Press Conference Background GAS EXPORT AND ENHANCING RELIABILITY OF GAS SUPPLIES TO EUROPE June 9, 2015 GAS SALES

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1 Press Conference Background GAS EXPORT AND ENHANCING RELIABILITY OF GAS SUPPLIES TO EUROPE June 9, 2015 GAS SALES In 2014 Gazprom Group sold of gas worth RUB 1,801.2 billion beyond the FSU. Western Europe accounts for some 80 per cent of gas supplies from Russia and Central Europe for 20 per cent. The Western European market and Turkey absorb the bulk of Russian supplies. In 2014 Gazprom Group exported of gas to these countries. The major consumers are Germany 40.3, Turkey 27.3 billion cubic meters, Italy 21.7, the UK 15.5 and France 7.6. Natural gas sales in Western Europe and Turkey by Gazprom Group in 2014, Germany 40.3 Italy 21.7 UK 15.5 France 7.6 Austria 4.2 Finland 3.1 Greece 1.7 Netherlands 4.7 Denmark 0.4 Switzerland 0.3 Turkey 27.3 Turkey, which is among Gazprom s major partners, should be mentioned in particular. Gazprom Group supplied 27.3 of gas to the Turkish market via the Blue Stream and Trans-Balkan gas pipelines last year. It is planned that the Turkish Stream gas pipeline will run via Turkey. The Central European natural gas market is especially important due to its geographic proximity to Russia. In the recent years the partnership relations have been developing against the background of dramatic geopolitical changes and aspiration of countries to diversify their energy supply sources. The largest importers are Poland 9.1, Hungary 5.4 and

2 2 Slovakia 4.4. These countries receive circa 70 per cent of gas sold in this part of Europe. Natural gas sales in Central and Eastern Europe in 2014, Poland 9.1 Hungary 5.4 Slovakia 4.4 Bulgaria 2.8 Serbia 1.5 Czech Republic 0.8 Croatia 0.6 Romania 0.5 Slovenia 0.4 Bosnia and Herzegovina 0.2 Macedonia 0.1 In 2014 Gazprom Group supplied over 48 of gas to the former Soviet Union. The largest importers are Belarus 19.6 and Ukraine Natural gas sales in FSU in 2014, Belarus 19.6 Ukraine 14.5 Kazakhstan 5.1 Moldova 2.8 Lithuania 2.5 Armenia 1.8 Latvia 1.0 Estonia 0.4 Georgia 0.3 Kyrgyzstan 0.1 GAS TRANSMISSION With a view to ensure supplies to European consumers, Gazprom conveys natural gas via the following routes: the Uzhgorod and Balkan corridors, the Yamal Europe, Blue Stream and Nord Stream gas pipelines across 10 European countries (Austria, Belgium, Bulgaria, Czech Republic, Germany, Hungary, Netherlands, Poland,

3 3 Romania, Slovakia). At the same time, the Uzhgorod corridor, the Yamal Europe and Nord Stream gas pipelines are the main Russian gas transmission routes. The 1,224-kilometer Nord Stream gas pipeline connects the largest gas fields of Russia directly with purchasers of Russian natural gas in Europe through the Baltic Sea. The first gas pipeline string with the annual capacity of 27.5 of gas was commissioned in June The second string launched in October 2012 boosted the Nord Stream annual capacity to 55 of gas. The 1,213-kilometer Blue Stream gas pipeline with the annual capacity of 16 billion cubic meters of gas came onstream in December 2002 to supply gas directly to Turkey across the Black Sea. Blue Stream supplemented the existing Trans-Balkan gas transmission corridor running from Russia to Turkey via Ukraine, Moldavia, Romania and Bulgaria of gas was supplied via Blue Stream in In May 2015 the total gas supplies via Blue Stream exceeded 117 billion cubic meters since the pipeline commissioning. The diversified routes and the gas pipeline networks in the Czech Republic and Germany allow Gazprom re-distributing gas flows among the Uzhgorod corridor, the Yamal Europe and Nord Stream gas pipelines. It is especially important during the winter demand peaks as well as in the summer period when individual sections of the gas transmission system undergo repair both in Russia and abroad. On December 1, 2014 Gazprom and Turkish Botas inked the Memorandum of Understanding on constructing the Turkish Stream gas pipeline with the annual capacity of 63 of gas from Russia to Turkey via the Black Sea. GAS STORAGE The use of UGS (underground gas storage) facilities located near consumer markets is an efficient way of securing uninterrupted, reliable and flexible natural gas supply. Taking into account the growing export of Russian gas and creation of new gas supply routes from Russia to Europe, the Gazprom Management Committee resolved in 2011 to continue building up UGS capacities abroad in order to bring the aggregate working gas capacity to at least 5 per cent of the annual export supplies. From 2006 to 2014 Gazprom Group s gas storage capacity in Europe grew from 1.40 to 5.4, while the daily deliverability increased from to 74.6 million cubic meters. In Germany Gazprom Export operates Rehden jointly with WINGAS. It is one of Europe s largest UGS facilities with the capacity above 4.

4 4 In Austria Gazprom Export, WINGAS and RAG operate the Haidach UGS facility. Upon completion of the second phase, its working gas capacity totaled 2.83 billion cubic meters. The Haidach UGS facility secures the reliability of natural gas export towards the Baumgarten hub as well as to consumers in Slovenia, Croatia, Hungary, Austria, Germany, Slovakia and Italy. Gazprom Group together with VNG implements the project for constructing the Katharina UGS facility in Germany. Four UGS caverns with the aggregate working volume of over 210 million cubic meters are currently operational. In 2017 Katharina will contain seven caverns. The total volume of the UGS facility will exceed 600 million cubic meters, while the daily withdrawal capacity will total 26 million cubic meters. The UGS facility assures reliable supply to Western Europe at the Mallnow, Waidhaus, Gaspool and NCG hubs as well as deliveries via the Nord Stream gas pipeline. In Serbia Gazprom Group has delivered the Banatski Dvor UGS project with a working gas capacity of 450 million cubic meters. The Group holds a 51 per cent stake in the project. The UGS facility secures the reliability of natural gas export to Hungary, Serbia, Bosnia and Herzegovina. In the Netherlands the Bergermeer UGS facility was put into operation in It has a strategic location as well as considerable working gas reserves, and Gazprom owns 1.90 of the total storage space there. The construction of the Damborice UGS facility with the working gas capacity of 456 million cubic meters is underway in the Czech Republic. GAS AS VEHICLE FUEL Reducing harmful vehicle emissions is a global challenge. It can be resolved, inter alia, through using eco-friendly types of fuel. An efficient way of cutting down the emissions is conversion to natural gas an affordable, eco-friendly and less expensive fuel as compared to traditional petroleum products. CO 2 emissions of natural gas-fired vehicles are a quarter lower than those of gasoline-fired vehicles. Methane-driven engines emit about 95 per cent less carbon oxide than the diesel ones, while the particulate emissions of natural gas-fired engines are almost at a zero level. An overriding problem for the development of this segment is the lack of CNG and LNG filling infrastructure. Once such a network is created, it will be possible to enjoy the advantages of gas-fired cars, vessels and locomotives to the full extent. Gazprom Group is interested in developing the NGV market, especially in Europe, where the fuel alternatives are much sought for due to the stiffening of environmental

5 5 standards. A key role in promoting the use of gas as a vehicle fuel is assigned to the expanding gas filling infrastructure. In Germany Gazprom Germania operates 28 CNG filling stations. Vemex, integrated into Gazprom Group, owns 12 gas filling stations in the Czech Republic, including two garage ones, and plans to expand this network in the neighboring Slovakia. The Group operates one LNG filling station for buses in Poland and the second filling station is currently under construction.