GAZPROM INVESTOR DAY GAS BUSINESS FEBRUARY 2015 HONG KONG, SINGAPORE

Transcription

1 GAZPROM INVESTOR DAY GAS BUSINESS FEBRUARY 215

2 AGENDA PRESENTATION SPEAKERS Strategy Dmitry Lyugai Member of Gazprom Management Committee Head of the Department Upstream Vsevolod Cherepanov Member of Gazprom Management Committee Head of the Department Export Alexander Medvedev Deputy Chairman of Gazprom Management Committee Finance Andrey Kruglov Deputy Chairman of Gazprom Management Committee Head of the Department Oil Business Alexei Yankevich Member of the Management Board of Gazprom Neft Deputy CEO for Economics and Finance of Gazprom Neft Power Generation Denis Fedorov Head of Gazprom Directorate General Director of Gazprom Energoholding Project Finance Oleg Nagovitsyn General Director of Gazprom Investproject 2

3 DISCLAIMER This presentation has been prepared by OJSC Gazprom and its consolidated subsidiaries (the Company), and comprises the slides for a presentation to investors concerning the Company. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities representing shares in the Company, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision. No reliance may be placed for any purposes whatsoever on the information contained in this presentation, or any other material discussed at any presentation or on its completeness, accuracy or fairness. The information in this presentation should not be treated as giving investment advice. Care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable. However, the contents of this presentation have not been verified by the Company. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in or discussed at this presentation. None of the Company or any of their respective members, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company s intentions, beliefs or current expectations concerning, among other things, the Company s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. No person is under any obligation to update or keep current the information contained herein. By attending the presentation you agree to be bound by the foregoing limitations. 3

4 5 19 STRATEGY UPSTREAM 26 EXPORT 37 FINANCE 4

5 STRATEGY DMITRY LYUGAI MEMBER OF GAZPROM MANAGEMENT COMMITTEE HEAD OF THE DEPARTMENT 5

6 GAZPROM AT A GLANCE SHORT OVERVIEW Gazprom is a Russian global energy company Its major business lines are: Geological exploration Production Transportation and Storage Processing and sales of gas, gas condensate and oil Sales of gas as a vehicle fuel Generation and marketing of heat and electric power GAZPROM is involved in hydrocarbon exploration and production projects in more than 1 foreign countries, incl. Algeria, Bolivia, Bosnia and Herzegovina, Great Britain, Hungary, Venezuela, Vietnam, Iraq, Kyrgyzstan, Romania, Tajikistan, Uzbekistan. History 196 First commercial gas production from Russian gas field Dagestanskye Ogni (Derbent city) 1943 First Russian trunk gas pipeline Buguruslan-Kuybyshev (Samara) 1948 Natural gas production department set up at the Ministry of oil industry 1965 USSR Gas Industry Ministry established 1973 First Russian gas delivered to Europe 1989 USSR Gas Industry Ministry restructured into Gazprom State Gas Concern 1993 ON THE BASIS OF GAZPROM STATE GAS CONCERN RUSSIAN JOINT-STOCK COMPANY "GAZPROM" (RAO "GAZPROM") WAS ESTABLISHED WHICH WAS TRANSFORMED IN 1998 INTO OPEN JOINT-STOCK COMPANY "GAZPROM" (OAO "GAZPROM") 25 Gazprom acquired Gazprom neft (formerly Sibneft ) Gazprom entered into the energy business (consolidated under Gazprom Energoholding ) Achievements for 22 years Gazprom revenue structure 1 12 tcm GAS PRODUCED 546 mm tons OIL AND GAS CONDENSATE PRODUCED 33 THOUSAND KM OF NEW PIPELINES BUILT 8.6 tcm NEW GAS RESERVES DISCOVERED % 1% 7% 69% GAS OIL POWER SOURCE: GAZPROM DATA 1 According to International Financial Reporting Standards (IFRS) 6

7 GAZPROM IN FIGURES Gas reserves Oil and gas condensate production #1 WORLD #1 RUSSIA 17% 72% Gazprom gas reserves (A+B+C 1 ) 36 tcm, incl. onshore 29 tcm, offshore 7 tcm RUSSIA Gazprom Group oil and gas condensate production 69 mm tons Gas production 9% Number of active oil production wells 7,246 #1 WORLD #1 RUSSIA 14% 73% Gazprom Group gas production 487 bcm Number of active gas production wells 7,263 Number of producing fields 131 Electric power and heat generation Total electric power generating capacity 39 GW Total heat generating capacity 73 Tcalh Total electric power generated 163 billion kwh Total heat generated 113 mm Gcal Gas transport system Length of Gazprom s trunk pipelines in Russia 169 thousand km Aggregate active capacity of 26 UGSF 1 in Russia over 7 bcm Access to active capacity of UGSF in Europe above 4 bcm Natural gas transported via GTS 2 in Russia 659 bcm Gas processing Processing volumes 32 bcm Gas processing capacity 54 bcm Oil and gas condensate refining 66 mm tons 1 Underground gas storage facility 2 Gas transportation system SOURCE: GAZPROM ANNUAL REPORT 213, GAZPROM IN FIGURES FACTBOOK Marketing Largest gas export company European gas market share 3% Russian gasoline station oil product sales share 13% Russian electric power generation share 15% Personnel Number of employees 459,5, including: gas production, transportation, underground storage and processing subsidiaries 228,6 Gazprom neft 62,8 Gazprom Energoholding 5,8 overseas companies 27,4 All figures are dated of Calorific value of natural gas = 8,85 kcal/m 3 (2 С ) 7

8 GAZPROM GROUP S MISSION AND STRATEGIC GOAL MISSION RELIABLE, EFFICIENT AND BALANCED SUPPLY OF NATURAL GAS, OTHER ENERGY RESOURCES AND REFINED PRODUCTS TO CONSUMERS STRATEGIC GOAL ESTABLISH ITSELF AS A LEADER AMONG GLOBAL ENERGY COMPANIES BY DIVERSIFYING SALES MARKETS, ENSURING RELIABLE SUPPLIES, IMPROVING PERFORMANCE AND UTILIZING R&D POTENTIAL BUSINESS TYPE EXPLORATION AND PRODUCTION TRANSPORTATION AND STORAGE PROCESSING AND ENERGY PRODUCTION MARKETING AND SALES 8

9 WORLD GAS DEMAND Share of natural gas in world total primary energy consumption 6% 3% 17% 4% 9% % 23% 23 FORECAST Natural gas consumption by region 213 3% 13% 2% 19% 3.6 tcm 26% 14% 5% NORTH AMERICA LATIN AMERICA OECD EUROPE OTHER EUROPE AND EURASIA 26% 33% 28% 23 FORECAST 5% 25% 4.8 tcm 24% 5% MIDDLE EAST AFRICA ASIA OCEANIA GAS OIL COAL NUCLEAR RENEWABLES 13% 12% 16% 9

10 bcm; RR bn RR/mcm GAZPROM ON THE RUSSIAN DOMESTIC MARKET Structure of Gazprom s gas sales revenue, Gas deliveries to Russian consumers ,725 Total final consumption COAL OTHER 14% 58% 27% 14% 15% 214 EUROPE FSU COUNTRIES RUSSIA 3,394 2, GAZPROM GROUP S SALES IN RUSSIA (BCM) REVENUE (RR BN) DOMESTIC AVERAGE PRICE (RR/MCM) 2% OIL bcm 2 Gazprom is responsible for the large-scale Program for Expansion of Gas Infrastructure in Russian Regions. Level of natural gas gasification in Russia grew from 53.3% to 65.3% between 25 and 213. Length of Russian gas distribution system, operated by Gazprom Group, is 716 thousand kilometers ENERGY STRATEGY OF RUSSIA (PROJECT) OTHER OIL COAL 15% 13% 2% 36 52% 52% GAS 1 not including custom duties 2 incl. gas purchases from other companies GAS SHARE STABILIZATION IN FUEL AND ENERGY BALANCE GAS SOURCE: GAZPROM IN FIGURES FACTBOOK, GAZPROM DATA 1

11 EUROPE: GAZPROM S TRADITIONAL MARKET Forecast gas production vs. consumption in Europe Gazprom s pipeline gas deliveries to Europe bcm CONSUMPTION PRODUCTION ~4 3 2 bcm decrease of indigenous gas production in Europe no success in shale gas developments close of nuclear energy development increase of gas consumption in transportation sector new sectors of gas consumption 1 regasification terminals network development European policy diversification of suppliers and supply routes regulatory frameworks in energy sector become tougher policy in energy savings and energy efficiency subsidizing of renewable energy sources Shale gas in Europe an expected setback Gazprom s share in the European market Estimated shale gas technically recoverable resources 16.9 tcm Poland 4.2 France 3.9 Ukraine 3.6 Romania 1.4 Rest of Europe % 3% MAX Recent progress and current state of development MIN SOURCE: WOOD MACKENZIE, EIA, PLATTS, ERI RAS, IEA, IHS, RYSTAD ENERGY, BP JSC "GAZPROM" OTHER SOURCES OF GAS 11

12 bcm GAZPROM: UPSTREAM DEVELOPMENT North of West Siberia and Yamal peninsula Fields Pre-Yamal shelf Pechorskoye Sea shelf Kharasaveiskoye Bovanenkovskoye Pestsovoye Yubileynoye Severo-Kamennomysskoye Kamennomysskoye-sea Urengoiskoye Key Gazprom gas greenfields Field productivity plateau, bcm/year 1 Urengoyskoye (Achimov deposits) 25 Pestsovoye (Neocomian-Jurassic) 2 Yubileynoye (Apt-Albian, Senomanian deposits) 2 Bovanenkovskoye 115 Kharasaveiskoye 32 Severo-Kamennomysskoye 16 Kamennomysskoye-sea 15 Kirinskoye 6 Kirinskiy licensed section 16 Chayandinskoye 25 Kovyktinskoye 35 RUSSIA Chayandinskoye Eastern Siberia and Far East Fields Kovyktinskoye «Sakhalin-3» Kirinskoye Kirinskiy licensed section Gas field Continental shelf Prospective sources of Gazprom s gas production OTHER NEW FIELDS EAST SIBERIA AND FAR EAST FIELDS YAMAL MEGAPROJECT 2 JSC GAZPROM NEFT min 23 min 22 max 23 max OPERATING FIELDS SOURCE: GAZPROM IN FIGURES FACTBOOK, GAZPROM DATA 1 whole number rounding 12

13 KEY CURRENT AND PROSPECTIVE RUSSIAN NATURAL GAS EXPORT DESTINATIONS Sakhalin-Khabarovsk-Vladivostok Power of Siberia Altai project - current Russian natural gas export destinations - prospective and ongoing Russian natural gas export projects - operating LNG projects - prospective LNG projects 13

14 Mln t/year GAZPROM IN LNG MARKET 8 6 World LNG demand and production forecast LNG PLANTS UNDER CONSTRUCTION OPERATING LNG PLANTS OPTIMISTIC CONSUMPTION FORECAST PESSIMISTIC CONSUMPTION FORECAST World total in 214: 19 LNG exporting countries, 3 LNG importing countries, incl. 3 LNG exporting/importing countries 39 operating LNG plants with total capacity of 414 bcm (32 mm t/year), 19 LNG plants under construction with total capacity of 178 bcm (129 mm t/year) 18 operating and 21 under construction regasification terminals Baltic LNG RUSSIA 4 Vladivostok LNG Sakhalin-2 2 LNG EXPORTERS LNG IMPORTERS OPERATING LNG PLANT PROSPECTIVE LNG PLANT SOURCE: WOOD MACKENZIE LNG EXPORTERS/IMPORTERS 14

15 GAS INFRASTRUCTURE DEVELOPMENT IN EASTERN SIBERIA AND FAR EAST REGIONS Transportation site Date when put into operation (not earlier) Length, km Trunk pipeline Power of Siberia 218 4, Fields Power of Siberia trunk pipeline Pipelines: existing under construction possible designed Operating trains of LNG plants Prospective trains of LNG plants CHINA Production sites Date when put into operation (not earlier) Plateau production, bcm/year Chayandinskoye Kovyktinskoye (incl. Chikanskoye field)

16 RUSSIAN CHINA GAS DEAL MAIN CHARACTERISTICS CONTRACT VOLUME BCM per YEAR CONTRACT LIFETIME YEARS CHINA GAS CONSUMPTION 1 YEARS AGO 1% OF CHINESE GAS MARKET AFTER RAMPING UP PERIOD COMPARABLE WITH TRUNK GAS PIPELINE LIFE TIME INVESTMENT $ BLN CONTRACT VALUE $ BLN CAPITAL INVESTMENT COMPARABLE WITH AUSTRALIAN GORGON PROJECT ($54 BLN*), RUSSIAN PROJECT VOLUME 75% HIGHER TOTAL AMOUNT OF GAZPROM INVESTMENT PROGRAM FOR LAST 1 YEARS SOURCE: * WOODMACKENZIE, IHS PFC ENERGY 16

17 RUSSIAN CHINA GAS DEAL BOTTOM OF THE ICEBERG GAS DEAL For Gazprom Market diversification Russian pipeline natural gas popularization in the Asia Pacific Region market Sales of Russian pipeline natural gas increase Market niche decreasing for new high-cost LNG suppliers For CNPC Favorable pricing versus LNG Pipeline supply sources diversification Natural gas supply sources diversification (from LNG) Strengthening the company s position in the gas supply market Basic for west route negotiation Long-term leadership in a strategic market helium Benchmark for Asia Pacific Region gas prices RELIABILITY OF SUPPLIES DUE TO LACK OF TRANSIT RISK For Russia Trade and economic Russia-China cooperation widening Trade balance equalization New well-paid high-skilled jobs Fuel and energy balance optimization in Eastern Siberia and the Far East regions Contribution to GDP, taxes and duties Reduction of unemployment rate in Eastern Siberia and the Far East regions Geopolitical interests Eastern Siberia and the Far East regions gasification Gas processing and gas chemical industries development. High added value products: helium, ethylene, propylene, polyethylene, polypropylene, ethylene glycol Contribution to Russian natural gas production Large order for manufacturers For China Trade and economic Russia-China cooperation widening New well-paid high-skilled jobs Fuel and energy balance optimization (gas share increasing) Providing secured sources of supply for growing gas demand Border territories gasification Increase of chemical production imports from Russia Large orders to manufacturers. New jobs Ecological issues solution: decreasing emissions of CO 2, SO 2, NO x and ashes 17

18 FORECAST OF CAPITAL INVESTMENTS Structure of CAPEX by gas business segment average annual approx. 24 bln USD* GAZPROM S DEVELOPMENT PROGRAM OVER A TEN- YEAR PERIOD PROCESSING, LNG TRANSPORT (incl. UGS ** ) 12 % 46 % GAZPROM'S INVESTMENT PROGRAM INNOVATIVE DEVELOPMENT PROGRAM TO 22 PRODUCTION EXPLORATION 38 % 4 % Structure of CAPEX by major project * May vary depending on USD/RUB & EUR/RUB exchange rate ** UGS is underground gas storage UGSS is unified gas supply system 28% YAMAL MEGAPROJECT EASTERN SIBERIA AND THE FAR EAST* OTHER PROJECTS* 53% 19% * exploration; existing and new production and transport projects, processing and LNG projects 18

19 UPSTREAM VSEVOLOD CHEREPANOV MEMBER OF GAZPROM MANAGEMENT COMMITTEE HEAD OF THE DEPARTMENT 19

20 214 GEOLOGICAL EXPLORATION RESULTS Russian gas reserves Gazprom s huge hydrocarbon reserves and longest reserve life 4% Unallocated fund Independent Producers 24% bboe (37 yrs) 12 Gazprom 72% 1 89 (12 yrs) 96 (17 yrs) 8 6 Global gas reserves 4 Gazprom 17 % 2 Gazprom Supermajor Combined Major Emerging Markets Combined X total proved reserves of hydrocarbons (bboe) (X) - Reserve life in years based on 213 total proved reserves and 213 production of hydrocarbons SOURCES: BLOOMBERG, COMPANY S DATA 2

21 SUMMARY GAS RESERVES INFORMATION Natural Gas, tcm (1) (2) АВС 1 С Gas Condensate, extracted, mm tons (1) (2) АВС 1 С 2 1, Crude Oil, extracted, mm tons (1) (2) АВС 1 С 2 1, , Discovery of 1 new field and 8 new deposits within previously discovered fields Gas reserves replacement ratio 183 % ,2 279,6 299,6 tcm 269,6 USD bn 241,4 23,3 23,1 28,6 16,8 33,1 33,6 35,1 35,1 35, ,1 28, 28,9 29,1 29,9 29,8 27,7 27,8 27,9 28,4 29,2 29,9 3,6 31,7 32,9 33,2 25,3 92, ,5 2,8 2,8 2,8 21,3 21,9 22,5 22,8 23,4 23, GAZPROM GROUP GAS RESERVES (ABC1) AUDITED АВС1 RESERVES PROVED + PROBABLE RESERVES (PRMS) PRESENT VALUE (INCL. LIQUID HYDROCARBONS, SULFUR AND HELIUM) 1 ABC 1 reserves - explored reserves according to Russian standards of classification. Explored gas reserves (categories ABC 1 ) are considered fully recoverable. For oil and gas condensate reserves a special index of extraction is used. This index is calculated taking into account geological and technical factors. 2 C 2 reserves belong to the estimated category and serve as a basis for setting up exploration work at a specific field. 21

22 PRODUCTION STRATEGY Gazprom main production regions Yamal Nadym- Pur-Taz Krasnoyarsk gas production center Irkutsk gas production center Yakutsk gas production center Sakhalin gas production center Gazprom production bcm 183% % % F 215F YAMAL (BOVANENKOVSKOYE) ZAPOLYARNOYE FIELD MEDVEZHYE FIELD YAMBURGSKOYE FIELD URENGOYSKOYE FIELD - CENOMANIAN OTHER FIELDS OF NADYM-PUR-TAZ REGION OTHER REGIONS GAS RESERVE REPLACEMENT RATIO (RIGHT AXIS) 22

23 YAMAL MEGAPROJECT Bovanenkovskoye field (production forecast) bcm 4 Rusanovskoye KARA SEA 2 Leningradskoye Malyginskoye Taslyskoye Severo-Tambeyskoye Syadorskoye Zapadno-Tambeyskoye Kharasaveyskoye Yuzhno-Tambeyskoye Verhne- Kruzenshternovskoye Tiuteyskoye Zapadno- Vostochno- Seykhinskoye Bovanenkovskoye Bovanenkovskoye Nerstinskoye Neytinskoye Baidarata Bay Operating gas pipelines Projected gas pipelines and gas pipelines under construction Continental fields Shell fields GYDAN BAY Arcticheskoye Teta-Yakinskoye YAMAL PENINSULA Sredneyamalskoye Tchugoriakhinskoye Semakovskoye Antipayutinskoye Severo- Nurminskoye Kamenomysskoye Khambateyskoye TAZ BAY Parusovoye Kamennomysskoye Novoportovskoye more Obskoye Comprehensive YAMBURG gas processing OB BAY unit Severo-Urengoyskoye Wells, well TAZOVSKIY clusters Plan 215F Bovanenkovskoye industrial zone С1+С2 Reserves 8.5 tcm of gas 23.3 mn t of condensate Peak annual production 217 bcm of gas 4 mn t of stable condensate Tambeyskoye industrial zone С1+С2 Reserves 3.9 tcm of gas 178. mn t of condensate Peak annual production 65 bcm of gas 2.8 mn t of stable condensate Combined CAPEX for Yamal Program development 215 F 216 F Yuzhnaya industrial zone С1+С2 Reserves 1.4 tcm of gas 6. mn t of condensate RR bn RR bn Peak annual production 3 bcm of gas.8 mn t of condensate 23

24 EASTERN GAS PROGRAM Kirinskoye field (production forecast) bcm/year 1,5 NORTH OF THE TYUMEN REGION Udachniy Yakutsk Mirniy KRASNOYARSK Oha Surgut CENTER YAKUTSK Komsomolskna-Amyre Tyumen CENTER Tinda Tomsk CS Bogandinskaya IRKUTSK Boguchani Skovorodino Khabarovsk Chelabinsk Proskokovo Krasnoyarsk CENTER Kansk Omsk Chita Taishet Blagoveshensk Novoisbirsk Kemerovo Achinsk Barnaul Abakan Balagansk Sayansk Irkutsk Daqing Biysk Novokyznetsk Ulan-Ude Zabaykalsk KAZAKHSTAN Gorno-Altaisk ULAN-BATOR MONGOLIA Gas production center Operating LNG plants LNG plants under construction in Vladivostok Projected gas processing plants CHINA Pipelines under construction Lanzhou Xian Operating gas pipeline BEIJING Shenyang NORTH KOREA SOUTH PYONGYANG KOREA Xinyang Shanghai Sovgava n KAMCHATS KCENTER Petropavlovs k- Kamchatsky SAKHALIN CENTER Uzhno-Sakhalinsk Busan Kitakyusyu TOKYO JAPAN Osaka Plan 215F Sakhalin gas production center С1+С2 Reserves 799 bcm of gas mn t of condensate Peak annual production 21.5 bcm of gas 5.5 mn t of stable condensate Yakutsk gas production center - Chayandinskoye field С1+С2 Reserves 1.4 tcm of gas 22.1 mn t of condensate Peak annual production 25 bcm of gas.4 mn t of stable condensate Irkutsk gas production center - Kovyktinskoye field С1+С2 Reserves 2.5 tcm of gas 85.7 mn t of condensate Peak annual production 35.3 bcm of gas 1.9 mn t of stable condensate Combined CAPEX for Eastern Program development 215F 216 F Krasnoyarsk gas production center - Sobinskoye field С1+С2 Reserves bcm of gas 8.3 mn t of condensate RR 57.4 bn RR bn Peak annual production n/a n/a 24

25 GAS CONDENSATE PREMIUM PRODUCT Gas condensate production capacity mn tonnes Yamburg Novy Urengoy Astrakhan 3.7 Orenburg.1 Tomsk.3 Yuzhno-Sakhalinsk.2 Gas condensate production mn tonnes Plan 216F 217F Calculations may diverge due to rounding 1 Management estimates; excluding associate companies production 25

26 EXPORT ALEXANDER MEDVEDEV DEPUTY CHAIRMAN OF GAZPROM MANAGEMENT COMMITTEE 26

27 EUROPEAN NATURAL GAS MARKET DYNAMICS Balance of European Gas Consumption, bcm E INDIGENOUS PRODUCTION IMPORTS (+BALANCE OF STORAGE) CONSUMPTION Gazprom s Share is Stable 25.4% 1 GCV = 885 KCAL PER MCM, T = 2 C 3.% % 214E Demand for Gas Dropped Due to MILD WEATHER COMPETITION FROM RENEWABLES AND COAL SOURCES: IEA, EUROSTAT, GAZPROM EXPORT ESTIMATES Weather index (HDD + CDD) for Q1-Q3 214 in Europe is 13% lower vs. average Power generation makes 2% in the European gas mix. In Q1-Q3 214 it decreased by 14% 27

28 E RELIABLE GAS DELIVERIES TO EUROPE Near 5 years of impeccable operating track record 1 18 bcm Despite any crisis Gazprom has always fulfilled its export obligations and will do so in the future 1 Total gas sales in foreign markets excluding FSU 28

29 GAZPROM SALES TO EUROPEAN AND CIS MARKET Gazprom Gas Deliveries to Europe bcm 14.6 $296 per mcm $ $ $ $ $ E Supply of the biggest gas exporters to Europe 1 16 bcm Gazprom Gas Deliveries to CIS and Baltics bcm 54.6 $25 per mcm 68. $ $ $ $274 $ E Supply of the EU biggest gas producers 12 bcm Q-3Q 213 1Q-3Q Q-3Q 213 1Q-3Q GAZPROM JSC ALGERIA (INCL. LNG) LYBIA (INCL. LNG) QATAR NIGERIA NORWAY UNITED KINGDOM NETHERLANDS 1 European countries with Turkey (excluding CIS and Baltics) 29

30 MID-TERM PROVISIONS 12% 1% 98% 96% 94% Short-term forecasts of European gas consumption by leading consulting companies (28 consumption = 1%) 1% Actual forecasts of the leading consulting companies are significantly below previous estimates because they take into account the sharp drop in demand for gas in 1-3 quarters of % 9% 88% 86% 84% 82% Actual demand 26-14E CERA (213-Nov) CERA (214-Jun) PIRA (213-Oct) PIRA (214-Oct) CEDIGAZ - pessimistic (213-Jun) CEDIGAZ - base (213-Jun) Under current market conditions, Gazprom export s estimates for gas deliveries to Europe are bcm/year depending on weather 8% 78% IEA (213-May) 79.8 IEA (214-May)

31 Jan-3 Sep-3 May-4 Jan-5 Sep-5 May-6 Jan-7 Sep-7 May-8 Jan-9 Sep-9 May-1 Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-98 Jan-99 Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 HYBRID PRICING CORNERSTONE OF THE EUROPEAN MARKET Natural Gas Prices in Europe Move in Common Trend $/Mcm Gazprom is a Major Provider of Supply Flexibility to Europe Mcm/Day Seasonal swing in Russian gas daily deliveries doubled from 1998 to NBP Day-Ahead TTF Day-Ahead BAFA Roughly 2/3 of European gas import is still oil-indexed Oil price is still the main determinant of wholesale gas prices in Europe In , correlation between TTF and 6-month moving average of oil price was equal to.8 31

32 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 OBJECTIVE OF DECOUPLING OIL AND GAS PRICES NOT ACHIEVABLE IN A FORESEEABLE FUTURE Oil-indexed Prices Still Dominant in European Gas Imports 1 Forward Prices Put Henry Hub-based Cost-Plus Pricing in Europe Under Question 2 2,7% 2,4% 3,5% 36 $/Mcm 3.1% ,5% 42,1% ,4% 3,5% 1,8% 9,3% 1,8% 69.9% Gazprom oil- and quasi-oil-indexed Algeria oil-indexed Norway 1/3 oil-indexed Libya oil-indexed 22 Henry Hub-Based Cost-Plus Prices Range Qatar oil-indexed Norway 2/3 hub-indexed other LNG oil-indexed Qatar hub-indexed 2 NBP Forward Curve Gazprom hub-indexed other LNG hub-indexed 1 In 1-3Q 214; for purposes of this comparison Europe is regarded without Norway 2 The price includes transportation from Henry Hub to Lake Charles, LA, liquefaction, transport, and regasification in the U.K. or Belgium SOURCE: PIRA 32

33 GAS DEMAND WILL EVENTUALLY RETURN TO EUROPE Bright Spots: New Applications for Gas in Europe Natural Gas in Power Generation Rebound In 235: + 3 bcm + 5 bcm + 6 bcm 27 bcm 139 bcm 234 bcm E 235F SOURCES: IHS, GAZPROM EXPORT ESTIMATES Small-scale CHP Bunkering Road transport By 235, bright spots could add 14 bcm to total demand or 25% above current levels Due to: aging coal and nuclear plants retirement; obligatory CCS for new-built coal power stations (UK); adjustment of the carbon emission allowances market. Small-scale CHP offers low-cost energy and tax benefits. Environmental restrictions provide incentive for broader use of LNG in bunkering and road transport. 33

34 ENTERING NEW GAS MARKETS Gazprom in Asia-Pacific Gazprom is set to build a diversified gas sales portfolio in Asia comprising both pipeline gas and LNG: In 214 we finalized a long term SPA with CNPC for supplying 38 bcma of natural gas to China via Eastern Route pipeline. The deal will allow Gazprom to expand its gas transportation facilities in Eastern Russia and diversify pipeline exports. A broad geography of LNG deliveries to Asia is set to expand with the launch of new LNG projects, making Gazprom one of the most active players in the Asian market. WESTERN ROUTE PROJECT November, 214 Framework Agreement Signed Further negotiations and firm agreements EASTERN ROUTE PROJECT May, 214 SPA signed September, 214 Start of construction works Not earlier than 218 Estimated commissioning date Pipeline gas exports to China are planned to reach 68 bcm/year in 22+ Gazprom LNG Supply Source Structure % 18% 14% 46% Atlantic Europe Asia- Pacific 36% 85% LNG deliveries by Gazprom Group Pipeline gas deliveries by Gazprom LNG from Gazprom projects LNG Under Term Contracts Spot Trading Gazprom will supply >3 mmt/year of LNG in 222+ globally 34

35 GAZPROM LNG BUSINESS Existing supply sources New Gazprom LNG Projects Third-party supply sources Sakhalin-2 1 mmt/year Vladivostok LNG 1 mmt/year Baltic LNG 1 mmt/year Sakhalin-2 T3 5 mmt/year Colombia FLNG.5 mmt/year Yamal LNG 16.5 mmt/year Gazprom Offtake 1 mmt/year Total Output 25 mmt/year Gazprom Offtake.5 mmt/year Gazprom Offtake 2.9 mmt/year Global Contracted LNG Volumes vs. Demand Gazprom LNG Portfolio Development mmt Projected LNG Demand mmt Third party term volumes Sakhalin-2 T3 Baltic LNG Vladivostok LNG Yamal LNG Colombia FLNG Sakhalin-2 SOURCE: WOOD MACKENZIE 1 These volumes do not include spot trade 214 Highlights up to 2.9 mmt/year LNG contracted under LT HOA with Yamal LNG project.5 mmt/year LNG contracted under MT SPA with Colombia LNG project 2 LNG Carriers Newbuilds Velikiy Novgorod and Pskov were delivered to Gazprom LT GAIL SPA Went live (CP lifted) 52 Cargoes were delivered by GM&T to Asia-Pacific and Atlantic markets 35

36 GAZPROM ACTIVITIES IN THE GLOBAL NGV MARKET Bunkering LNG consumption as bunker fuel in Baltic and Northern seas in ,5 4, 3,5 3, 2,5 2, 1,5 1,,5, mt SOURCE: SSPA SWEDEN AB Pilot project: port of Rostock (more than 13 mln tons of cargo and more than 2 mln passengers per year) Project task: Creating a distribution center in the port of Rostock for LNG supply to marine/land transport and to remote industrial customers Participants: On-road transport Gazprom Group companies G4T assets GERMANY CZECH REPUBLIC POLAND SLOVAKIA VIETNAM Gazprom Group companies gas sales for on-road transport mcm/year Gazprom Germania GmbH (1% owned by Gazprom export): 23 stations Gazprom Germania GmbH: 6 stations + 3 in the process of construction Vemex (more than 5% owned by Gazprom Germania GmbH): 5 own stations + supplying 8 third party stations Gazprom Germania GmbH: 1 LNG station +1 in the process of construction Cryogas (1% owned by Gazprombank): EPCcontractor in SSLNG segment Vemex: gas supply to 1 third party station JV between Gazprom and Petrovietnam: development of NGV-infrastructure and gas supply to gas-filling stations * Poland Czech Republic/Slovakia Germany * Forecast 36