118% year on year. This represents 77% of fossil-fired generation and 6.6% of total electricity production, more than both wind and solar together, which amounted to 5.5% (1). GRTgaz CONNECTS A NEW-GENERATION CCGT The EDF combined cycle gas turbine plant at Bouchain in northern France was connected in April 2016, making it the most powerful gas turbine in the world. Its installed power of 605 MW can supply 680,000 homes. It emits 55% less CO 2 than an equivalent coal-fired plant, delivers an energy efficiency rating of 62% and reaches full operating power in just 30 minutes. GRTgaz contributes to the performance of gas-fired plants by ensuring their supply is as reliable and flexible as necessary, in particular during peak periods of electricity demand (2). By contributing to balancing the electricity system, gas has become a major component of the integrated smart grid energy system of tomorrow. POWER TO GAS TOMORROW Wind turbine and solar power units generate electricity, but not always when consumers need it. Because they feature no storage solution, the units are shut down or the electricity is lost to avoid saturating the networks. Power to Gas provides a solution: surplus electricity is used to generate hydrogen via water electrolysis or synthetic methane through the methanation of H 2 and CO 2. The gas networks and underground storage sites can house a part of this hydrogen (H 2 ) and all of the synthetic methane (CH 4 ). The energy storage capacity of gas infrastructures in France is 300 times higher than that of the electricity grid. Power to Gas is ideally suited to the largescale, long-term storage of energy and supplements storage solutions such as batteries and energy-transfer pumping stations (ETPS), with capacities ranging from a few hours to several days. It helps balance the electricity system by making best use of wind and solar capacities along with existing gas chain infrastructures. It maximises the portion of renewable energy sources in electricity and gas consumption, by replacing imported gas with fully-renewable gas produced locally for all gas uses, including electricity production. Methanation also recycles CO 2 collected on industrial sites or biogas production plants. Currently, the conversion efficiency levels for Power to Gas are in the order of 70% for hydrogen and 55% for synthetic methane, but if we factor in the heat generated by these reactions, they can exceed 85% or more with technology soon to be introduced. JUPITER 1000 SYNERGISTIC MANAGEMENT OF ELECTRICITY AND GAS SYSTEMS On 30 March 2016, GRTgaz and its partners (3) signed industrial agreements to install the Jupiter 1000 Power to Gas demonstrator in Fos-sur-Mer. This 30 million project is 40% funded by GRTgaz and 30% by subsidies from the European Union (FEDER), the French state (ADEME future investment programme) and the Provence-Alpes-Cote d'azur regional authority. The remainder is financed by the partners. The French Energy Regulation Commission (CRE) is also supporting the project as part of the energy transition. It will enable us to study the technical and economic viability of the process and its contribution to balancing the electricity system. The power output of four wind turbines located nearby will be converted into hydrogen (200 m 3 /h) and synthetic methane (25 m 3 /h) injected into the transmission network. Two 0.5 MW electrolysis units will be tested: one alkaline and the other with a PEM membrane. The facility will be up and running by the end of HERVÉ MIGNON RTE Marketing Director RTE, PARTNER TO JUPITER 1000 Interactions between the electricity and gas transmission systems are already extensive and will intensify even further. With the development of intermittent or variable renewable energy production, the flexibility of the electricity system is one of the major challenges for tomorrow. Combined Cycle Gas Turbine (CCGT) plants can deliver instant balance between supply and demand; Power to Gas can take up the challenges of managing surplus production of variable renewable energies. Joint analysis of the couplings between gas and electricity systems will enable us to identify those which generate the most value. NATURAL GAS: A SOLUTION TO REDUCE EMISSIONS We can do a great deal for the environment and air quality by replacing fuel oil and coal with gas. Gas combustion produces neither soot nor dust, almost no sulphur dioxide (SO 2 ), three times less NOx, 30 to 35% less CO 2 than heavy fuel oil and 40 to 45% less CO 2 than coal. Gas also offers high energy efficiency levels. It is not stored on site as plants are fed via the network; gas combustion plants require little in the way of maintenance compared to other fuels. 137 TWh GAS NETWORK STORAGE CAPACITY REPRESENTS 28% OF ELECTRICITY CONSUMPTION IN FRANCE IN 2016 (1) Source: RTE. (2) In France a 1 decrease in temperatures in winter causes electricity consumption to rise by 2,300 MW on average. The development of gas-fired heating systems helps manage these peaks and therefore the dimensioning of the electricity system is highly dependent on it. (3) McPhy Energy for electrolysis, Atmostat and CEA for methanation, Lerouz & Lotz for CO 2 capture on the Ascometal site, CNR for the supply of renewable electricity, GPMM for the viability of terrains and CO 2 pipelines, GRTgaz and TIGF for the gas connection station, GRTgaz for the coordination, assisted by RTE for balancing the electricity grid. 16 Connect sectors with energies 17

11 REDUCE INDUSTRIAL EMISSIONS Partners in industrial performance ECONOMIC AND ENVIRONMENTAL BENEFITS GRTgaz contributes to the economic and environmental performance of its industrial customers by ensuring that they receive the full benefits of natural gas, a competitive, clean, reliable and versatile energy. Our teams are developing a very active approach to provide information and advice. They deliver business offers that enable industrial consumers to benefit from wholesale market prices, they anticipate changes to regulations and certification standards, optimise processes, select suitable equipment and secure available funding. From the definition of requirements through to commissioning facilities, we support industrial consumers and distribution network operators in all their connection and development projects. FOCUS NAPHTACHIMIE Naphtachimie is a 50/50 joint venture between Total Petrochemicals France and INEOS. It operates two olefin production units on the Lavera petrochemical complex in Bouches-du-Rhône, including one of the largest steamcrackers in Europe, a utilities production plant and a biological water treatment plant. To reduce the emission of atmospheric pollution, Naphtachimie undertook a project to maximise the consumption of natural gas in the steam production plant boilers instead of fuel oil. Through the work done jointly by GRTgaz and Naphtachimie teams, the natural gas supply infrastructures on the site were adapted to handle the new capacity and availability requirements. The old delivery station was modified in 2016 and a second delivery point will be brought into service in the first half of PROMOTE ENERGY CONVERSION While regulations on greenhouse gas emissions and on energy efficiency are becoming more stringent, our experts are delivering their know-how to support industrial consumers in their plans to convert to natural gas. We are participating in the development of new generations of equipment such as very low NOx burners to meet future environmental restrictions. Our consultant engineers examine the best possible solutions on a case-by-case basis to help industrial consumers convert to gas, while optimising the performance of their facilities. In 2016, almost 4.2 TWh of gas consumed was through conversions from fuel oil or coal to gas in the same year, mainly in the chemical and petrochemical industry, agriculture and urban heating. 1.4 MT CO 2 EMISSIONS WERE AVOIDED IN 2016 THROUGH NATURAL GAS CONVERSION PROJECTS IN INDUSTRY OVER THE LAST FIVE YEARS. GUILLAUME QUENTEL Market gardener and supplier to Savéol, leading French tomato producer We decided to use a 3.3 MW gas co-generation plant to heat our 5 hectares of greenhouses. It is much more reliable, clean and simple to maintain than a fuel oil or coal-fired plant. The heat produced warms our greenhouses, the electricity is sold to EDF and fed into the local grid. CO 2 emitted by the process is recovered to promote plant photosynthesis. This cogeneration lowers our production costs and generates a stable complementary revenue, with a 12-year obligatory purchase agreement. It also enables us to be a local source of electricity, something that is lacking in Brittany. COGENERATION IN FRANCE 4.7 GWe OF INSTALLED ELECTRICAL POWER AT THE START OF 2016, INCLUDING 875 PLANTS GENERATING ABOVE 50 kwe IN THE ORDER OF 30 TWh OF GAS CONSUMED, CORRESPONDING TO 15 TWh OF HEAT PRODUCTION AND 15 TWh OF ELECTRICITY PRODUCTION. GAS CO-GENERATION: ENERGY EFFICIENCY IN ACTION Co-generation consists in simultaneously producing heat and electricity using natural gas. The most efficient plants deliver an energy efficiency level above 90% and primary energy savings of 36% compared to two separate sources. CUSTOM SERVICES Our customers can accurately monitor their CO 2 emissions from gas consumption on each industrial site on the secure TRANS@ctions portal: calculations take into account the properties of the gas delivered to each metering point. The accuracy of the measures taken on site, their remote transmission and their energy consumption calculations by our IT team are ISO 9001-certified (quality management system). Some industrial processes are sensitive to variations in natural gas parameters such as the gross calorific value (GCV), Wobbe's index or the methane content. Our QUAL'IPgaz service informs the sites in question beforehand in order to adapt their parameters. All this information is gathered and shared via a transmission network whose instrumentation and communication are constantly being enhanced: we handle over 30 million data items every day. Our Industrial Performance clubs enable industrial operators in the same sector or with similar issues to share their experiences and benefits from up-to-date information. 18 Connect sectors with energies 19

12 DEVELOP THE CIRCULAR ECONOMY Biomethane: a local, renewable biogas CONVERT WASTE INTO ENERGY A prime example of local projects, biomethane production enables sustainable waste management, delivers clean and renewable energy, while favouring the creation of local jobs. Biomethane is a purified biogas produced by the fermentation of organic matter (1). It presents the same properties as natural gas and since 2011, can be injected in the gas networks. Methane production avoids the release into the surrounding air of greenhouse gases produced by decomposing waste. It reduces the need for gas imports and produces digestate, a natural fertilizer which can replace chemical fertilizers. It generates revenue and creates jobs that cannot be relocated. A guarantee of origin certifies the renewable nature of the MWh sold to customers wishing to buy green gas. The French Energy Transition for Green Growth Act sets a level of 10% for the share of renewable gases in consumption by The multi-year energy programme (PPE) sets a level of 1.7 TWh of biomethane injected into the system in 2018 and 8 TWh by sites, representing 410 GWh of annual production capacity, injected 215 GWh in 2016, compared to the 82 GWh in 2015 by 17 plants. The gas transmission networks are fully available to receive this production of environmentally sound gas. The injection station meters the energy, examines the properties of the biomethane, odorises it and injects it into the network. JOIN A VIRTUOUS CIRCLE With biomethane, local and regional authorities, industry and the agricultural world can join the virtuous cycle of the circular economy: we are working alongside them to facilitate its development. Our interactive online map Reso'Vert provides a view of the injection points on the transmission network for projects of significant size: starting at 200 m 3 /h or GWh per year. We deliver our technical expertise to assist project owners. In 2016, we signed five new design agreements and six connection agreements. In 2017, we foresee the connection of six new facilities to the transmission network, representing 215 GWh per year of maximum capacity, followed by five or six further connections in DIVERSITY OF PROJECTS HOUSEHOLD WASTE AND ORGANIC WASTE: ECOCEA PROJECT IN SAÔNE-ET-LOIRE As the first project to be connected to the GRTgaz transmission network, ECOCEA recycles the household and organic waste from 315,000 residents, collected by local collector SMET 71. The unit is located in Chagny and produces 2.6 million m 3 of biomethane, or 28 GWh per year, for injection into the transmission network. All the biomethane production is bought by the neighbouring TERREAL tile factory, enabling it to cover a third of its gas supply needs. Emissions avoided: 5,200 tonnes of CO 2 equivalent per year. On the same site, the digestate is blended with organic waste to produce 27,000 tonnes of compost per year. AGRICULTURE: METHAN'AGRI PROJECT, ORNE, FRANCE This project involves a 28 GWh/year capacity plant under construction in Messei, by a collective of farmers with the intention of supplying their 25 farms. The whole project is part of their desire to promote and adopt a circular economy. Within a radius of 7 km, they deliver their livestock effluent and 75% of their crop residues, getting back most of the digestate to fertilize their land. This reduces their purchases of nitrogen-based fertilizers in similar proportion. Methan'Agri also offers a local solution to process organic waste from industrial operators and local authorities. The biomethane produced will prevent the emission of 5,400 tonnes of CO 2 equivalent per year. FOOD GROWING INDUSTRY: BIOLOIE PROJECT, VENDÉE, FRANCE After an agreement was signed in 2016, the Bioloie project will be connected to the natural gas transmission network in L'Oie in the second half of It associates the Ernest Soulard firm, which raises and transforms over 100,000 ducks per week and exports 50% of its production, and Fonroche Biogaz, a company which designs, builds and operates renewable energy production plants. The Bioloie methane production unit will process 73,300 tonnes of organic waste from Ernest Soulard, and from other food chain industries and producers within a radius of 15 km. The unit will produce sufficient biomethane to supply natural gas to 13,500 people a year and 71,000 m 3 of digestate for use as fertilizer. Altogether, the project will reduce CO 2 equivalent production by over 9,000 tonnes a year. FOCUS SUPPORT FOR THE BIOMETHANE SECTOR In France, biomethane injection is governed by a guaranteed purchase tariff for 15 years: from 46 to 139 per MWh depending on the size of the facility and the nature of the waste input. State calls for tenders will supplement these support mechanisms and subsidies may be granted by ADEME, European funds, regional and local authorities. Since 2017, consumption of biomethane except as fuel is exonerated from the TICGN (1) tax. Reaching the injection targets set out for 2023 will be aided by simplified procedures, the extension of the price guarantee to 20 years to fund projects. (1) Domestic consumption tax on natural gas 40,400 T of CO 2 equivalent PREVENTED BY THE INJECTION OF 215 GWh OF BIOMETHANE IN TWh OF BIOMETHANE INJECTED INTO GAS TRANSMISSION NETWORKS (2023 TARGET) (1) Livestock effluent (slurry, manure), energy crops, intermediate crops for energy use / intermediate nitrogen-capturing crops, crop waste, sludge and by-products of food industries, animal by-products, household waste, organic waste and wastewater treatment plant sludge. Methan'Agri: a project undertaken to associate local industrial producers in the creation of a methanation chain in the Orne countryside, home to over 500,000 cattle. 20 Connect sectors with energies 21

13 PRESERVE AIR QUALITY THROUGH NATURAL GAS FOR VEHICLES A mature and competitive technology that is available immediately. A PRIORITY SOLUTION TO REDUCE URBAN POLLUTION 20 million vehicles around the world use natural gas (NGV) or biomethane (biongv) as fuel, either in compressed form (CNG) or liquefied form (LNG). There are multiple benefits for the climate, the environment and public health, in particular in urban environments. NGV emits 25% less CO 2 than petrol and 10% less than diesel, less nitrogen oxide (70%), almost no fine particles, no odour or smoke. The engines themselves are half as noisy as diesel engines. The results are even better with biongv, which is CO 2 neutral and is produced by local biomethane sources. FOCUS GRTgaz AT THE PARIS MOTOR SHOW For the first time in 2016, GRTgaz was present at the Paris Motor Show in association with AFGNV (1). For 18 days, 70 members of staff relayed each other to promote the benefits of NGV to the general public and allow them to test three NGV vehicles, a Fiat Panda, a VW Caddy and an Audi A3 g-tron. The vehicles recorded almost 500 test drives. From small urban vehicles to 44-tonne heavy goods vehicles, gas-powered engines are available on all segments with travel ranges in the order of 400 km for light vehicles (800 km for duel-fuel models) and up to 1500 km for the most recent HGVs running on LNG. Filling the fuel tank is as quick as a conventional combustion engine and NGV vehicles are subject to no restrictions in urban areas. These qualities should drive the development of the NGV vehicle stock, in particular in the transport of goods by road, where it is the only technically operational alternative fuel to diesel. And yet, despite growth of 5% in 2016, only 15,000 vehicles are in circulation in France. The main reason: a woefully insufficient network of NGV stations open to the public. There are only 50 such stations around the country, including 13 accessible to heavy goods vehicles. In comparison, Germany has 900 and Italy almost OBJECTIVES FOR 2023 The French multi-year energy programme (PPE) aims for 3% of HGVs to be using natural gas by 2023, which would multiply the consumption of NGV by ten, of which 20% would be biongv. The government aims to reach 0.7 TWh of biongv consumption in 2018 and 2 TWh by To support these objectives, in 2016 ADEME launched a call for projects with 300,000 of aid to build NGV fuelling stations open to the public. Each project should feature a minimum of 5 stations and 20 vehicles associated with each station. ESSENTIAL INFRASTRUCTURES In parallel, the Alternative Fuels Infrastructures (AFI) European directive requires the deployment of public-access alternative fuel distribution infrastructures, including NGV, by GRTgaz is working hard to bring concrete progress for this environmentally sound alternative fuel and is active in leading the chain, providing support to project owners wishing to invest in stations. In 2016 the AFNGV (1) association submitted a report to the French minister for the environment on the development of NGV infrastructures which would satisfy the AFI directive and the objectives of the PPE. The report recommends the construction of 250 public stations by the end of 2020: a network of 150 stations (40 LNG stations and 110 CNG stations) serving goods transport and in the longer term, passenger coach lines; a network of 100 stations serving cities to develop the use of NGV urban delivery vehicles. With a forecast 4 TWh of biomethane being injected into the transmission networks from 2020 onwards, gas-powered mobility could count on a renewable fuel supply that would improve its carbon footprint even further, while reinforcing national energy independence. FOCUS 15,000 NATURAL GAS VEHICLES IN FRANCE 81,000 T CO 2 EMISSIONS AVOIDED NEW WORLD RECORD FOR NGV 2,606 km on the equivalent of 1 litre of petrol: this is the record established by the MicroJoule CNG prototype built by students of La Joliverie school in Saint-Sébastien-sur-Loire, with support from GRTgaz. NVG won the 31 st Shell Eco-marathon with the best performance recorded by any internal combustion engine. (1) Association Française du Gaz Naturel pour Véhicules, French association promoting natural gas for vehicles. (2) Syndicat Intercommunal pour le Gaz et l Électricité en Île-de-France - Inter-authority gas and electricity syndicate for the Greater Paris region. It covers 185 municipalities (5.4 million inhabitants) under the gas distribution public service and 64 municipalities (1.4 million people) for electricity distribution. (3) Magnin, Megevand, Prabel, Sotradel, Jacky Perrenot and Transalliance. ATTRACTIVE TAX REGIME Business will be able to deduct 40% of the value of NGV vehicles over 3.5 tonnes acquired in 2016 and 2017 from their taxable profit. The domestic consumption tax on energy products (TICPE) is advantageous and the registration document (carte grise) is less expensive or even free of charge in some regions. The logistics fleets of Biocoop, Ikea, Carrefour, Monoprix, Picard, La Poste and Leroy Merlin all use biongv. COMMITMENT BY A LEADING ENERGY SYNDICATE IN FRANCE NGV and biongv fuel represents a formidable tool for local authorities in their energy transition programmes, but the lack of fuelling stations does limit its development. We have decided to take on our responsibility by developing a network of around ten public-access stations in Île-de-France over the next three to five years. This is what the Sigeif Mobilités semi-public company was created for in 2016, explains Jean-Jacques Guillet, President of Sigeif (2). GRTgaz is one of the six founding shareholders alongside Caisse des Dépôts, Syctom, Siaap and Siredom. Starting in 2018, the first fuelling stations built by Sigeif Mobilities will join the five existing public access stations in Île-de-France, where the regional authority is supporting the project. TRANSPORT FIRMS ACTIVE IN AUVERGNE-RHÔNE-ALPES In 2016 GRTgaz joined the Équilibre project operated by six transport firms (3) supported by ADEME and GRDF. NGV is a means to improve our profitability and image, while planning ahead for future emissions-control regulations in urban areas. The Équilibre project aims to bring clear and objective answers on the benefits for users of transition to NGV fuel, explains Pascal Megevand, the main driver behind this experiment. 15 heavy goods vehicles, of which seven CNG, three LNG and five Diesel Euro 6, are instrumented to measure their fuel consumption and emissions under a variety of operating conditions. The reliability and availability of the vehicles and fuelling stations are also evaluated. Over time, a simulator will enable transporters to estimate the savings made by NGV on a given route. Source: Gaz-Mobilité.fr. 15/3/ Connect sectors with energies 23

14 EXEMPLARY ENVIRONMENTAL CONDUCT Optimise our consumption and reduce our emissions ENERGYEFFICIENT TRANSMISSION The transmission of natural gas in underground pipelines is a safe, economical, efficient and discreet method of conveying large volumes of energy while respecting local activities, countrysides and biodiversity. Our network consumes less than 0.5% of the energy we transport. We strive to reduce all our consumption, starting with the power sources used to transmit gas to all points of the network. Each day, simulations are carried out using the MINOPEX software, which serves to configure our industrial production resources and minimise our energy consumption. New structures such as the Arc de Dierrey, which has been operational since the end of 2016 and the Val de Saône artery which will open in 2018, further reinforce the energy performance of transmission by making transit smoother. CUT METHANE EMISSIONS BY TWO THIRDS BY 2020 Over the last 15 years, GRTgaz has strived to strongly reduce its carbon dioxide and nitrogen oxide emissions. Now that this has been achieved, GRTgaz has made the reduction of its methane emissions a strategic objective for the coming years. Such emissions represent a very small portion of the quantities carried by GRTgaz, somewhere around 0.05%, and remain marginal compared to other fields of activity. Nonetheless, this reduction goes hand in hand with our undertaking to operate our business with exemplary environmental conduct. To confirm this commitment, GRTgaz has set itself the objective of cutting its methane emissions by two thirds by FOCUS GAS EXPANSION: A ZERO-EMISSION RECYCLED ENERGY? Gas is compressed under high pressure to be transported over long distances and must be expanded before entering local distribution networks and delivery to industrial consumers connected to the transmission network. The TENORE project seeks to recover this energy inherently trapped in the system in the form of electricity (mostly produced without emissions) using an expansion turbine. Sites able to host such equipment could produce a significant portion of the electricity we consume. This would raise the energy efficiency of natural gas transmission even further, making it a true component of the circular economy. POWER CONSUMPTION 0.44% OF ENERGY TRANSMITTED IN 2016 NATURAL GAS VEHICLES ARE CLEAN - 70% LESS NOx COMPARED TO DIESEL - 10% LESS CO 2 COMPARED TO DIESEL NO FINE PARTICLES (1) (1) Measurable with current technologies. 1.3 g OF CO 2 / kwh TRANSPORTED FOCUS 100% NGV BY 2020 Between 2015 and 2016, we doubled our fleet of light vehicles running on NGV to reach 69 vehicles in all. Our objective is to replace 90% of vehicles removed from the eligible fleet by NGV vehicles in 2017, then 90% in 2018, 95% in 2019 and 100% in This will represent 249 vehicles or 20% of the whole GRTgaz vehicle fleet on 30 sites near an NGV station. This objective will be reassessed in alignment with the construction of publicaccess stations in France and developments in NGV vehicles. 24 Connect sectors with energies 25

15 02 CONNECT TERRITORIES WITH MARKETS Committed to energy security and regional competitiveness for France and Europe 26 Connect territories with markets 27

16 SECURE ACCESS TO GAS FOCUS IN 2016 FOR EUROPE THE FLANDERS PIPELINE MISSIONS IN BRAZIL AND IRAN GRTgaz delivers its expertise across the whole world. In 2016, three experts assessed the maintenance of the Transpetro transmission network in Brazil. A mission was also undertaken to deliver our know-how on pipeline integrity and compression to representatives of the National Iran Gas Company, which manages 40,000 km of high-pressure pipelines. EUROPE, THE WORLD'S LEADING IMPORTER OF NATURAL GAS Gas represents around a quarter of the European Union's energy consumption, which imports almost three quarters of its supply: 88% via pipelines and 12% as LNG. Russia supplies 35% and Norway supplies 25% of Europe's gas, followed by Algeria (7%) and Qatar (6%) (1). Following delivery shutdowns in 2009 due to the conflict between Russia and Ukraine (2), Europe took measures to reinforce the security of its gas supply and the integration of European markets. Projects considered essential now benefit from fast-track procedures and incentive financial conditions. Cross-border interconnection points must be capable of handling gas transit in both directions to extend supply options. 5 Bn INVESTED BY GRTgaz IN 10 YEARS TO DEVELOP AND STRENGTHEN ITS NETWORK In February 2016 the European Union presented a new series of measures to boost the EU's resilience to supply shortages. The issue is to favour access to LNG, optimise the use of storage capacities and introduce a solidarity mechanism between member states. FRANCE: A PRIVILEGED LOCATION In France, almost all the gas we consume is imported, but we benefit from the most diverse supply routes in Europe, with gas pipeline connections to the North, East and South of Europe, LNG terminals receiving deliveries from all continents and high underground storage capacities. This privileged situation affords our gas infrastructures a key position in the security and competitiveness of Europe's supply. (1) Gas in Focus, October (2) Europe was deprived of 20% of its supply for 14 winter days, with 12 countries affected. REGIONS: PUBLIC SERVICE OBLIGATIONS The transmission network is a strategic factor in energy security for regions, so it must be able to handle higher gas volumes during exceptional cold periods. This public service obligation is a criterion for part of our infrastructure investment. PROJECT COSTS: 93 M FOR GRTgaz Since November 2015, thanks to the France/ Belgium interconnection infrastructure, in particular the Flanders pipeline (100 km gas pipeline between Pitgam in France and Maldegem in Belgium), shippers can transmit gas from France to Belgium and further afield to the markets of north-western Europe: Netherlands, Germany and the UK. The infrastructures built enable the transport of up to 8 billion m 3 of natural gas per year, from France to Belgium. This interconnection also provides a new outlet for the Dunkirk LNG terminal which started commercial operations in January The France-Belgium interconnection was designed to be reversible. In this way it reinforces the security of supply and the diversification of sources of supply. Lastly, to meet the requirements of non-odorised gas transmission as required by countries of north-western Europe, the GRTgaz transmission system had to undergo modifications. The central odorisation plant enabling GRTgaz to transmit odorised gas across its whole network was displaced downstream of the Pitgam interconnection station. A transport zone for non-odorised gas was created between the Loon entry point (arrival of undersea pipeline from Norway) and the Clipon (connection to Dunkirk methane terminal), the Pitgam station and the Hondschoote international metering station, on the border with Belgium. 100 M FOR FLUXYS 28 Connect territories with markets 29

17 IN 2016 FOR FRANCE ARC DE DIERREY IN 2016 FOR TERRITORIES SANTERRE PIPELINES In September 2016, GRTgaz successfully commissioned the last 120 km section of the Arc de Dierrey pipeline. This gas highway stretching over 300 km will transport 15 to 20% more gas to the east and south of France from the Dunkirk LNG terminal, which can output 13 billion m 3 of gas per year. This large-diameter pipeline extends on from the Hauts-de-France II pipeline completed in 2014, connecting Cuvilly (Oise) to Voisines (Haute- Marne) some 308 km away. An initial 188 km had already been put into service between Cuvilly and Dierrey-Saint-Julien (Aube) in A MAJOR PROJECT STARTED IN 2008 For eight years this project kept several hundred staff very busy. The first studies were started in The structure was recognised as being of public interest in October 2013 after four years of work. It received support from the European Commission as part of the European Energy Plan for Recovery. 19,000 steel pipes, 1.20 m in diameter and 12 to 17 m in length, were laid. Three motorways, 14 railways lines (including two TGV lines) and 35 waterways were crossed. Five environmental specialists monitored our commitments to preserve the environment. The Arc de Dierrey pipeline was finished within planned schedule and on budget. Dunkirk Pitgam Cuvilly Ourcq Dierrey Alvedigen Taisnières Voisines Obergailbach Oltingue This 33 km gas pipeline was started operations in November 2016 between Ressons-sur-Matz (Oise) and Chilly (Somme). It partially doubles up the existing connection between the Gournay-sur-Aronde gas storage facility and the Nord department. This is a delicate project due to its proximity to remnants of the battle of the Somme dating back to the First World War. Two mine-clearing programmes uncovered 1.7 tonnes of bombs, grenades and trench mortar bombs. On a brighter note, the preventive prior archaeological digs uncovered an exceptional collection of wall paintings dating from the 2 nd and 3 rd centuries, recovered by DRAC (1) which intends to exhibit them at the Amiens museum. ETOILE DE CUVILLY DISTRIBUTES 40% OF GAS TRANSMISSIONS This new interconnection station to the north of Compiègne is a genuine gas hub. It switches and regulates flows between the pre-existing network, the Hauts-de-France II and the Arc de Dierrey pipelines, handling about 40% of the national network flows. 94 M 16 M IN LOCAL REVENUE Interconnections with the adjacent network Interconnection with the LNG terminal Completed gas pipeline 308 km DN* 1200 MM * Nominal diameter. 3 REGIONS CROSSED 621 M 33 km DN* 900 MM * Nominal diameter. 2 DEPARTMENTS 23 MUNICIPALITIES 57 M LAYING STRAW FOR PROTECTION Locally-sourced and biodegradable straw was successfully tested as a replacement for geotextile mats often used between the ground and temporary decking roads laid in fields to avoid ruts caused by motorised site machinery. TULIP PROJECT The L-gas network for gas with low calorific value feeds the majority of natural gas consumers in the Hauts-de-France region. It represents approximately 10% of French consumption and 1.3 million customers, including a hundred industrial operators with direct connections to the transmission network. L-gas comes from the Netherlands and imports to France will cease somewhere around To ensure continuity of supply for consumers, we need to progressively convert this network to H-gas supply (high calorific value) which supplies the rest of the country. In addition to the network alterations, this large-scale project requires work to be done on the premises of each and every customer. The work is done by the local authorities, jointly with the infrastructure operators affected. A first series of modifications to the transmission network has started, costing 42 million. It will convert the sectors of Doullens, Gravelines, Grande-Synthe and Dunkirk during the pilot phase of the project, which is scheduled for A ENHANCED ENERGY EFFICIENCY Work done on the premises of each customer will improve energy efficiency through better configuration of gas fired appliances and customised recommendations. Moreover, the transition from L-gas to H-gas will improve the energy efficiency of transmission as each cubic metre carried will contain more energy. PROJECT SUPPORTED BY EUROPEAN UNION (1) Regional department for cultural affairs. 30 Connect territories with markets 31

18 FACILITATE ACCESS TO MARKET 2016: ENTRY AND EXIT CAPACITIES AND MARKETPLACES (H) (B) (H) 230 (B) 620 PEG Nord TRS 410 3,585 GWh/day Entry capacities 2,285 GWh/day via pipeline 1,300 GWh/day as LNG 658 GWh/day Exit capacities High calorific value gas Low calorific value gas 223 in GWh/day The security and competitiveness of gas supplies are priorities for the European Union, which intends to favour access to diversified sources of gas and facilitate arbitration, enabling gas to circulate and be traded easily across Europe. The development of networks and trading capacities between countries, the deployment of network codes to harmonise the rules of access to transmission networks and the market rules to support this ambition. FRENCH MARKET: MORE OPEN AND SIMPLER Since 2005, the entry capacities into France have increased by 50% and the exit capacities have doubled. A 100 GWh/day entry point from Switzerland and Italy will be created in Oltingue in This will enable France to meet the market integration objectives set out in the Third Energy Package. Simplification of the transmission market has continued in parallel with the transition from five marketplaces in 2005 to three in 2009 then two in 2015, PEG Nord (2) and TRS (3), resulting from the merger of the PEG Sud markets operated by GRTgaz and TIGF. The last step is to establish a single marketplace in France. This is scheduled for November (1) And up to 200 GWh/day in interruptible capacities. (2) Point d Échange Gaz Nord. (3) Trading Region South. FOCUS EUROPEAN FLUIDITY GRTgaz is among the founding members of the Prisma gas capacity trading platform, which now includes forty or so European TSOs. Prisma facilitates gas market integration within Europe by auctioning off grouped capacities at all bookable network points of the Union and between market areas. It also offers a secondary capacity trading market. Over 450 shippers are registered on Prisma. Catherine Brun, Vice President Marketing and Sales at GRTgaz, was elected as Vice-President of Prisma on 22 March A SINGLE MARKETPLACE IN 2018 By the end of 2018, the single marketplace will operate with a GRTgaz balancing area and a TIGF area. GRTgaz will therefore have to merge its North and South areas. The North area features multiple supply points, especially pipeline terminations, while the South area is highly dependent on LNG deliveries. This may cause large price differences between the two areas, even up to twice as much as seen during the winter. Several options have been examined to resolve this situation. VAL DE SAÔNE AND GASCOGNE- MIDI PROGRAMMES In 2015, under the oversight of CRE, GRTgaz decided to undertake the Val de Saône and Gascogne-Midi programmes, the purpose of which is to merge the two tariff areas and create a single marketplace for gas. Introduction is planned for late As part of the Val de Saône programme, a new 188 km gas pipeline between Étrez (Ain) and Voisines (Haute-Marne) will be installed parallel to the Burgundy artery. The interconnection points on the Voisines, Palleau (Saône-et-Loire) and Étrez sites will be adapted and the compression station at Étrez upgraded. The work is currently under way. VAL DE SAÔNE 727 M 188 km PIPELINE, DN* 1,200 mm, MAOP 67 BAR * nominal diameter. 3 INTERCONNECTIONS: VOISINES, PALLEAU, ÉTREZ 1 COMPRESSION STATION: ÉTREZ 3 REGIONS, 4 DEPARTMENTS, 65 MUNICIPALITIES CROSSED GASCOGNE-MIDI 22 M FOR GRTgaz 2 PROJECTS SUPPORTED BY THE EUROPEAN UNION In parallel, as part of the Gascogne-Midi programme, the Gascogne artery will be upgraded by TIGF. GRTgaz will oversee the modifications to the compression stations in Cruzy (Hérault) and Saint-Martin-de-Crau (Bouches-du-Rhône) to make use of the Midi pipeline in both directions, thereby enabling the South East of France to be supplied by the South West. ZEFIR PROJECT (1) Alongside these infrastructure projects, we need to build mechanisms to ensure that the single marketplace operates correctly in all situations. The joint ambition of these two TSOs is to propose a simple and competitive offer as of 1 st November Customers are fully involved in the construction of the mechanism, as part of the consulting process. (1) Zone d Échange France Inter-Réseaux (National inter-network trading area): GRTgaz in-house project. Gascogne Artery MIDI artery Val de Saône Network interconnection point LNG terminal Voisines Étrez Palleau Saint-Martin- Cruzy de-crau Compression station Work started on Val de Saône and Gascogne-Midi 32 Connect territories with markets 33

19 PENDING THE MERGER FOCUS GRTgaz DEUTSCHLAND: STRATEGIC POSITION GRTgaz works closely with adjacent operators to release the tension on the North-South connection by optimising the use of transmission network capacities, storage capacities and LNG terminals. FREEING UP CAPACITY The JTS (Joint Transport Storage) services established with Storengy enables us to propose up to 32 GWh/day of supplementary capacity for auction. During the winter, the optimisation of flows between TIGF and GRTgaz enabled the sale of firm surplus monthly capacities and improved the availability of interruptible capacities already purchased. We also proposed entry capacities in the South area from Switzerland through close cooperation with Swiss TSOs and in particular Gaznat. TRADE 7 DAYS A WEEK In September 2016, GRTgaz and PEGAS, the European natural gas contract trading platform, extended the market coupling between PEG Nord and TRS to weekends and holidays. Introduced in 2011, the platform enables day-ahead auctions for transmission services between the two market areas, in either direction depending on the market conditions. The coupling enables optimum use of transmission capacities between the areas. This extension enables continuous 24/7 trading between the areas, thus improving price convergence and greater liquidity. TRANSPARENCY IN ACTION The Smart GRTgaz online application is available to all. It provides complete information to customers and prospects alike to optimise their capacity reservations and balance their gas portfolio. All entry and exit points on our network are covered and over 1,000 different data are updated in real time. Bloomberg and Reuters use Smart GRTgaz to inform their subscribers. GRTgaz + SMARTPHONE APP 2,000 DOWNLOADS IN 20 COUNTRIES A NEW APP To bolster our information tools, in 2016 we finalised GRTgaz+, a smartphone app providing key data such as hourly consumption by type of consumer, inflows and outflows, daily balances and wholesale prices on European marketplaces, regional consumption data updated monthly and key indicators for renewable gas. NEW EUROPEAN REPORTING SYSTEM The second phase of the REMIT regulation on the transparency of wholesale energy markets entered into effect in April We worked closely with GRTgaz Deutschland to deliver to ACER (1) the daily information requested concerning capacity reservations and our network usage. DATA LAB How can we transform millions of data from our network into data sets that are useful to customers and our business lines? This is the aim of our data lab created in 2016 and installed in the Liberté Living-Lab in Paris. This co-working space dedicated to public-interest technologies houses start-ups which share their skills with teams detached by large companies. Our working areas are data visualisation to facilitate the use of data and data science to create models and simulations, which should help us meet operational challenges more effectively. (1) European Agency for the Cooperation of Energy Regulators. FRANCE GRTgaz operates in Germany through GRTgaz Deutschland, whose network links the Czech and Austrian borders to the French border. This artery is connected to the Nord Stream gas pipeline, extending the historical gas route through Ukraine. It plays an important role in bringing Russian gas to France and the south of Germany, where it forms the backbone of the NetConnect Germany (NCG) market area. The large volumes transmitted contribute to security of supply for both countries and to the fluidity of the NCG trading point. The extensive synergy in the commercial field between GRTgaz and its subsidiary, along with the combined experience of the two entities, facilitate alliances and cooperation with other European TSOs. 1,161 km 367 TWh TRANSMITTED IN 2016 Medelsheim Obergailbach Frankfurt Gernsheim Mittelbrunn Stuttgart Rimpar GERMANY Rothenstadt Munich CZECH REPUBLIC Waidhaus Wildenranna Oberkappel FOCUS AUSTRIA HIGHLY APPRECIATED QUALITY OF SERVICE We conduct an annual customer satisfaction survey. In 2016, 92% of our customers said they were satisfied. They appreciate our professionalism and expertise, the quality of our relationships, the quality of products and services, our responsiveness, our consideration of their expectations and the information tools we provide. This strongly encouraging feedback will help us to make further progress. 6 compression stations 3 cross-border interconnection points: France, Czech Republic, Austria 1 NCG/Gaspool interconnection point 34 Connect territories with markets 35

20 03 CONNECT TERRITORIES WITH SKILLS, TALENTS AND IDEAS TO SHAPE THE FUTURE Support Listen Explain Co-develop Monetise Share Innovate Anticipate Secure 36 Connect territories with skills, talents and ideas to shape the future 37

21 SUPPORT LOCAL AND REGIONAL AUTHORITIES Serving the energy transition and sustainable development As the leading policy makers for our regions, regional authorities are today responsible for creating a range of future planning tools: the regional programme for land management, sustainable development and equality of territories (SRADDET), the regional programme for the climate, air and energy (SRCAE) or the regional programme for environmental consistency (SRCE). They are also the driving forces behind policies governing employment, training and the economic development of their territory. PARTNER WITH REGIONAL AUTHORITIES In 2016, GRTgaz signed its first ever partnership agreement with Régions de France to cooperate in three main areas: the development of regional energy programmes; the implementation of regional policies concerning energy, environment, mobility, innovation and economic development; training, education and assistance in finding employment, in particular in the technical trades of the gas industry. REGIONAL ATTRACTIVENESS AT STAKE With its GRTgaz 2020 project, GRTgaz considers that it is responsible for contributing to regions' attractiveness and their energy future. The aim is to help innovative solutions emerge and build a low-carbon energy system, capable of reconciling security of supply, freedom of choice for local authorities and competitiveness across our industry. Our first aim with local authorities is to identify, test and promote virtuous solutions that maximise use of renewable energy (gas and electricity) at the best cost, in order to share a forward-looking vision. The local and regional delegates of GRTgaz are key points of contact to support regional authorities in their planning approach to sustainable energy systems. By way of example, we are assisting the Brittany and Loire regional authorities in their energy transition through several agreements. We work alongside the Hauts-de-France regional authority, which is deeply involved in the development of methanation and biongv as part of its Rev3 third industrial revolution project. We are fully committed to ramping up biomethane projects for injection into the networks, in particular in the Grand Est, France's leading region in terms of biomethane injection. OPEN DATA BY GRTgaz AND RTE GRTgaz is continuing to deliver information by way of open data. In early 2017, to bolster the publication and understanding of energy data for stakeholders (public, institutions and authorities), GRTgaz joined forces with the electricity grid operator RTE to launch the opendata. reseau-energie.fr platform. To start with, five sets of multi-energy data are published: electricity and gas, consumption by region, by IRIS network (1), by sector of activity, renewable production. The platform is designed to enable other network operators to join progressively and handle extended multi-energy data sets. This information will enrich the thousands of items already available on smart.grtgaz.com and on the GRTgaz+ smartphone app. It will help local and regional authorities in their forward-looking analysis and planning, identify the most efficient energy mix and correctly dimension energy systems using actual usage data. (1) IRIS: Îlots Regroupés pour des Indicateurs Statistiques. 20% GREEN GAS IN THE NETWORKS IN 2035 AND 100% BY 2050? The technical potentials of methanation is currently estimated at around 200 TWh (1), that for gasification (2) at around 160 to 280 TWh (3) and Power to Gas could contribute between 15 and 40 TWh (4) to the injection of renewable gas. By 2035, we therefore estimate that up to 20% of France's consumption approx. 385 TWh by that time could be covered by these three technologies (5). In 2050, 100% renewable gas would be available through the best possible use of this potential. To further advance on this path, GRTgaz joined forces with six other European gas infrastructure companies (6) in the Green Gas Initiative, aiming to produce 100% carbon-neutral gas by Public authorities also have a role to play through support mechanisms (tax relief), simpler administrative procedures and support in project funding. (1) Source: Ademe-Solagro (2) Technology enabling recovery of dry biomass from certain types of waste. (3) Source: GRDF/MEDDE/MAAF/MEF (4) Source: Ademe-GRTgaz study (5) Source: Multi-year gas forecast assessment 2016, GRTgaz, TIGF, GRDF, SPEGNN. (6) Energinet.dk, Fluxys, Gasunie, Ontras, Gaznat and Swedegas. PHILIPPE RICHERT President of Régions de France, President of the Grand Est regional authority, former minister DOMINIQUE RAMARD Regional councillor for Brittany, responsible for energy transition, Mayor of Saint-Juvat Photo: Emmanuel Pain We are working with GRTgaz on defining a new gas system for Brittany in terms of capacity delivery, usage and local production. Brittany is a major agricultural and food-producing region with a high potential for biomethane production, which we could use locally, especially for road transport. In the longer term, Power to Gas and hydrogen are fields of innovation that the regional authority will seek to explore. We are also working closely with the Pays de la Loire authority on smart energy networks. Our Smile project won the national call for projects. We wish to deliver open energy data to all stakeholders to invent a new, more diverse energy future that is more accountable and more regional. Regional authorities are taking things to a new level on major topics such as energy: they will play an ever more important role in the future due to the ramping up of their skills. Now we need to reflect and take action on recovering waste, biomass, shortened paths, the circular economy, etc. Régions de France is working at the heart of these issues. GRTgaz, due to its activity and positioning, is one stakeholder with whom we are naturally led to communicate and work together. In reality we are implementing a political and administrative reorganisation of France. We are happy to be doing so alongside partners such as GRTgaz. 38 Connect territories with skills, talents and ideas to shape the future 39

22 LISTEN ADVICE FROM STAKEHOLDERS EXPLAIN THE NATURAL GAS ECONOMY CHAIR GRTgaz gives priority to collaboration and listening to society in conducting its business and contributing to a sustainable energy system. We conduct frequent surveys of our customers, suppliers, regional and local decision makers, stakeholders involved in our major work projects and of course our employees. PURPOSE OF STAKEHOLDER CONSULTATION Shed light on fundamental trends and societal expectations in terms of the strategic challenges for GRTgaz; Open prospects, anticipate restrictions, capture weak signals that could have a positive or negative impact on our activity in the future; Contribute through their ideas and reflections to driving forward our orientations and actions in terms of Corporate Social Responsibility (CSR). As an active member of ENTSOG, the European Network of Transmission System Operators for Gas, we maintain a constant dialogue with European regulators, infrastructure operators and users of our networks. Our regional delegates are the primary contact points for regional and local authorities. To ensure seamless integration of changing expectations in society, in the first half of 2016 we set up a stakeholder consultation committee. It features representatives from industry, agriculture, NGOs, European energy sectors, regional and local authorities, specialists in the environment, biodiversity, innovation, socio-economic development and the energy economy. These representatives are selected for their expertise and complementary viewpoints, meeting twice a year in the presence of the CEO, the General Secretary and the CSR director of GRTgaz. In 2016, alongside EDF and Total, GRTgaz decided to support the creation of the Natural Gas Economy Chair. Organised by the Mines ParisTech institution, the University of Paris-Dauphine, IFP School and Toulouse School of Economics, it will help remedy the lack of academic studies in this field. The research work will be focused on three areas: the role of gas in Europe's energy transition; detailed understanding of European regulations; the processing and analysis of market and transmission data. The security of supply will be covered in a crosscutting approach. The Chair is directed by François Lévêque, professor at Mines ParisTech where he teaches industrial economics and energy economics. Two doctoral students have already been recruited. GRTgaz, EDF and Total have committed to support the Natural Gas Economy Chair until the end of With the development of new usages for gas in industry and transport, the growth of renewable gas production and the rising synergy between gas and electricity, the gas industry is gearing up for a genuine revolution. Mines ParisTech, the University of Paris-Dauphine, IFP School and Toulouse School of Economics have developed an excellent scientific policy in the field of the energy economy and have internationally recognised scientific expertise. The work of the Natural Gas Economy Chair is destined to be published in prestigious international reviews. It will provide clear information to aid public decisions in light of the expected changes to the energy mix in France. It will also help economic agents to adapt their strategy and investigate new opportunities opened up by the energy transition. Members: - Gilles BŒUF, President of the Natural History Museum (MNHN) and Member of the Scientific Council on Natural Heritage and Biodiversity to the MEDDE Ministry - Claude CONRARD, Director Public Affairs for France Energy, SOLVAY - Anna CRETI, Economics professor at University Paris-Dauphine at the Geopolitical Centre for Energy and Raw Materials (CGEMP) - Olivier DAUGER, President of the FNSEA Energy Commission - Paul DUPHIL, General Secretary of OPPBTP - Pascale HEBEL, Director of the Consumer Department of CREDOC - Nicolas IMBERT, Executive Director of Green Cross France & Territories - Bertrand PETIT, President and founder of INNOCHERCHE - Jean-Arnold VINOIS, Political consultant on European energy To convince stakeholders, we need to start by listening to and understanding their expectations. Open mindedness and quality of dialogue are priorities for GRTgaz. Pierre Astruc General Secretary FRANÇOIS LÉVÊQUE Director of the Natural Gas Economy Chair Gas in the energy transition was the topic of the first conference for the Natural Gas Economy Chair, held at Mines ParisTech on 20 October This conference brought together industrial operators, regulators, professors and research specialists for two round table meetings on the role of gas in the energy transition within the European Union and the future of gas infrastructure investment in Europe. Security of supply, regional cooperation and costbenefit analysis of new infrastructures, access to LNG, synergy between gas and electricity, global energy system approach, the definition of a European base price for carbon, the role of gas in the transport sector, remuneration for capacities to meet demand for electricity in support of variable renewable energies: many such questions underline the need for robust investigations to feed debate and support decisions. 40 Connect territories with skills, talents and ideas to shape the future 41

23 CO-DEVELOP CUSTOMER RELATIONSHIPS MONETISE THE APCA-FNSEA CONVENTION CONSULTATION Since 2008, alongside TIGF, GRTgaz has managed a permanent forum for consultation amongst all gas market players. An orientation committee sets out the work programme and eleven working groups seek consensus, each covering a topic of common interest. TRANSPARENCY All customers of GRTgaz and TIGF can access the work, which is published on concertationgaz.com. This site is optimised for all types of screens and enriched with new functions, enabling users to follow the news and work group schedules, access associated documents and interact with participants. SIMPLICITY Since February 2016, customers now have access to all useful documents in their TRANS@ctions space: contracts, latest invoices for their connection, technical report, sales call report, satisfaction survey, etc. CLARITY Since April 2016, new general terms and conditions are in force for connections, developed under the Concertation Gaz cooperative agreement and validated by the CRE. Clearer, homogeneous and complete, these terms and conditions are suited to each customer category: industrial operators, distributors and biomethane producers. Amongst the favourable provisions: GRTgaz now assumes the responsibility for modifications to delivery stations to ensure compliance with changes to regulations. Since January 2017, an online catalogue lists all our services available to connected or connectable customers, the associated prices and payment methods. It features the regulated services with tariffs fixed by the CRE and those for which we are able to set a competitive price. Each customer can identify their services and tariffs according to their profile and their requirements. The catalogue is published with the agreement of the CRE and will be subject to public consultation in 2017, so as to improve it where necessary. On 29 November 2016, one year after the signature of the national agricultural protocol (1), GRTgaz, the Permanent Assembly of Chambers of Agriculture (APCA) and the French national farmers union (FNSEA), signed a 3-year partnership agreement to foster regular and constructive dialogue. This agreement focuses on two areas: the development of biomethane and the preservation of biodiversity. DEVELOP BIOMETHANE Anaerobic digestion or methane production from agricultural waste represents a usable potential of 51 TWh by 2030, or over 90% of the total identified by ADEME (2) : 41% from crop waste (biomass), 39% through the reuse of stock effluent and 12% from intermediate crops. In a context of open markets and high volatility of market prices for agricultural products, biogas could represent a stable and foreseeable source of supplementary income for farmers. GRTgaz helps to inform and train agricultural operators, supports methanation projects and seeks to develop injection capacities to favour the development of the chain through reverse flow stations (3). FOCUS WILD FLOWER MEADOW COMPETITION Initiated in 2010 by the Federation of regional nature parks and supported by the chambers of agriculture and environmental protection associations, this competition recognises farmers whose wild meadows represent the best possible balance between agricultural value and environmental value. It contributes to promoting the link between biodiversity and the quality of products. The competition, which we have supported since the outset, was integrated into the general agricultural awards in CUSTOMER SATISFACTION SURVEY SATISFIED OR VERY SATISFIED SHIPPERS CONSUMERS DISTRIBUTORS Products and services 95% 96% 95% TRANS@ctions customer platform CUSTOMER RATINGS IN % 81% 78% Works 74% 93% 88% Business relations 97% 96% 100% Website 97% 93% 100% GRTGAZ IS: SHIPPERS CONSUMERS DISTRIBUTORS Transparent 92% 92% 86% Non-discriminating 97% 98% 100% Independent 86% 94% 100% We install insect hotels in our pipeline markers to encourage the anchoring and reproduction of pollinating or aphid-eating insects. PRESERVE BIODIVERSITY Preserving biodiversity is a major theme in our sustainable development policy (see p. 44). Three areas of cooperation have been identified with the agricultural industry: preservation of wayleaves, environmental compensation and the general agricultural competition for wild flower meadows. A national parity commission will annually review implementation of the partnership, monitor shared interest projects and examine new areas of cooperation under consideration. This convention will also be implemented at regional level. (1) In this protocol of 14 October 2015, GRTgaz reinforces its commitments in terms of gas pipeline routes, land repair and compensation. (2) Estimation of potential sources of substrates usable for methanation, ADEME April (3) Compression units reversing the flow of methane injected into a distribution network back upstream to the transmission network for use elsewhere. 42 Connect territories with skills, talents and ideas to shape the future 43

24 SHARE PARTNERSHIP WITH THE FEDERATION OF REGIONAL NATURE PARKS In 2016, GRTgaz and France's Federation of Regional Nature Parks renewed their partnership for another three years. The aim is to develop in-field actions undertaken with park authorities against the backdrop of a new law on biodiversity and countrysides, deployment of the energy transition and environmental transition and the development of the green and blue grid. This concept brings together ecological continuity that enable animal and plant species to preserve their diversity and secure their survival; our network contributes to this. BIODIVERSITY AND BIOGAS A FINE BLEND Over 90% of the transmission network is located in rural or forested zones. We manage in excess of 32,000 km of way leave corridors, including 8,000 km in natural protected zones. Since 2010, we have worked closely with regional nature parks to improve their ecosystem and landscaping management and to reintroduce biodiversity to our industrial sites. Preserving biodiversity is a major theme in our sustainable development policy and regional commitment. In 2014, GRTgaz received a certificate from the French Ministry of the Environment, Energy and the Sea recognising its commitment to the national biodiversity strategy, on the strength of its practices and its efforts in favour of biodiversity. Forty of the fifty one regional nature parks are recognised as positive energy zones for green growth and are committed to developing renewable energy sources. We will assist them in developing biogas and biofuel. SOLID ACHIEVEMENTS Our partnership with the Federation of Regional Nature Parks has a strong local character. Nine conventions are in place with nature parks: Vosges du Nord, Lorrains, Ballons des Vosges, Avesnois, Vexin Français, Lubéron, Brière, Brenne and Périgord-Limousin. In addition to the wild flower meadow competition and eco-management of way leaves, we are conducting a number of joint projects. Examples: Inventories of flora and insects on wayleaves with the Lorraine park authority and the creation of a local seed bank open to all with the Vosges du Nord park authority; A photographic observatory of landscapes and their evolution with the Ballons des Vosges park and an interactive map system with the Lubéron park, both accessible online; Landscape integration and eco-management of the Taisnières compression station with the Avesnois park; Protection of pollinating insects with the installation of insect hotels in our pipeline markers and no use of pest control products on our sites with the Brière park. A CONTINUOUS IMPROVEMENT APPROACH The work started by the Linear infrastructures and biodiversity club (CILB) involved GRTgaz from the outset as a founder member. Our partnerships with the natural history museum (MNHN) and Natureparif help to continuously improve our practices and obtain deeper knowledge of biodiversity. We also strive to ensure that nature data collected during gas pipeline projects can enrich the national natural heritage inventory managed by the MNHN. In 2016, we identified overlaps between the transmission network and the green and blue grids defined by the regional programmes for environmental consistency. We also collected feedback on alternatives to pest control products tested at over 150 industrial stations. 27 M DEVOTED TO BIODIVERSITY BY NATIONAL WORK PROJECTS 25 COMPRESSION STATIONS OPERATE WITH A BIODIVERSITY ACTION PLAN, INCLUDING 3 FEATURING ECO-GRAZING PASTURES 44 Connect territories with skills, talents and ideas to shape the future 45

25 PRESERVE OUR ARCHAEOLOGICAL AND NATURAL HERITAGE Infrastructure projects are examined in detail and are subject to wide-ranging consultations to determine pipeline routes with the least impact and encourage the development of shared solutions. Stakeholders are informed well upstream. Augmented reality enables us to visualise a future facility in its surrounding environment and to examine, alongside local authorities, residents and associations, what arrangements are required to seamlessly integrate the project into the environment. GAS CONSUMPTION BY REGION IN 2016 (2016 vs 2015 in% change) Brittany Pays de la Loire Nouvelle- Aquitaine +7.2% 15.9 TWh Centre Val de Loire Normandy +11.6% 24.4 TWh +0.4% 44.4 TWh +3.2% 14.8 TWh +6.3% 16.5 TWh Hauts-de-France +11.4% 69.6 TWh +11.3% 81.0 TWh -2.5% 5.6 TWh Île-de-France +14.2% 74.6 TWh +7.4% 21.4 TWh +3.7% 52.3 TWh +26.7% 43.1 TWh Grand Est Burgundy- Franche-Comté Auvergne- Rhône-Alpes 600 M INVESTED IN 2016, OF WHICH 111 M ON THE ENVIRONMENT AND SAFETY 177 M IN LOCAL AREAS 72% OF LOCAL DECISION-MAKERS CONSIDER THAT GRTgaz PLAYS A ROLE IN THE ENERGY TRANSITION. Awareness barometer November 2015 As a partner of the national institute for preventive archaeological digs (INRAP) since 2011, we help preserve any discoveries made upstream of our construction projects. In 2016, the remnants of a Gallo-Roman villa and potteries unearthed on the route of the future Val de Saône gas pipeline were visited on site, with educational visits for 210 schoolchildren from locations crossed by the pipeline in Côte-d'Or. GRTgaz TIGF Occitania Provence- Alpes- Côte d Azur Corsica A special edition of Passion Rando, the magazine for hikers, was published with the French Federation of Hiking Trails and the regional nature parks which signed a convention with GRTgaz. 16 walking trails to discover and fruitful cooperation in terms of biodiversity. GRTgaz has been a partner of the French hiking trail federation since We contribute to the creation and upkeep of hiking trails, the publication of topological guides and the development of enriched mobile applications which promote local natural heritage. We sponsor the Atlas of Local Biodiversity (ABC) alongside the Biodiversity Grants Fund (FDB) and recognize municipalities that get their residents involved in mapping, protecting and promoting the biodiversity of their local area. In 2016, 24 municipalities received awards from the fund, including Châtillon d Azergues (Rhône), Le Subdray (Cher) and La Celle- Dunoise (Creuse). CONTRIBUTE TO THE VITALITY OF THE REGIONAL ECONOMY On large-scale projects, in our calls for tenders we ensure that local and regional companies are involved as the prime contractors or subcontractors, along with employment seekers. To this end we cooperate with the Chambers of Commerce and Industry, Pôle Emploi (govt. employment service), training and professional insertion establishments. We also ensure our procurement process involves establishments employing persons with disabilities and associations helping people in difficulty to find employment. As an employer in almost all the regions of France, we have set up partnerships with multiple engineering schools and several training centres for apprentices in industry. Each year, the GRTgaz Handy Achats awards recognise the best initiatives by our employees in this field. We operate a very active training and apprenticeship programme for young people in conjunction with several industrial training centres (see page 50). 46 Connect territories with skills, talents and ideas to shape the future 47

26 INNOVATE FIRST OPEN INNOVATION CHALLENGE PHILIPPE RICHARD Director of Procurement, Supply and Logistics On 19 April 2016, GRTgaz launched its first Open Innovation Challenge, with the aim of identifying external operational solutions to issues as yet unresolved internally. A PARTNERSHIP APPROACH To implement this new approach driven by the Procurement, Supply and Logistics department (D2AL), we established a project team bringing together the Innovation Mission, the Legal department, the Communications team, our regional delegations and our experts in various activities. We were assisted by the Comité Richelieu, the French association for innovation and growth companies, Paris&Co, the Paris-based business development and innovation agency, as well as other local players such as competitiveness clusters or Chambers of Commerce and Industry. Six calls for projects were published. In all, 154 solutions were proposed by 115 businesses, start-ups, SMEs, middle-market companies and labs located all over France. Of these, 25 were invited to present their innovation to a panel of internal experts and innovation professionals from outside the company. Awards were given to five solutions and a special prize was awarded by the panel. GRTgaz was strongly encouraged by this success and went on to launch its 2017 Open Innovation Challenge: six calls for projects throughout the year and the possibility of unsolicited innovation proposals. AIDAS BAUBONIS President and founder SCEMS Winner of call for projects no.1: Multiply pressure measurement points on the network in an often isolated environment. SCEMS is a fledgling engineering company specialising in the design and construction of special equipment and machines. We proposed a connected object that covers the GRTgaz territory and has a long operating life. At first, we will produce two prototypes for testing with GRTgaz. This challenge enabled us to boost our visibility. Without it, we would probably never have had the idea of contacting GRTgaz, and nor would they have contacted us. Open Innovation is a win-win approach for everyone. ALL INNOVATORS From remote diagnostics with augmented reality technology, VR goggles to train our operators, drones used to inspect networks or augmented reality for operational maintenance, GRTgaz has enriched its cooperative projects with innovative businesses to develop and try out new products and services. We also use the immense creativity of our own employees. Our OSER collaborative platform enables each person to help us innovate by sharing their ideas and searching for a solution together. OSER receives projects from teams competing for the Initiative Challenge, our in-house innovation competition which for the past 12 years has inspired a large number of people to get involved. Over 500 employees took part in teams for the 2016 edition. 55 teams received recognition in eight fields: structural performance and safety; design and construction of industrial structures; risk prevention and management: product and service offerings; human resources; public affairs and sustainable development; procurement, supply and logistics; information systems. We are seeking to implement the solutions selected from the challenge programmes rapidly, in the form of co-development agreements, partnerships, R&D agreements or service contracts depending on the nature of the proposals. The idea is to combine the agility of start-ups and SMEs with our expertise in the gas industry. We ensure that Intellectual Property rights are observed and we are open to financing solutions suited to the needs of start-ups. Indeed, GRTgaz has signed the responsible supplier relationships charter. This commits us to develop equitable trust-based relationships with our suppliers and in particular with SMEs, in a continuous improvement approach. The reverse factoring put in place in early 2017 is an illustration: it enables all our suppliers to obtain payment on their invoices quickly and simply. 4,230 ACTIVE SUPPLIERS 95% FRENCH COMPANIES 649 M PURCHASES IN 2016 (1) INCLUDING 208 M FROM SMES 1.3 M FROM STPA (2) ORGANISATIONS (1) French companies excluding energy. (2) protected and adapted employment. 48 Connect territories with skills, talents and ideas to shape the future 49

27 ANTICIPATE PARTNERSHIP WITH THE NATIONAL EDUCATION SYSTEM In 2016, GRTgaz and players in the gas chain signed a cooperation agreement with the French national education system to create a vocational Baccalauréat for gas network technicians, starting in the new school year Over time this will replace the gas network title created in 2015 in nine apprentice training centres and attended by 90 students on work-study courses in 2016 (ten for GRTgaz). HERVÉ RAMBAUD Director of Human Resources In-field experience enables certain young people to follow their training path more effectively and to secure professional employment thanks to the experience they acquired. For GRTgaz, this is one way of contributing to national training efforts and a primary source of recruitment. The attractiveness of the gas chain is important to maintain the high professional and technical standards of our companies into the future. We are a partner with JobIRL, the leading social network for professional orientation of year-olds. We help them learn about our activities and meet professionals to discuss them. A NEW FIELD OF TRAINING Businesses in the gas industry represent approximately 10,000 technician jobs and 2,000 permanent contract hires for While the energy transition and digitalisation are driving us to rethink the trades of the gas chain, the issue of training is essential to satisfy the requirements of renewing staff levels and the upkeep of skills. The creation of a new training programme recognised by the Minister for Education opens up attractive employment perspectives in future gas chain activities. PROACTIVE WORK-STUDY POLICY In gas transmission operations jobs, the level of technical skills required is high and is obtained above all in the field. Work-study programmes represent a priority recruitment channel. We provide a welcome booklet, hold a new entrants event and promote strong tutor involvement, as part of our efforts to host and support these student trainees as much as possible. Efforts recognised by Happy Trainees label for STUDENT TRAINEES = 6% OF WORKFORCE 72.5% IN TECHNICAL FIELDS 27 STUDENT TRAINEES HIRED ON PERMANENT CONTRACT IN 2016, 23 IN TECHNICAL FIELDS MENTORING SYSTEM TO GUIDE STUDENT TRAINEES SMART AND DIGITAL: GRTgaz IS ACCELERATING Smart grid, big data, predictive maintenance, consumption and usage forecasts for transport capacities, digital mock-ups, mobile applications, data exchange, recruitment, cooperation, training etc.: digital technology is spreading to all company activities. What is the benefit? Greater efficiency, competitiveness, agility, speed and interactivity of benefit to all. To speed up our digital transformation even further, in 2016 the digital team at the Information Systems department created four new departments. The Digital Academy is responsible for rolling out digital culture, bringing GRTgaz closer to business incubators and start-ups, investigating and delivering intelligence on emerging technologies such as the blockchain for example. In 2016, it organised a digital reverse mentoring session between young staff members and the management committee. The Design Lab uses design thinking, an approach centred on the real experience of users and co-design to move quickly from the idea to the prototype. DALILA MADINE Head of the Design Lab The starting point is empathy and direct observation of user behaviours in order to acquire a full and complete vision of their experience. Then we can define the issue, a crucial step which conditions the design space and brings better understanding of the environment where we will be able to create a solution. Next, we generate ideas during creative workshops with users and other internal or external participants who can co-build a solution with us. When a solution is selected, we build a prototype very quickly to test it in actual situations, which enables feedback loops to generate improvements. The Design Lab works internally and with external partners, students and start-ups. Amongst the solutions generated by this approach: a serious game to simulate the operation of the future single marketplace in France in The Digital Factory is dedicated to agile development with deliveries every three weeks and active participation of trade users. In 2016 it designed several smartphone apps which facilitate the work of operators. The Data Lab makes use of GRTgaz data for the benefit of our activities and leads a multi-disciplinary community on governance of our data pool. It works on predicting failures, assistance in balancing, future capacity needs, etc. The lab is housed in a co-working space, the Liberté Living Lab in Paris. Here start-ups share their skills with teams delegated from large businesses. 50 Connect territories with skills, talents and ideas to shape the future 51

28 SECURE 15 th EDITION OF OPPBTP-GRTgaz SAFETY AWARDS THE PROFESSIONAL PREVENTION ORGANISATION for the construction industry (OPPBTP) and GRTgaz held the 15 th edition of the Safety Awards on 7 April These awards recognise exemplary prevention actions by businesses active on pipeline installation sites, construction sites and industrial gas facility renovation sites. The assessments are done by OPPBTP on site. In 2016 ten businesses were recognised, including Clemessy, which installed the industrial electrical, instrumentation and automation facilities at the Cuvilly compression and interconnection station. SAFETY PASSPORT Our partnership with the OPPBTP started in 2001, culminating in the creation of a Safety Training Passport : a qualifying course in the 12 golden rules of safety at GRTgaz. It is mandatory for employees and service providers to observe these GRTgaz rules. The passport helps reduce workplace accidents for contractors working for GRTgaz. The number of workplace accidents resulting in absence dropped from 21 in 2013 to 13 in YANN TOULON Clemessy Metz, Quality, Safety & Environment Manager The energy sector is one of the specialities of the Metz branch. We have worked with GRTgaz for a long time and are very familiar with its activities and requirements. Each project site is different and we prepare them well beforehand. Controlling risks, generating maximum value for our customers, while ensuring the safety of all our employees is an absolute priority for us. The safety coordination office, wearing personal protective equipment, the security of hazardous zones and of course feedback, are all essential. We have safety discussion groups at least once a week on work sites to discuss any issues and propose improvements. Safety inspections are frequent and business managers often attend. It is through this structured and participative approach that we can complete a work project involving 15,000 hours of work, such as the Cuvilly project, without incident. HISTORICAL RESULTS Industrial and individual safety are the best illustrations of a company's professional attitude. Several sites or departments attest to over 1,000, 2,000 or 3,000 days without a workplace accident resulting in absence. To bolter our vigilance and reduce risks, we have defined and implemented Our collective health and safety objectives for In early 2017, we started a new evaluation of the company's safety culture jointly with the Institute for Industrial Safety Culture (ICSI). By comparing it with the previous assessment, we will be able to measure the evolution of our safety culture to identify areas for progress and complete our action plan. In 2016, we completed our ten-year inspection and repair programme on our 32,456 km of pipelines. As part of our continuous improvement approach, the procedures and instructions for structural monitoring and maintenance will be harmonised starting in ,553 SAFETY CONDUCT INSPECTIONS IN 2016 Such visits reinforce dialogue between managers and employees on day-to-day risk management, enable the identification and exchange of best practices and inform about the prior analysis of risks. 12 GOLDEN RULES FOR SAFETY 100% OF WORKERS TRAINED 1 SAFETY COORDINATION OFFICE ON EACH NATIONAL PROJECT SITE 2016 was also a good year in terms of industrial safety, a matter of great vigilance. We recorded four incidents due to works compared to seven in For 2017, we are aiming for zero incidents on works where we are the prime contractor. OCCUPATIONAL SAFETY Number of workplace accidents resulting in absence SHARED SAFETY CHALLENGE Recognise teams who observe requirements and implement the best initiatives. Prizes are awarded to the ten most involved departments. BUSINESS CONTINUITY PLAN Through the training in managing extreme floods between 7 and 18 March 2016 dispensed by our Île-de-France teams, customer safety and continuity of supply was ensured without major setbacks during the flooding in the region during May and June Connect territories with skills, talents and ideas to shape the future 53

29 ACTIVITY ON THE GRTgaz NETWORK HIGHER CONSUMPTION AND STRONG RECOVERY IN ELECTRICITY PRODUCTION After two years marked by rather clement temperatures, in 2016 GRTgaz recorded 9.9% growth in gross gas consumption on its transmission network and +5.7% net of weather correction. Consumption by public distribution networks (61% of the total) rose by 6.4%, and remained almost stable on a weather-corrected basis. Consumption by industrial customers with direct connections, excluding power stations, remains stable. The main consumers are the petrochemical and refinery sectors (32%), agriculture (10%) and metallurgy (7%). Conversions from fuel oil or coal to gas done in 2016 represented 4.2 TWh of energy. In 2016, the cumulative effect of conversions since 2012 prevented the emission of 1.4 million tonnes of CO 2. The consumption of gas-fired power plants has more than doubled. The 13 plants in the French fleet have enjoyed favourable economic and weather conditions. In 2016, the use of gas across the whole French fossil fuel fleet would have avoided the emission of 6 million tonnes of CO 2. PREDOMINANCE OF NORTH-SOUTH FLOWS AND RECOVERY OF LNG ENTRIES DYNAMIC WHOLESALE MARKET Trading volumes on the transmission network grew by 19.6% to reach over 900 TWh. The 2015 creation of the Trading Region South (TRS), a marketplace shared by GRTgaz and TIGF for the South of France, along with the application of new balancing rules, has helped to simplify access to the wholesale market in France and enhanced its attractiveness. CHANGES IN FLOWS 2016 VS TWh + 74% + 2 TWh PEG Nord + 29 TWh + 10% + 11 TWh + 9% - 4 TWh* - 0 TWh - 1% - 10 TWh - 5% + 5 TWh - 0 TWh - 0% + 2 TWh + 12 TWh* + 8% TRS + 5 TWh + 9% + 24 TWh + 36% - 20 TWh - 67% NATURAL GAS CONSUMED ON THE GRTgaz NETWORK (1) Gross consumption in TWh PUBLIC DISTRIBUTION NETWORKS INDUSTRIAL OPERATORS INDUSTRIES (2) POWER PLANTS / % % + 0.1% + 118% TOTAL % (1) excluding own consumption. (2) including cogeneration. interconnections with LNG terminals higher entries via Northern pipelines to cope with higher levels of consumption recovery of LNG entries since historical low in 2015 new transit route to Belgium, transit to Spain stable, down towards Italy interconnections with adjacent networks North-South link very busy since July: activity rate 2016 (95%) vs (90%) saturation 183 days (2016) vs. 126 days (2015) consumption storage net draw-off POINTS TOTAL FLOW 2015/2016 TERMINALS MONTOIR FOS-TONKIN / FOS CAVAOU DUNKIRK LNG INTERCONNECTIONS DUNKIRK GASSCO ALVERINGEN (EXIT) TAISNIÈRES L TAISNIÈRES H OBERGAILBACH OLTINGUE (EXIT) JURA (EXIT) 18 TWh 60 TWh 2 TWh 179 TWh 5 TWh 50 TWh 139 TWh 90 TWh 10 TWh 2 TWh + 74% + 9% + 2 TWh - 5% + 100% + 14% - 5% + 36% - 67% - 14% NORTH-SOUTH LINK (1) 131 TWh + 9% The volumes transmitted on the GRTgaz network have increased by 4.6%. * Consumption and withdrawals for whole TRS area. PIRINEOS SPAIN (EXIT) 31 TWh - 1% (1) including JTS and market coupling. 131 SHIPPER CUSTOMERS 764 ACTIVE INDUSTRIAL CUSTOMERS TWh TRANSMITTED Entries from Northern gas pipelines represent almost 85% of supplies. LNG imports have recovered since the historical low in 2015, reaching almost 15% of the total, including 2 TWh unloaded at the new Dunkirk terminal. Transit to neighbouring countries represents 9% of flows compared to 12% in Stable towards Spain, sharply dropping towards Switzerland and Italy, it is expanding towards Belgium via the Flanders artery. The North-South link was very busy with a 95% utilisation rate and 183 days of saturation, compared to 90% and 126 days in A congestion situation appeared in the south-east at the start of winter due to a sharp drop in LNG unloading volumes at Fos-sur-Mer towards the end of the year ENTRIES TO GRTgaz NETWORK in TWh LNG TERMINALS WITHDRAWAL FOR STORAGE FROM OTHER TRANSMISSION NETWORKS TOTAL VOLUMES TRANSMITTED ENTRIES /2016 OTHER TRANSMISSION NETWORKS % LNG TERMINALS % EXITS FROM GRTgaz NETWORK in TWh TOWARDS OTHER TRANSMISSION NETWORKS INJECTION STORAGE GROSS CONSUMPTION TOTAL VOLUMES TRANSMITTED EXIT LEVELS /2016 CONSUMPTION (1) % OTHER TRANSMISSION NETWORKS % 906 TWh STORAGE % TOTAL % STORAGE % TOTAL % TRADED AT GAS TRADING POINTS (1) including own consumption. 54 Network activity 55

30 ENVIRONMENTAL, SOCIAL AND SOCIETAL DATA A CSR COMMITMENT CHARTER CERTIFIED ISO 9001 ISO (1) ISO VOLUNTARY UNDERTAKING RECOGNISED BY THE NATIONAL STRATEGY FOR BIODIVERSITY POWER CONSUMPTION % OF THE ENERGY TRANSMITTED GREENHOUSE GAS EMISSIONS (2) 1.37 G OF CO 2 /KWh TRANSMITTED. STABLE GHG EMISSIONS: +0.4% OF TONNES OF CO 2 EQUIVALENT EMITTED COMPARED WITH 2015 (840 KT TEQ CO 2 EMITTED IN 2015) NATURAL GAS EMISSIONS PREVENTED DURING WORKS 11.3 MILLION M 3 IN 2016 (9.8 MILLION M 3 IN 2015) OF WHICH 5 MILLION M 3 WITH GAS BOOSTER (3) BIOMETHANE PRODUCTION CAPACITIES CONNECTED 28 GWh year WASTE RECOVERED OR RECYCLED 63% OF NON-HAZARDOUS WASTE (4) 80% OF HAZARDOUS WASTE NETWORK INTEGRITY 3,970 KM OF PIPELINES INSPECTED BY INSTRUMENTED PISTON OR SURFACE ELECTRIC MEASUREMENT IN % OF THE TEN-YEAR INSPECTION & REPAIR PROGRAMME COMPLETED 5 NETWORK INCIDENTS (6 IN 2015) SUPERVISION OF SUBCONTRACTED WORK 69,960 DECLARATIONS CONCERNING THE NETWORK RECEIVED AND PROCESSED 4 INCIDENTS DUE TO SUBCONTRACTOR WORK (7 IN 2015) 2,916 GRTgaz EMPLOYEES IN FRANCE 48% SENIOR TECHNICIANS, SUPERVISORS 40% MANAGEMENT 12% WORKERS, EMPLOYEES, TECHNICIANS 103 NEW HIRES (PERMANENT) OF WHICH 27 FORMER STUDENT TRAINEES FTE STUDENT TRAINEES IN 2016 APPROX. 100 PARTNER SCHOOLS & TRAINING CENTRES TRAINING 79,594 TRAINING ALMOST 60% OF EMPLOYEES ABSENT AT LEAST ONCE FOR TRAINING IN 2016 OR 6.67 DAYS PER EMPLOYEE RECEIVING TRAINING DIVERSITY LABEL AFNOR CERTIFICATION GENDER EQUALITY WOMEN REPRESENT: 22% OF PERMANENT STAFF 27% OF MANAGEMENT 28% OF 2016 HIRES DISABILITIES 101 EMPLOYEES 2 HIRED IN % EMPLOYMENT RATE OF WHICH 3.46% THROUGH DIRECT EMPLOYMENT 2.23% THROUGH PROTECTED AND ADAPTED ORGANISATIONS (5) LABOUR RELATIONS 10 COLLECTIVE AGREEMENTS SIGNED IN 2016 RESPONSIBLE PURCHASING (6) SIGNATORY OF THE RESPONSIBLE SUPPLIER RELATIONS CHARTER 649 M TO FRENCH BUSINESSES, OF WHICH 208 M TO SMES 1.24 M TO PROTECTED & ADAPTED EMPLOYMENT OCCUPATIONAL SAFETY 0.7 ACCIDENTS PER MILLION HOURS WORKED (2 IN 2015) SUBCONTRACTOR SAFETY ON OUR WORK SITES 4.8 ACCIDENTS PER MILLION HOURS WORKED IN 2016 (3.6 IN 2015) SOLIDARITY AND SPONSORSHIP 57 PARTNERSHIPS / 654 K EXAMPLE: FEDERATION OF REGIONAL NATURE PARKS; MINES PARISTECH CHAIR 19 PROJECTS SUPPORTED / 159 K, EX.: JOBIRL FURTHER INFORMATION: CSR INDICATORS (1) 23 out of 28 compression stations in service (2) Greenhouse gas (3) Natural gas re-compression technique (4) Earth and materials extracted from site excavations (5) Support organisations and services through employment, insertion organisations (6) Excluding energy. 56 Network activity 57

31 FINANCIAL DATA CONSOLIDATED BALANCE SHEET AT 31 DECEMBER IN MILLIONS NET INTANGIBLE ASSETS NET TANGIBLE ASSETS 8,141 7,978 MARKETABLE SECURITIES 5 5 LOANS AND DEBT AT AMORTISED COST EQUITY STAKES IN AFFILIATED COMPANIES CONSOLIDATED INCOME STATEMENT DEFERRED TAX CREDITS 5 7 NON-CURRENT ASSETS 8,500 8,353 LOANS AND DEBT AT AMORTISED COST - - IN MILLIONS REVENUE 1,993 1,956 PURCHASES (OPEX) (319) (366) PERSONNEL CHARGES (317) (313) DEPRECIATION, IMPAIRMENT AND PROVISIONS (458) (430) OTHER OPERATING INCOME AND CHARGES (200) (204) TRADE AND OTHER ACCOUNTS RECEIVABLE INVENTORIES OTHER ASSETS CASH AND CASH EQUIVALENTS CURRENT ASSETS TOTAL ASSETS 9,086 8,994 INCOME FROM RECURRING OPERATIONS INCOME FROM EQUITY AFFILIATES 5 4 INCOME FROM RECURRING OPERATIONS IMPAIRMENT ON TANGIBLE, INTANGIBLE AND FINANCIAL ASSETS (0) (1) SCOPE EFFECTS - - OTHER NON-RECURRING ITEMS (11) 9 NET OPERATING INCOME FINANCIAL PROFIT / (LOSS) (109) (94) CORPORATE TAX (40) (220) NET INCOME NET INCOME FROM RECURRING OPERATIONS IN MILLIONS EQUITY ATTRIBUTABLE TO GROUP 3,292 3,129 NON-CONTROLLING INTERESTS - - EQUITY CAPITAL 3,292 3,129 PROVISIONS FINANCIAL LIABILITIES 3,783 3,770 DEFERRED TAX LIABILITIES NON-CURRENT LIABILITIES 5,094 5,175 PROVISIONS 13 4 FINANCIAL LIABILITIES TRADE AND OTHER ACCOUNTS PAYABLE OTHER LIABILITIES CURRENT LIABILITIES TOTAL LIABILITIES AND EQUITY 9,086 8, Network activity 59

32 GRTgaz REGIONAL DELEGATES THINK YOU'VE READ EVERYTHING? BROWSE OUR REPORT FROM ANOTHER ANGLE, JUST SCAN THIS QRCODE FIND OUT MORE ONLINE AND ON SOCIAL MEDIA The GRTgaz code of good conduct Ten-year development plan for the GRTgaz transmission network Multi-year baseline forecast for gas demand in France Key figures 2016 twitter.com/grtgaz youtube.com/user/grtgazofficiel linkedin.com/company/grtgaz facebook.com/grtgaz/ 04 download on App Store, Google Play, Windows Phone Store opendata.reseaux-energies.fr TIGF REGISTERED HEAD OFFICE: Immeuble Bora 6, rue Raoul Nordling Bois-Colombes Cedex France +33 (0) ENGINEERING DIVISION, PROCUREMENT, SUPPLY AND LOGISTICS DEPARTMENT Immeuble Clever 7, rue du 19 mars Gennevilliers Cedex France +33 (0) Thierry Daniel NORTH EAST 24, QUAI SAINTE-CATHERINE NANCY +33 (0) Frédéric Moulin SEINE VALLEY 2, RUE PIERRE TIMBAUD GENNEVILLIERS CEDEX +33 (0) USEFUL LINKS opendata.grtgaz.com acer.europe.eu entsog.eu cre.fr concertationgaz.com gasinfocus.com ademe.fr institut-economie-circulaire.fr fdbiodiversite.org inrap.fr mnhn.fr parcs-naturels-regionaux.fr ffrandonnee.fr and Randomobile app 02 Amaury Mazon CENTRE & ATLANTIC COAST 10, QUAI ÉMILE-CORMERAIS BP SAINT-HERBLAIN +33 (0) Georges Seimandi RHÔNE VALLEY & MEDITERRANEAN COAST 33, RUE PÉTREQUIN BP LYON CEDEX +33 (0) GRTgaz is a limited liability company with capital of 538,165,490. Registered head office: 6, rue Raoul Nordling Bois-Colombes, France. Registered on Nanterre Trade and Companies Register No Design and production: - Editorial consultant: Chantal Caillat-Murat - Information & Consulting. Photo credits: GRTgaz media library, Jérôme Cabanel, Dominique Coulier, Circusprod/Roland Mouron, Nicolas Dohr, Franck Dunouau, Philippe Dureuil, Europe vue du ciel, Getty Images, GRTgaz/Mathieu Thouseau, GRTgaz/Maxence Attard, Olivier Jacques, Knoth Kai-Uwe, Brigitte Leforestier, Luc Marechaux, Cédric Martigny, Henri Mayor, Hubert Mouillade, Bruno Paget, Emmanuel Pain, Jean-Luc Stadler, Alexis Toureau. ISSN No. pending. This document was printed on paper of certified origin by an environmentally responsible print company. May / Certifié PEFC / pefc-france.org 60 Network activity