Presentation by Ian Marlee, Ian Marlee, partner, Trading Arrangements at the CBI Energy Conference, London, October 2009.

1. Long Term Contracts Project Discovery and Potential Future Gas Needs CBI Energy Conference – 22 October 2009 Ian Marlee, Partner, Trading Arrangements

2. Project Discovery Can GB markets deliver secure and sustainable energy supplies? TESTS SEVERE AND COMPLEX Wind intermittency Gas import dependency The low carbon challenge New Government intervention Accelerated plant closures The financial crisis SECURITY OF SUPPLY

4. Ofgem’s global scenarios FOUR SCENARIOS REFLECTING KEY GLOBAL DRIVERS Economic recovery Rapid Slow Environmental action Rapid Green Transition Green Stimulus Slow Dash for Energy Slow Growth

6. GB Energy Demand WIDE RANGE FOR GAS DEMAND

7. GB Import Dependence IMPORT DEPENDENCE INCREASES IN ALL SCENARIOS, BUT BY VARYING DEGREES

8. Sources of Gas Supply to EU Green Transition Green Stimulus Dash for Energy Slow Growth WIDE RANGE OF POTENTIAL GAS DEMAND AND SUPPLY SOURCES LNG Pipeline gas from North Africa Pipeline gas from Central Asia Pipeline from Russia Indigenous

9. GB Winter Supplies in a 1-in-20 Winter Green Transition Green Stimulus Dash for Energy Slow Growth INTERCONNECTOR AND/OR LNG FLOWS WOULD NEED TO BE HIGHER THAN MODELLED TO MEET DEMAND IN TWO SCENARIOS UKCS Norway LNG Interconnectors (net) Storage Demand LNG terminal utilisation Interconnector utilisation Storage utilisation

10. THE “REDS” CURRENTLY OUTWEIGH “GREENS” STRESS TESTS - TRAFFIC LIGHTS Stress test Period Today Green Transition Green Stimulus Dash for Energy Slow Growth Re-direction of LNG supplies 1-in-20 severe winter Russia-Ukraine dispute 1-in-20 severe winter Bacton outage 1-in-20 peak day No wind output 1-in-20 peak day Electricity interconnectors fully exporting 1-in-20 peak day Moderate impact Low impact High impact