Thomas Kleefuß (NET4GAS CEO): NET4GAS Asset Strategy, European Economic Congress 2011Katowice, May 17th 2011

1. NET4GAS Asset Strategy
Thomas Kleefuß, CEO
European Economic Congress 2011
Katowice, May 17th 2011

2. With Nordstream, OPAL and Gazelle Gazprom will be
able to bypass Ukraine as the major transit country
 Major Russian gas flows will be shifted
from the Southern Russian onshore transit
route to Nord Stream / OPAL / NEL.
 The first branch of the offshore Russian
Nord Stream
transit highway will be used earliest in
2011. The second line will be completed
not before 2013.
 In order to benefit from the new/planned
infrastructure in Southern Europe (e.g.
LNG, Caspian gas) starting not before
2012, access to Baumgarten is essential.
Shift of gas flows
OPAL expected from 2011
Gazelle
Pipeline Project Gazelle is necessary
for extension of Nord Stream/OPAL and
GE contract (shift to entry point Hora
White Stream / GUEU
Svate Kateriny).
Project “Lanzhot – Baumgarten
Lanzhot - Baumgarten
connection” is necessary in order to
Tauern pipeline
capitalize on infrastructural
Nabucco / South Stream
developments in the South East of
Europe.
Current gas flows Future gas flows

3. The Moravian Loop will enhance the
national transport system and provide
transit opportunities with Poland
 The Moravian Loop project
Moravian Loop
will foster the
interconnection with Poland
LNG
Terminal
 3 business opportunities are
Swinoujscie envisaged:
 Gazsystem connection for
extending the supply zone
achieved with Stork I project
 Yamal connection for long
distance transports in Poland to
provide Caspian gas also to
remote Polish areas
Moravian  Moravian Loop will offer PGNIG
Loop
the possibilities to market LNG
gas outside of Poland into
direction of Baumgarten (fostering
of Baumgarten development due
to additional non-Russian gas)
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4. Connection to Oberkappel will support an
EU-North-South corridor and serve as a
backbone for a trading region CZ-A-SK-HU
Oberkappel connection  The business case for this
project is based on
expected regulatory
requirements. The project
ensures N4G’s first mover
position against WAG
extension.
2  N4G North-South-corridor
1 to Poland is already
reflected in the European
Oberkappel
connection Investment plans (#1).
(Moravia Project)
 N4G now tries to include
Eustream
Oberkappel connection in
Baumgarten
the regional and European
UGS Interconnection point Compressor station investment plans (#2)
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5. The shift of flows from Lanzhot to Brandov is
already reflected in the transit contracts
Transit contracts and upsides for N4G
 In 2011:
Brandov Sayda/Olbernhau All figures in mcm/day  The GE contract is running
150 E X E X
from Lanzhot to Waidhaus
60  Exit to Germany in HSK
100
40 Cesky Tesin plays a role, however
50 20 15 E X compared to the classic
0 0
East-West flow it is of minor
10 importance
2011
2020
2011
2020
2011
2020
2011
2020
5
 In 2020:
0  Gas from Brandov to
2011
2020
2011
2020
Major flow in 2020 Waidhaus is delivered
according to the GE
Waidhaus contract
E X
 Potential upside may be
150 provided by Nabucco on
Lanzhot
100 Lanzhot Entry and
150 E X Waidhaus and Cesky Tesin
50
Exit.
100
0
Major flow in 2011  The remaining border
2011
2020
2011
2020
50 points are of minor
0
importance
2011
2020
2011
2020
Contracts Nabuco Low case Nabucco High case
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6. Overview of Key Strategic Measures
 Connect OPAL in Q3 2011 with NET4GAS grid
 Completion Czech-Polish connection in Q3 2011
 Build and connect Gazelle till the end of 2012
 Connect Czech grid with Baumgarten either LBL or Nabucco
 Develop Moravian Loop as part of North South Corridor depending on
capacitiy demand beyond 2017 from Poland and local market (also
Nabucco volumes should be transported)
 Develop the Czech-Austrian (Oberkappel) connection around 2018 as
competitive answer towards WAG extension or E.ON Bohemia WAG
connection and as significant contribution to Target Regions (CR-AT-
SK-HU)
6

7. Trading Regions enable i.e. faster establishment
of functioning wholesale markets
 Trading Region AB = Cross-border
entry/exit system including all nominated
Trading Region model at a glance points on the transmission systems of
countries A and B
 End-user Zone = National balancing zone
for national final customers, no matter
Country A Country B the system (distribution or transmission)
they are connected to
Trading Region AB  Virtual point of the trading region serving
as the sole marketplace of the trading
VP region and all attached end-user zones.
Shifting of gas between trading region
and end-user zone is done by nominating
a virtual exit on the VP.
 A trading region allows shipper to
End-user End-user bundled their purchase portfolios but not
the supply portfolios of the countries
Zone A Zone B inside
 Storages and indigenous productions of
Final customers (A) Final customers (B) the countries inside the region are linked
to the VP
 The trading region model reduces the
E or X contract X contract
requirements of legal conditions between
participating countries for establishing of
cross-border markets as much as
NB: Trading regions can be developed also for more than two
, possible
countries and don’t hamper the establishment of full merged
markets later
-
7 Strategy Paper 2011

8. N4G enables a functioning market in
Central Europe by forming a trading region
with Austria, Slovakia and Hungary
Trading Region in Central Europe  One investment to Austria just
required (Vodňany <>
Oberkappel would be (probably)
necessary in order to establish a
Gaspool trading region (one wholesale
PL-Hub market) together with
A, SK, HUN and maybe SLO
 One common VP and gas
exchange
 Hub-to-Hub capacity products to
NCG all neighbouring markets and
(CEGH+) maybe beyond
 National distribution zones
ROM-Hub remain substantially unaffected
PSV  Expected benefits are (a) shift of
unused transit capacities to
required intra market
capacities, (b) reduction of pipe-
to-pipe competition and (c)
continuing eye-level TSO
cooperation/ avoiding RSO
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9. N4G follows clearly defined steps to build a
East-West transporter with sufficient
turntable between CEE and NWE markets
Gas turntable in Central Europe
reverse flow possibilites in place
Asset aspects
Interconnection with
Interconnection Austria connected with Austria: Oberkappel in
with Poland in 2011 adequate tariff in 2014 2018 (South)
(North)
Regulatory aspects
Bundled products in GATRAC is used as a Trading region A-SK-
place with all core for VP2VP CZ-HU established in
adjacent TSO in 2012 products in Europe 2018
2011-2013 2014-2017 2018-2020
As of today 2020
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