Gas Interconnector Greece-Bulgaria (IGB Project) an alternative supply route to South East Europe by 2014

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1 1 Gas Interconnector Greece-Bulgaria (IGB Project) an alternative supply route to South East Europe by 2014 Jordan Georgiev Deputy-Chairman ICGB AD Athens, 28 March, 2012

2 Bulgaria develops key regional gas interconnectors in order to open the Southern gas corridor in the coming years IBS IBR IGB ITB Main national goal is to secure competitively priced gas from

2 2 Bulgaria develops key regional gas interconnectors in order to open the Southern gas corridor in the coming years IBS IBR IGB ITB Main national goal is to secure competitively priced gas from alternative suppliers Bulgaria and SEE will have connected to an alternative supply route already in 2014 at a relatively limited cost Completion of interconnector projects will impact regional security of supply and import price competitiveness SEE shall be in a position to source pipe gas from the Caspian region, Middle East via Turkey & Greece, and LNG through existing or new import terminals available in the region Intercon GR-BG (2014): Intercon BG-RO (2013): Intercon TR-BG (2014): Intercon BG-SR (2015): EIA, Technical Design, Permits Technical Design, Permits FS phase FS phase

3 IGB planned as pipeline into SEE for natural gas sourced from Southern Corridor and LNG producers to be available in 2014 Comments IBS IGB IBR Proposed LNG LNG LNG.

3 3 IGB planned as pipeline into SEE for natural gas sourced from Southern Corridor and LNG producers to be available in 2014 Comments IBS IGB IBR Proposed LNG LNG LNG. LNG SEE will be connected with existing supply corridor from Caspian Region and Middle East through Turkey and Greece Supply route for gas from LNG producers, imported through existing/new re-gas terminals in Greece and/or Turkey IGB not interrelated with large production base - scalable capacity for incremental supply to SEE in combination with Interconnectors under development IBR (BG-RO), IBS (BG- SER) Key facts and figures Length 180km (150km in BG, 30km in Greece) Route Komotini (GR) Haskovo (BG) - Stara Zagora (BG) Capacity up to 3 bcm/y (option for capacity increase to 5 bcm/y) Capital costs ~200 m EUR (as per initial estimate under FEED) First gas 2014

4 4 Asset Company ICGB AD is advancing with the Project permitting process allowing for entry in investment phase by end of Pre-investment and FS Studies in the Greek and Bulgarian section completed Project approved for EU financing under EEPR IGB Project Agreements negotiated and signed BEH EAD, DEPA S.A & Edison SpA complete IGB Project implementation plan Establishment of ICGB AD JV to finance and implement the Project Initial EIA authority consultations in Bulgaria completed EIA & FEED implementation launched PEIA study in Greece completed 50% of EIA study in Bulgaria completed Line pipe suppliers pre-qualified EIA Decisions in Bulgaria and Greece by end of Q Final Route Design approvals in the two countries by Q End of 2012 ICGB Decision to launch investment phase (final investment decision) End of 2012 award of line pipe, other LLI contracts Award of EPC Contract in early 2013 End of detailed design and start of construction within H Construction planned to last for approx. 1 year In service targeted by H1 2014

5 5 Interface Cooperation Agreements signed with neighboring transmission operators DESFA S.A. and Bulgartransgaz EAD ICGB AD has entered into cooperation agreements with the Greek and Bulgarian TSOs to arrange connecting the future IGB pipeline with the two neighboring systems ICGB AD Existing and future technical capacity at the IGB inlet and outlet points reflected in FEED Study, incl. maximum volume of gas capable to reach IGB inlet and be transported into and out of the Bulgarian system Bulgartransgaz EAD, a company within BEH Group, is implementing IBR and IBS projects & updates on their progress to ensure coordination of overall transit route development along with IGB Before commissioning of IGB, the Bulgarian National Gas Transmission System will remain under-utilised to the level of ~ 5 bcm/y of free capacity

6 Conclusion: IGB Project - earliest, less cost intensive pipeline to open an alternative gas supply route to Bulgaria and SEE region IGB remains a national and EU priority Co-financing designated

6 6 Conclusion: IGB Project - earliest, less cost intensive pipeline to open an alternative gas supply route to Bulgaria and SEE region IGB remains a national and EU priority Co-financing designated under European Energy Programme for Recovery Has the status of a project of National Importance under Bulgarian Council of Ministry Decision 615/ & Greek Law 4001/2011 IGB has clear regional impact and remains the only infrastructure in design phase capable to diversify gas imports of SEE in short to mid-term perspective IGB capacity scaled to supply gas without a large production source Project is capable to tackle regional lack of suppliers diversification in a mid-term perspective Technical capacity is scaled to regional market needs and already available non off-taken gas, e.g. free Caspian volumes Shareholders shall target a transmission cost reflecting need for competitively priced gas supply to Bulgaria & SEE Shareholders do not link investment decision with particular production base No sufficiently developed midterm option for alternative supply to SEE apart from IGB Currently the SEE region cannot rely on short implementation supply projects in their design engineering & permitting phase apart from IGB IGB`s implementation plan is reflecting the lack of viable alternative supply routes to SEE in the next 5-7 years Pipeline shall provide a supply route under EU legal regime, less technically complex, structured to be accessible from multiple supply sources

The Aegean LNG and the IGB Pipeline

The EU-BALKAN SUMMIT PAVING THE WAY TO RECOVERY AND GROWTH Sofia, 17 & 18 October 2013 The Aegean LNG and the IGB Pipeline Two highly important projects for the Balkans energy security and gas market integration