INDEX. Snam in the European scenario...25 The pipelines towards Europe...26 International development, overview...28 Snam, the European strategy...

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2 SNAM: the mission Snam is a European leader in the construction and integrated management of natural gas infrastructure. It favours the right conditions for fair energy costs by managing the gas system efficiently, developing infrastructure and providing integrated services for the market. It promotes the integration of the European networks, including through strategic partnerships with the biggest operators in the sector, along the main continental energy corridors. Snam follows an ethical and socially responsible business model, capable of generating value for the Company and for the community in which it operates, with acknowledged professionalism and transparent dialogue with all its stakeholders, respecting the environment and the regions. A clear and sustainable long-term development strategy, based on one of the most substantial investment programmes in Italian industry, has enabled the Company to attract Italian and foreign capital, boosting growth and employment. With over 6,000 employees, Snam is active in natural gas transportation, storage, regasification and urban distribution. Snam manages a national transportation network that is more than 32,000 km long, including eight storage facilities, one regasification plant and a local distribution network that covers over 55,000 km in total. 1

3 INDEX The Energy Environment... 5 Natural gas reserves in the world (2014)... 6 Natural gas production in the world (2014)... 8 Natural gas consumption in the world (2014)... 9 Gas prices in the world...10 The main LNG streams in LNG worldwide, areas of interest...14 Focus, LNG in Europe...16 Storage capacities in the world at the end of EUROPE Main gas reserves supplying Europe...20 Energy consumption by source in the main countries...21 Natural gas consumption by country ( )...22 ITALY Natural gas consumption by sector...23 Natural gas supply in Italy in Snam in the European scenario...25 The pipelines towards Europe...26 International development, overview...28 Snam, the European strategy...30 Snam in the Italian gas system...33 Snam, the company profile...34 The journey of natural gas in Italy through Snam infrastructures...36 (Snam Rete Gas, GNL Italia, Stogit, Italgas) Regulatory framework: businesses tariff scheme...42 Main economic-financial data...43 Snam in the bond market...44 Snam in the bond market: the credit rating...45 Appendix...47 Glossary...48 Reference heat capacity...50 Units of measurement...51 Transported natural gas composition...52 References

4 The Energy Environment 5

5 The Energy Environment The Energy Environment Natural gas reserves in the world (2014) Trillion m 3 Total: OECD countries: 10.4% Non OECD countries: 89.6% * Source: BP statistical review of world energy *Of which 50.1 in Russia and Turkmenistan. 4.1% S. & Cent. America 6.5% North America 7.6% Africa 8.2% Asia Pacific 31.0% Europe & Eurasia 42.6% Middle East 6 7

6 The Energy Environment Natural gas production in the world (2014) 3,524,092 million m 3 (+0.3% compared to 2013) The Energy Environment Natural gas consumption in the world (2014) 3,496,974 million m 3 (-0.7% compared to 2013) Asia (CHina INCLUDED): 450,191; 13% MIDDLE EAST: 553,017; 16% Africa: 197,218; 5% FORMER SOVIET UNION: 877,958; 25% OECD NorTH America: 937,585; 27% OECD EuropE: 253,089; 7% OECD Pacific: 78,742; 2% Latin America: 176,292; 5% Asia (CHina and hong kong INCLUDED): 483,664; 14% MIDDLE EAST: 437,672; 12% Africa: 119,890; 3% FORMER SOVIET UNION: 662,833; 19% Latin America: 164,964; 5% OECD Pacific: 233,773; 7% OECD NorTH America: 941,763; 27% OECD EuropE: 452,415; 13% Usa 544, , , , ,853 Russia 572, , , , ,564 Iran 58, , , , ,561 Canada 181, , , , ,038 Qatar 24, , , , ,988 China 27, , , , ,160 Norway 53, , , , ,580 Turkmenistan 47,153 66,210 69,050 78,440 86,912 Saudi Arabia 37,680 74,688 81,092 81,954 83,839 Algeria 82,132 81,830 85,280 81,019 79,723 Million m Usa 661, , , , ,411 Russia 391, , , , ,481 China 24, , , , ,637 Iran 62, , , , ,088 Japan 83, , , , ,267 Canada 91, , , , ,447 Saudi Arabia 37,679 74,688 81,092 81,954 83,183 Germany 87,728 85,848 85,814 87,764 77,483 UK 101,812 82,724 78,191 77,958 70,246 United Arab Emirates 32,770 63,035 67,869 65,116 67,711 Million m 3 Source: IEA, Report Natural gas information, 2015 edition. 8 Source: IEA, Report Natural gas information, 2015 edition. 9

7 The Energy Environment Gas prices in the world The Energy Environment Henry Hub (USA) (16 October October 2015) Zeebrugge TTF (EU) (16 October October 2015) 32 /MWh: /MWh: /MWh: /MWh: % % oct nov dec jan feb mar apr may jun jul aug sep oct 2015 PSV (Virtual exchange point) (16 October October 2015) /MWh: /MWh: National Balancing Point (North Sea) (16 October October 2015) /MWh: /MWh: % % oct nov dec jan feb mar apr may jun jul aug sep oct oct nov dec jan feb mar apr may jun jul aug sep oct oct nov dec jan feb mar apr may jun jul aug sep oct

8 The Energy Environment The main LNG streams in % of the gas is consumed in the production countries, the residual 29% is traded: 333 (325 in 2013) billion m 3 by LNG (Liquefied Natural Gas) and 664 (710 nel 2013) billion m 3 by pipeline CAGR of trade: LNG +7.5%, pipeline +4%. Billion m 3 12 Export 19 export countries. Qatar, Malaysia, Australia and Indonesia: 57% of total LNG exports. Gas liquefaction plants across the world 387 billion m 3 of liquefaction capacity. Global utilization 81%. +40% of world capacity in Many new plants under construction, mainly in Australia (7 new plants within 2018). * Of which: Belgium 2.9 France 7.1 Italy 4.5 Spain 15.5 UK 11.3 USA Trinidad Tobago 19.3 south America Europe Europe Source: BP statistical review of world energy 2015, GIIGNL, The LNG Industry 2014 and IGU World LNG Report Europe 41.3* Algeria 17.3 Nigeria 25.3 Europe Europe Japan Japan Qatar Import 30 import countries. Asia (Japan, South Korea, China, India, Taiwan): 73% of total LNG imports (60% in 2010). Europe: 13.6% (30% in 2010). LNG regassification plants across the world 976 billion m 3 of regasification capacity. 6 new plants completed in 2014: 5 in Asia, 1 in Europe (Lithuania). Global utilization 33%, European utilization 22%. 21 new plants under construction (of which 15 in Asia) and 7 under development. South Korea Taiwan India India 18.9 China 27.1 South Korea 51.1 South Korea Taiwan 18.1 Indonesia 21.7 Malaysia 33.9 Japan Australia % of LNG trade flow compared to % of LNG trading is spot (5% in 2005). Most of the demand comes from Asia (75%), most of the offer comes from Middle-East (40%) and Asia-Pacific Area (38%). China Taiwan Japan The Energy Environment Japan 13

9 The Energy Environment LNG worldwide, areas of interest 14 Europe (see focus) LNG imports decreased in almost every country apart from the UK (main increase worldwide after India). The European quota for worldwide imports decreased from 14.3% in 2013 to 13.6% in The two main importers in Europe are the UK (3.5% of the world s total) and Spain (3.3% of the world s total, net of reload). The region imports about 10% of the world s total. The utilization rate remains low in the three main importers: UK (22%), Spain (19%), France (27%). Italy s level is 30%. USA The USA will be an export LNG country. Three projects to construct liquefaction plants were authorised in 2014 (Final Investment Decision- FID). By 2020 it should become the world s third country for liquefaction capacity, with 29 new projects waiting for FID. Source: GIIGNL, The LNG Industry 2014 and IGU, World LNG Report The Energy Environment Asia Large increase in India s demand for imports, largely due to the limited availability of hydroelectric energy. Large decrease in imports for South Korea, caused by the mild climate and several reactivations of nuclear plants. Japan continues to be the main LNG importer worldwide (37% of the total); together with South Korea, China, India and Taiwan, it imports 73% of the total (60% in 2010). In 2014, five new regasification plants were completed in Asia: two in China, one in Japan, one in South Korea and one in Indonesia. Out of the 21 regasification plants under construction or reinforcement worldwide, fifteen are in Asia. Africa The main exporter countries are: Nigeria and Algeria. Egypt, due to less production and more internal demand, has seen its export capacity fall to almost zero (-88%), and is expected to become an importer of LNG. Asia-Pacific Australia, Indonesia, Malaysia represent 26% of total LNG exports. In Papua New Guinea a new liquefaction plant became operational and allowed the country to become the 19th LNG exporter worldwide. In Australia, out of the seven liquefaction plants expected by 2018, only one (the Queensland Curtis) became operational in Qatar Qatar is the main exporter worldwide: 31% of the worldwide liquefaction capacity. It uses 100% of the plants. 15

10 The Energy Environment Focus, LNG in Europe The Energy Environment Re-export activity around the world has doubled in the past two years, featuring more and more in Europe where about 95% of the activity is concentrated. Klaipeda, in Lithuania, is the only new regasification plant that became active in Europe in reloading countries Spain Belgium France 7% 6% 3% 1% 1% 4% 60% Snohvit - Statoil Netherlands Portugal South Korea USA 18% Teesside - Excelerate Energy Brazil Isle of Grain - National Grid Grain LNG, Ltd Klaipeda - Klaipeda LNG Liquefaction plants Regasification plants Milford Haven - Dragon LNG Milford Haven - South Hook LNG Gate - Gate Terminal Zeebrugge - Fluxys Fos Cavaou - Fosmax LNG Fos Tonkin - Elengy Panigaglia - GNL Italia Montoir - Elengy Porto Levante - Adriatic LNG Bilbao - BBG Mugardos - Reganosa OLT - Offshore LNG Toscana Marmara Ereglisi - Botas Barcelona - Enagas Sagunto - Saggas Sines - REN Atlantico Alliaga - Egegaz Huelva - Enagas Skikda - Sonatrach Revithoussa - DESFA Cartagena - Enagas Arzew - Sonatrach Marsa-el-Brega - Sirte oil Co

11 The Energy Environment The Energy Environment Storage capacities in the world at the end of 2014 billion m major European countries * *of which 15.9 of Snam. Source: GSE Map (May 2015) Source: IEA, Report Natural gas information, 2015 edition. 19

12 The Energy Environment EUROPE Main gas reserves supplying Europe* Norway 1.9 Russia 32.6 Energy consumption by source in the main countries FRANCE: 248 Mtoe Oil: 28.4% Coal: 3.7% Natural Gas: 13.0% Other: 6.9% Hydro: 2.1% Nuclear: 45.9% The Energy Environment GERMANY: 307 Mtoe Nuclear: 8.3% Hydro: 0.5% Other: Oil: 11.9% 32.9% Natural Gas: 20.9% Coal: 25.5% Netherlands 0.8 Algeria Libya Egypt Qatar 24.5 spain: 114 Mtoe Oil: 41.1% Nuclear: 13.1% Hydro: 2.9% Other: 12.0 % Natural Gas: 20.7% Coal: 10.2% UK: 176 Mtoe Oil: 36.2% Coal: 9.2% italy: 142 Mtoe Hydro: 3.4% Other: 15.6% netherlands: 71 Mtoe Natural Gas: 35.6% Nigeria 5.1 Trillion m3 Oil: 32.7% Nuclear: 9.4% Hydro: 0.3% Other: 6.7% Oil: 40.1% Nuclear: 1.5% Other: 5.8% Source: BP Statistical Review of World Energy, June 2015 Coal: 17.0% Natural Gas: 33.9% Coal: 12.6% Natural Gas: 40.0% * Europe Source: IEA, Report Natural gas information, 2015 edition. 21

13 The Energy Environment Natural gas consumption by country ( ) ITALY Natural gas consumption by sector The Energy Environment Italy* France UK Germany Spain Netherlands Bcm Demand by sector Residential Thermoelectric Industrial* Other Gas Demand Bcm Billion m Billion m Italy France UK Germany Spain Netherlands Residential Thermoelectric Industrial* Other Source: IEA, Report Natural gas information, 2015 edition. * Source: Snam annual reports. 22 * Includes the consumption of the Industrial, Agricultural and Fishing, Chemical Synthesis and Automotive sectors. Source: Snam annual reports. 23

14 The Energy Environment Il contesto energetico di riferimento Natural gas supply in Italy in 2014 GAS DEMAND: 61.9 billion m 3 Domestic production: 7.1 Storage balance, export and other: -1.1 Import: 55.9 of which 4.5 by LNG Snam in the European scenario Origin details (billion m 3 ) Other 4.8* Norway 2.7 Russia 24.1 Holland 6.6 Algeria 6.8 Libya 6.5 Qatar 4.4 Source: Snam estimates on Ministry of Economic Development data. * Of which just 0.3 billion m 3 from extra EU countries

15 Snam in the European scenario The pipelines towards Europe Snam in the European scenario Available capacity, bcm Main active pipeline Planned pipeline Turkish stream: 63 bcm/year, offshore way 100% Gazprom, onshore way 50% Botas 50% Gazprom; announced starting of the construction 2016, but the agreement between the parts is not found yet. Tanap: 16 bcm/year, shared by Socar 58% Botas 30% and BP 12%. Estimated start 2019 TAP: 10 bcm/year, shared by Socar 20%, BP 20%, Statoil 20%, Fluxys 19% Enagas 16%, Axpo 5%, Estimated start GALSI: 8 bcm/year, shared by Sonatrach 41.6%, Edison 20.8%, Enel 15.6%, SFIRS 11.6% and Hera 10.4%. Project postponed many times during last years and currently not in the agenda. MIdcat: 8 bcm/year, is a community interest project that strengthens the connection between Spain and France and allows additional flows from the Mediterranean (Algeria, LNG) towards central Europe. Estimated start Meg: bcm from North Sea* 5 Midcat 4 Galsi Medgaz: 8 Transmed:33 Northstream** 3 Tap Greenstream: 10 1 Turkish Stream 2 TANAP Yamal Brotherhood Trans Balkan Bluestream Around 280 bcm coming from Russia Source: Ihs Cera, March 2015, and Entsog Map, May * 86 towards the Continent, 50 towards UK. ** An expansion of about 55 billion m 3 is under discussion. 27

16 Snam in the European scenario International development, overview Snam in the European scenario TAG The largest import pipeline bringing Russian gas from Austrian/Slovak border to Italy. Diversification of regulatory and country risk. Integrating the East-West gas corridor Strategic opportunity to establish reverse flow capability to Southern Germany and Eastern Europe. National Networks LNG terminal International Assets TIGF Key position along the East-West energy corridor. Diversification of regulatory and country risk. Development opportunities: - Value creation from French gas areas unification with additional incentivized investments. - Storage increased competitiveness. - De-bottlenecking of the Spanish gas grid. Snam holding 84.47%* *Equal to 89.22% of economic rights Snam holding 31.5% in joint venture with Fluxys (50%-50%) Snam holding 40.5% Snam holding 15.5% Interconnector Represents last section of the South- North corridor connecting to the continental grid one of the major European gas markets. Bi-directional flow capacity provides flexibility and diversification of supply sources to UK and Continental Europe

17 Snam in the European scenario Snam in the European scenario Snam, the European strategy Within the european energetic policy, Italy holds an important role, as it is placed in the middle of the main Europan gas Corridor. In line with the principles of the European Third Energy Package, which promotes the integrated development of infrastructures and common rules for network access in different countries, and in order to take advantage of the privileged position it enjoys in Europe s gas corridors, Snam has increased its focus on the international scene in recent years. The Strategic Plan is in line with the last years Company strategy, which from 2012 saw Snam engaged in strategic partnerships and M&A operations, led to the reshaping of its role within the European infrastructure system: moving from an assets operator, Snam has transformed into a market facilitator. JANUARY 2012 Snam and Fluxys agree to evaluate future joint strategies, which aim to promote cross-border flows and to link the most important gas trading infrastructures in the North-West and South of Europe. FEBRUARY/SEPTEMBER 2012 Acquisition of a 31.5% stake of Interconnector UK (16.41% from eni and 15.09% from E-on), of a 51% stake of Interconnector Zeebrugge and of a 10% stake of Huberator through a joint ventury with Fluxys. This joint acquisition is a first important milestone in pursuing the aim of an integrated European gas network and follows the announcement in January 2012 SEPTEMBER 2015 MOU with Socar for the sharing of the expertise and best practices in the construction and operation of facilities necessary for the transport of natural gas from the Republic of Azerbaijan and other producing countries to the European markets through Italian infrastructures, with the aim of further strengthening diversification and security of gas supplies to Europe. August 2012 MoU with Fluxys for developing and marketing reverse flow capacities from South to North (and vice versa) between Italy and the UK. With this agreement, both companies enhance their cooperation in the spirit of the European Third Energy Package. DECEMBER 2014 Completion of the acquisition of the stake (84.47%) held by CDP GAS in Trans Austria Gasleitung GmbH (Tag), approved by the Board of Directors on 12 September Tag represents a strategic opportunity to realize reverse fl ow capacity with South Germany and Eastern Europe. FEBRUARY/JULY 2013 Acquisition of a 45% stake of TIGF, heading a consortium in which GIC holds a 35% stake and EDF the remaining 20%. TIGF represents a strategic platform with the aim to develop the integration of European gas markets, and can contribute to increase their liquidity and guarantee the security of supply in France and Europe

18 Snam in the Italian gas system 32 33

19 Snam in the Italian gas system Snam, the company profile Consolidation perimeter Group Insurance Services 100% GASRULE INSURANCE LIMITED Snam in the Italian gas system INTERNATIONAL ASSOCIATES Transport 100% Regasification 100% Storage 100% Distribution 100% TIGF: 40.5% tag: 84.47% IUK: 31.6% JV with Fluxys SNAM RETE GAS gnl italia stogit italgas prisma: 15.5% Distribution 99.69% napoletanagas Distribution 100% aes torino Distribution 100% acam gas toscana energia: 49% OTHER DISTRIBUTION Snam, shareholders at June 2015 Shareholding Geographical Break Down at June % 9.54% 8.25% 14.77% 5.65% 28.98% eni CDP Gas USA and Canada Italy* CDP Reti Continental Europe Bank of Italy UK and Ireland 51.31% 0.77% Treasury Shares Institutional Investors Retail Investor 11.08% 16.51% 51.99% Rest of the world 0.03% 34 *Italy includes retail investors shareholdings and treasury shares. 35

20 Snam in the Italian gas system The journey of natural gas in Italy through Snam infrastructures Snam in the Italian gas system PASSO GRIES TARVISIO GORIZIA CAVARZERE (regasification) the gas, imported or produced, is transported...distributed... ITALGAS Municipalities under concession PANIGAGLIA LIVORNO OLT (regasification) SNAM RETE GAS National Trasportation Network Compression station Entry points STOGIT Storage fields MAZARA DEL VALLO GELA...stored and consumed 37

21 Snam in the Italian gas system Snam in the Italian gas system TRANSPORT: Thanks to investments to develop and upgrade infrastructure, the network transportation capacity has always grown in the past years. In line with the provisions of the EU Third Energy Package, the Company is committed, through specific investments, to facilitating trans-european flows, thanks to the development of reverse-flow transport infrastructure. The gas from abroad is injected into the national network via eight entry points where the network joins up with the import pipelines (Tarvisio, Gorizia, Gries Pass, Mazara del Vallo and Gela) and with the LNG regasification terminals (Panigaglia, Cavarzere and Livorno). Once imported or regasified, gas is transported to local distribution networks, to withdrawal points along the Regional Network, or to large final clients, either thermoelectric plants or industrial consumers. Snam Rete Gas allocates transportation capacity to the shippers upon their request. Then they gain the right as Users to inject and withdraw at any time during the thermal year, a quantity of gas not greater than the daily capacity allocated. Terms to access the transportation service are set out in the Network Code, which is updated by Snam Rete Gas on the basis of the criteria issued by the Authority. Shippers may sell and trade gas injected PASSO GRIES into the National Network, at a Virtual Trading Point, thanks to a supporting TARVISIO computer platform developed and made available by Snam Rete Gas. LNG REGASIFICATION: Through the Panigaglia regasification plant, Snam provides the Italian gas system with the proper diversification of sources, while ensuring a high degree of flexibility in terms of supply. The process for the extraction of natural gas from the fields, its liquefaction for transportation by ship and subsequent regasification for use by the users, forms the LNG chain. The process begins in the country of the exporter, where the natural gas is brought to a liquid state by cooling it to -160 C and subsequently loaded onto tankers for shipping to the LNG regasification terminal. At the regasification terminal, the LNG is unloaded, then heated and returned to a gaseous state before being injected into the natural gas Transportation network. Natural gas is also injected into the national Transportation network by the LNG terminal at Panigaglia (La Spezia), which is owned by the Snam subsidiary GNL Italia and is able to regasify 17,500 m3 of LNG per day; when operating at maximum capacity, the terminal can therefore inject over 3.5 billion m3 of natural gas a year into the Transportation network. In the last years the terminal worked at a low rate; the lower volume regasified was mainly due to the trend in global LNG demand, which produced particularly high demand in the Middle Eastern markets, to european market s detriment (see LNG focus). GORIZIA National (9,559 km) and regional (22,780 km) gas pipeline grid: 32,339 CAVARZEREkm (regasification) Panigaglia terminal Gas injected into the grid: bcm Gas imported: bcm Gas production: 6.92 bcm Gas liquefied: 0.01 bcm PANIGAGLIA Tankers loads: 1 Daily regasification capacity: 17,500 m3 of LNG Yearly maximum capacity of injection into the grid: 3.5 bcm PASSO GRIES TARVISIO GORIZIA CAVARZERE (regasification) PANIGAGLIA Import by entry points (bcm/year) 38 Tarvisio: Mazara del Vallo: 6.78 Passo Gries: Gela: 6.51 Cavarzere: 4.47 Livorno: 0.00 Panigaglia: 0.02 Gorizia: 0.0 LIVORNO OLT PANIGAGLIA (regasification) LIVORNO OLT (regasification) PANIGAGLIA SNAM RETE GAS National Trasportation Network Compression station GNL ITALIA SNAM RETEEntryGAS points GNL ITALIA National Trasportation Network Regasification terminal Regasification terminal Compression station Entry points MAZARA DEL VALLO GELA 2014 data 2014 data 39

22 Snam in the Italian gas system Snam in the Italian gas system STORAGE: Snam storage capacity has sizeably increased over the last decade, thanks to relevant investments both to increase capacity of existing fields and to develop new sites. The gas storage system fulfils different requirements between supply and consumption that are derived from the seasonality of demand. The injection phase into the National Network is generally concentrated between April and October, while the withdrawal phase from fields, treatment and delivery to users via the Transportation Network is usually concentrated between November and the following March. Storage also ensures that strategic quantities of gas are available to compensate for any lack of or reduction in non-eu supply or crises in the gas system. Stogit is the major Italian operator and one of the leading European natural gas storage operators, via eight storage fields in Lombardy (four), Emilia-Romagna (three) and Abruzzo (one). Stogit, the largest operator in Italy and one of the main operators in Europe, was incorporated in 2000 as part of the eni Group and acquired by Snam in It operates under a concession system. According to economic and technical efficiency criteria, the Company uses an integrated infrastructure system made of storage fields, treatment plants, compression stations and an operating dispatching system. Gas moved into the system: bcm Gas injected: 8.13 bcm Gas withdrawn: 7.57 bcm Strategic storage capacity: 4.5 bcm Available storage capacity : 11.4 bcm Concessions: 10 (8 active) 2014 data STOGIT Storage fields STOGIT Storage fields DISTRIBUTION: The distribution network is multiregional : it covers the entire Italian mainland and Sicily. Snam is continuously committed to guaranteeing the highest quality, efficiency and safety across the entire network, through maintenance and development investments. The distribution business involves the service of distributing gas through local pipelines, from delivery points at the city gates to the re-delivery points at end-customers, including both households and businesses. Like the storage business, the distribution business also operates on a licensing basis, with local public authorities appointing service providers through the granting of a concession. At the end of 2013, Italgas, which Snam acquired from eni in 2009, held gas distribution concessions in 1,435 municipalities. It is the leading domestic distributor of natural gas in Italy. It operates using an integrated infrastructure system, much of which is owned by Italgas, which includes cabins for the uptake of gas from Transportation Network, pressure-reducing facilities, local transportation and distribution networks (55,278 km) an redelivery points (technical equipment on which meters are located, where final users are residential customers, commercial and service businesses, as well as small industrial clients). The consolidated subsidiaries of Italgas also include Napoletanagas, which distributes gas across urban networks in Campania. In September 2012 Italgas won the tender to distribute natural gas in Rome, securing the operational management of Italy s biggest concession by size (nearly 5,000 km of network) and by number of users (more than 1.3 million redelivery points) for another 12 years. Distribution network: 55,278 km Gas distributed into the grid: 6.5 bcm Concessions: 1,437 municipalities Active meters: 6,408, data ITALGAS Municipalities under concession ITALGAS Municipalities under concession 40 41

23 Snam in the Italian gas system Snam in the Italian gas system Regulatory framework: businesses tariff scheme Main economic-financial data TRANSPORT DISTRIBUTION STORAGE REGASIFICATION RAB wacc reale pre-tasse INCENTIVeS on new investments EFFICIENCY X-factor Re-valued historical cost 6.3%* WACC +1% on new investment carried out after 31 December 2013 to offset the regulatory lag +1% over 7 years (regional network development investments) +1% over 10 years (national network development investments) +2% over 10 years (entry point development investments) 2.4% on operating costs Re-valued historical cost Parametric method for central assets Distribution: 6.9%* Metering: 7.2%* (*) With review of the exogenous variables starting from January Incentives relating to service quality 1.7%** on distribution operating costs 0%** on metering operating costs Re-valued historical cost Deduction of restoration costs Re-valued historical cost 6.0%* in %* % over 8 years (on expansions of existing capacity) +4% over 16 years (on the development of new storage fields) As of 1 January 2015: retention for 8 years of 20% of new capacity auction revenues over and above the referenc revenues 0.6% on operting costs As of 1 January 2015: 1.4% on operating costs WACC +1% on new investment carried out after 31 December 2013 to offset the regulatory lag +2% over 16 years (new terminals or increasing capacity at existing terminals by more than 30%) 0% on operating costs (**) With review starting from January In accordance with the Letta Decree, which in 2000 implemented the European Directive for the liberalisation of the gas market, the Electricity and Gas Authority has established tariff systems in each sector, defining the criteria for the setting of tariffs for different regulatory periods, which normally last four years. The revision of exogenous variables for all the group businesses is under way; it will have effects starting from January Snam (million) Total revenue 3,529 3,566 of which regulated 3,491 3,506 EBITDA 2,803 2,776 EBIT 2,034 1,973 Net profit 917 1,198 Net debt 13,326 13,652 Capex 1,290 1,313 Snam Rete Gas, 2014 (transport) Regulated REVENUES: 2,058 million EBIT: 1,196 million Stogit, 2014 (storage) Regulated REVENUES: 403 million EBIT: 318 million Italgas, 2014 (distribution) Regulated REVENUES: 1,026 million EBIT: 477 million GNL, 2014 (regasification) Regulated REVENUES: 19 million EBIT: 0 million TRASPORT and dispatching Regasification of LNG STOrage DISTRIbution January 2014 / December 2017 January 2014 / December 2017 January 2015 / December 2018 January 2014 / December

24 Snam in the Italian gas system Snam in the Italian gas system Snam in the stock market Snam in the bond market: the credit rating Snam Euro Stoxx Utilities Since 2013 Snam has undertaken a process of financial optimisation aimed to achieve a competitive cost of debt over time as well as to make the debt structure more consistent with business requirements, both in terms of financing maturity and of exposure to changes in interest rates. Such activity resulted in the EMTN programme continuation (resolved on June 2015 for a maximum total amount confirmed at 12 billion euros) and in the terms re-negotiation of certain pre-existing bank loans, as well as in the increasing contribution of loans by institutional lenders such as EIB and CDP. A financial efficiency that allows Snam to enjoy of the positive evaluation by the credit rating agencies FTSE mib -5% 0% 5% 10% 15% 20% 25% October 16, 2014 / October 15, 2015 Year to date (January 1, 2015 / October 15, 2015) last update 19 February 2015 last update 9 December 2014 PUBLISHING DATE 23 July 2015 > > > 2014 YIELD*: 5.5% TSR** : 405.7% rating for long-term debt Baa1 rating for long-term debt BBB rating for long-term debt BBB+ > > > rating for short-term debt Not assigned rating for short-term debt A-2 rating for short-term debt F2 > > > outlook outlook outlook Stable Stable Stable * Calculated as the ratio between the 2014 dividend and the share price at 15/10/2015 (4.54). ** Considers the reinvestment of the dividends in the Snam share calculated on the share price at 15/10/2015 (4.54)

25 Appendix Glossary Reference heat capacity Units of measurement Transported natural gas composition References 46 47

26 Appendix Appendix Glossary Economic and financial terms Economic and financial terms: net investments made for operating reasons, being the sum of net working capital and non-current assets. Weighted Average Cost of Capital (WACC): indicates the remuneration of the invested capital as recognised by the Authority (RAB). Net debt: Indicator of the ability to meet financial obligations. Represented by gross financial debt minus cash and cash equivalents as well as other financial receivables not held for operations. Incentives on investments: remuneration on the investments to be added to the base return. Capex: costs of long-lasting assets where useful life does not expire over one reporting period. Gross Operating Margin (EBITDA): unit of measurement to assess the group s operating performance, as a whole and in the individual business segments, in addition to EBIT. Determined by the difference between revenue and operating costs. Leverage: Indicator of financial structure. Measures a company s level of debt and is calculated as the percentage ratio of net financial debt to net invested capital. Regulated revenues: revenues from the regulated activities of the company. Net profit: EBIT minus result from financial operations and income taxes Operative profit (EBIT): difference between revenues and costs in a given period; therefore the income from operations before costs and revenues from financial operations and taxes. Regulatory terms Negotiated access: access system to the network based on individual contracts at prices freely negotiated between the parts (producer/suitable client and network operator). Regulated access: access system to the network based on individual contracts (producer/suitable client and network operator) at prices regulated by a proper agency (Autority for Electricity Energy and natural Gas). Unbundling: ownership, corporate and accounting separation of import, transportation, distribution and storage activities of the vertically integrated companies of the gas, aimed at the beralisation of the market. Regulatory period: period of time (usually four years) for which criteria are defined for setting tariffs for transport and dispatching, storing, distributing, regasifying liquefied natural gas. We are currently in the third regulatory period for all the four business.naturale e di rigassificazione del gas naturale liquefatto. Tariff: unit prices applied to the natural gas business. Commercial terms Thermal year: period of time into which the regulatory period is divided, currently coinciding with the calendar year. National Network: set of pipelines, compressor stations and infrastructures that, at national level guarantee the transport of natural gas, through interconnection with international transport networks, production sites, to the delivery points for the distribution and use of natural gas. Liquified Natural Gas, LNG: Natural gas comprised essentially of methane liquefied by cooling at around -160 C, at atmospheric pressure, to make it suitable for tanker transportation or reservoir storage. In order to be injected into the transportation network, the liquid must be reconverted into a gas at regasification plants and brought to the operating pressure of the pipelines. Upstream: activity of reserch, drilling and coltivation of hydrocarbons. Downstream: activities following the reserch and drilling of oil. In more details it regards the refining and processing of the oil to obtain products ready to be used; the storage and transport of oil products; the distribution and commercialization of fuel and lubricant through the distribution network Gas chain: totality of activities concerning the natural gas market, from the production/importation to the distribution to the final client. Natural Gas: is a gas consisting primarily of methane and, at lower level, ethane, propane and higher hydrocarbons. The natural gas injected into the transportation network must respect a specific quantity to guarantee the interchangeability of the gas

27 Appendix Appendix Reference heat capacity Units of measurement CONVERSION FACTORS LHV (MJ/kg) HHV LHV (kcal/kg) HHV Vapour coal 26.1 / 6,250 / Sulcis coal 22.3 / 5,330 / Green lumber 10.5 / 2,500 / Coke of coal 29.3 / 7,000 / Reference crude oil ,000 10,600 Dense combustible oil ,600 10,150 Fuel oil ,200 10,800 Virgin Naphta ,500 11,400 LPG ,000 12,000 To convert in multiply for inch in millimeters mm 25.4 feet ft meters m statue mile mi. kilometers km nautical mile mile kilometers km short ton sh. ton ton t long ton long ton ton t pound lb. kilometers kg kilogram kg newton N 9.81 pound per square inch psi bar bar 68.95x10-3 kilogram per square cent. kg/cm³ bar bar atmosphere atm bar bar cubic feet ft³ m3 m³ 28.32x10-3 gallon U.S. gal liters l barrels (42 gal. U.S.) m kilocalories kcal joule J 4,185 kilocalories kcal kilowattora kwh 1.163x10-3 british thermal unit Btu joule J 1,055 horse power (meters) CV kilowatt kw horse power hp kilowatt kw gas m3 m3 kilowatt hour kwh gas m3 m3 tons of oil equivalent toe EQUIVALENCES 50 To convert in multiply for oil barrels bbl oil tons t daily oil barrels bbl/d yearly oil tons t/a 50 m3 liquid methane m3 m3 methane gas m3 600 liquid methane tons t m3 methane gas m3 1,400 daily cubic feet ft3/d yearly m3 m/a kilocalories kcal gas m3 m3 0.11x10-3 Btu millions MMBtu gas m3 m megajoule MJ gas m3 m gas m3 m3 megajoule MJ

28 Appendix Appendix Trasported natural gas composition References Algeria North Russia LNG Nat. Libya Europe prod. Helium % Mol Nitrogen = Carbon dioxide = Methane = Superior hydrocarbons = High heating value MJ/Smc Low heating value MJ/Smc Wobbe index MJ/Smc Volume mass kg/smc Z Web sites: Energy Information Administration: International Energy Agency: BP global: Ministero Sviluppo Economico: Snam: Gas LNG Europe: Ihs Cera: Report: Snam Annual report Natural Gas information 2015, IEA report BP statistical Review of World Energy, June 2015 World LNG Report Edition, International Gas Union The LNG Industry , International Group of LNG Importers (GIIGNL) IGU, World LNG Report 2015 Bloomberg data 52 53

29 Piazza Santa Barbara, San Donato Milanese (MI) Tel Limited Company Full paid-up capital 3,696,851, Milan Company Register - Tax code and VAT No R.E.A. (Economic-Admin. Roll) No Graphics Inarea and Gosmarty Pre-printing Gosmarty Printing AG Printing This publication, a consulting handbook which collects data on the natural gas sector, is the new edition of a manual issued between 1978 and 2000 that in the course of the years has been named by the people of the business metanino. November 2015

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