Fluxys | Ghent - 27 April 2016 PRODUCTION of NATURAL GAS: ABUNDANT & GEOGRAPHICALLY WELL-SPREAD RESOURCE BASE

OUTLOOK FOR THE LNG MARKET Rudy Van Beurden | Fluxys | Ghent - 27 April 2016 PRODUCTION OF NATURAL GAS: ABUNDANT & GEOGRAPHICALLY WELL-SPREAD RESOURCE BASE

Shale Other CIS 16,223 countries Russia 49,541 North America 15,767 Shale Europe 17,627 11,545 4,666 Iran 34,020

Africa Qatar

14,386 Saudi 24,681 Arabia + UAE Asia - Oceania Latin America 14,407 7,618 16,966

Source: Cedigaz Natural Gas In The World 2014 Edition - EIA – World Shale Resource Assessment (September 2015) Figures: billion cubic metres (bcm)

2 2016 05 27 DEMAND OUTLOOK FOR NATURAL GAS ACROSS THE REGIONS: EUROPE GOES FLAT

North America Europe Asia 1500 700 1500 650 1300 1300 600 1100 550 1100 900 500 900 450 700 700 400 500 350 500 300 300 300

Forecast 2011 Forecast 2015 Forecast 2011 Forecast 2015 Forecast 2011 Forecast 2015

Source: IEA World Energy Outlook 2011 - 2015

3 2016 05 27 DESPITE FLAT DEMAND OUTLOOK: SUPPLY GAP WIDENS

AS INDIGENOUS PRODUCTION DECLINES

/y 500

bcm 450 400 350 300 250 200 150 100 50 0

Fluxys: partner in c. 45-55 bcm/y Import requirements European production incl. Norway additional supply capacity into Europe Demand

Source: Entsog TYNDP 2015

4 2016 05 27 NATURAL GAS IMPORTS IN EUROPE

EU : imports (Norway incl.) cover 76% of consumption (2014) Norway Others Nigeria 8,3% Qatar 1,4% 7,3% Russia

Russia Algeria 39,4% 9,8%

Norway 33,8%

Africa Middle East

Natural Gas by pipelines 90% LNG 10% Source: BP Statistical Review of World Energy June 2015, Cedigaz Natural Gas In The World 2014 Edition

5 2016 05 27 WHERE WILL TOMORROW’S GAS COME FROM?

Norway

Russia

LNG worldwide Southern Corridor: Caspian, Middle East, East Med

Africa

6 2016 05 27 FROM SOURCE TO END USER MARKET: PIPELINES AND LNG CHAIN (LIQUEFIED NATURAL GAS)

• Cool down to -162°C Liquefaction • Volume 1/600

Storage • Warm up to +3°C • Volume x 600

Transmission

Regasification

Gas fields

Storage Transmission

7 2016 05 27 LNG = Liquefied Natural Gas

• Liquefied by cooling the natural gas to a temperature of -162° C at atmospheric pressure.

• 600 less volume than natural gas  compact fuel, competitive with diesel  extremely clean, low-carbon fuel

8 2016 05 27 MAJOR LNG FLOWS IN THE WORLD

9 2016 05 27 LNG IS AVAILABLE: 240  360 MILLION TON/Y IN 2020

MTPA United States Australia 500 +50% increase in LNG supply by 2020 Qatar Malaysia 450 Nigeria 400 Indonesia Trinidad 350 USA Algeria Russia 300 Oman Australia Yemen 250 Brunei United Arab Emirates 200 Qatar Peru 150 Equatorial Guinea Norway 100 Papua New Guinea Angola 50 Libya Egypt 0 2000 2005 2010 2015 2020 2025 2030

[IHS – exports operational terminals & terminals under construction]

10 2016 05 27 CRUDE OIL VS. NATURAL GAS PRICE

$ /MMBTU (*) Brent Oil Japan Belgium US Natural Gas price 25

20 Crude oil at $100/barrel = 17.3 $/MMBTU = ------

Fukushima - Japan

Shale gas - USA 0

5/01/2009 5/01/2010 5/01/2011 5/01/2012 5/01/2013 5/01/2014 5/01/2015 5/01/2016

2010

2012 2013

2011

2009

2015 2014

(*) 5 $/MMBTU ≈ 15 EUR/MWh

11 2016 05 27 LNG REGAS CAPACITY IN EUROPE BUT UTILISATION RATE AS LOW AS 20% Muuga Existing LNG terminals Paldiski Sillamäe

Under construction Lysekil Nynäshamn

Planned or announced Göteborg Riga bcm/y 230 Klaipéda Hamburg 220 Wilhelmshaven (outstanding) Świnoujście Shannon 2015 210 LNG Isle of Grain Rotterdam Dragon LNG South Hook 200 Zeebrugge Dunkirk 2015 190

180 Montoir Porto Levante Fos Northern Adriatic 170 El Musel Fos-sur-mer Cavaou Panigaglia 2017-2021 Krk Bilbao Falconara 160 Mugardos Fos Tonkin OLT LNG Toscana Alexandroupolis Kavala

Ereglisi

150 Barcelona

Taranto

2012 2019 2011 2013 2014 2015 2016 2017 2018 2020 2021 2010 Sagunto Sines Gioia Tauro Revithoussa Izmir Operational Cartagena Porto Under construction Huelva Empedocle Vasiliko Source: GIE 2014 – GIIGNL 2014

12 2016 05 27 LNG IMPORTS IN EUROPE EXPECTED TO DOUBLE BY 2020

MTPA

150

100

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net LNG imports LNG regas capacity [GLE – GIIGNL – Cedigaz – market expectation IEA]

13 2016 05 27 ZEEBRUGGE LNG TERMINAL SINCE 1987

• 1,500+ LNG carriers received • Unloading and loading of LNG vessels (7 500 m³ to 266 000 m³ LNG) • 80 million tonnes LNG unloaded • Storage capacity : 380 000 m³ LNG in 4 tanks = 108 bcm of natural gas • Regas and send-out in the transport grid 1 700 000 m³(n)/h

14 2016 05 27 DEVELOPING THE ZEEBRUGGE TERMINAL AS A KEY LNG HUB 2008

• Optimum take away capacity: security of supply instrument for NW Europe • Developing the terminal as a versatile tool for our clients

Optimum LNG reception flexibility Optimum destination flexibility

Reload LNG: Pipe gas ships and tanker throughout trucks NW Europe

15 2016 05 27 NEW LT-CONTRACT: TRANSSHIPMENTS FOR YAMAL LNG

• Port of Sabetta, Yamal Peninsula: Yamal LNG to produce 16.5 mt/y of LNG SABETTA Summer route • Yamal Trade - Fluxys LNG: Winter route 20y capacity agreement for up to 8 mt/y LNG transshipment services at LNG terminal in ZEEBRUGGE Zeebrugge.

LNG Market

South America

16 2016 05 27 TRANSSHIPMENT CONTRACT: INVESTMENT IN 5TH STORAGE TANK AND PROCESS INSTALLATIONS

Additional process installations

5th storage tank

17 2016 05 27 SMALL-SCALE LNG = LNG AS A FUEL FOR INDUSTRY, SHIPS AND TRUCKS: BETTER FOR CLIMATE & HEALTH

HEAVY FUEL OIL MARINE GAS OIL 3.5% Sulphur 0.1% Sulphur

LNG Envisat, ESA • 0% Sulphur • Particulate matter: negligible • Up to 90% less NOx Attack the invisible killer: premature deaths from air pollution estimated at • Up to 25% less CO2 [European Commission SWD 2013 4] 420,000 for the year 2010 (EC)

18 2016 05 27 WORLD-WIDE REGULATION FAVOURS LNG

Max % sulphur in ship fuel 5,0 Global norm

4,0 SECA norm

3,0

2,0

1,0

- 2008 2010 2012 2014 2016 2018 2020 2022 2024

Alternative Fuels Directive Sulphur Emission Control Area adopted by the EU Parliament (2014)  CNG refuelling infrastructure Existing SECA area every 150 km by 2020  LNG refuelling infrastructure for Potential future SECA area trucks every 400 km and for ships in 106 TEN-T ports by 2025

19 2016 05 27 LNG AS A FUEL FOR SHIPS IN 2015: 0.2 MTPA

75 LNG fuelled ships in operation

(87% in Europe) + 84 on order

ships

Number

Sea-going ships propelled by LNG (excluding LNG carriers)

[DNV-GL 1/2016]

20 2016 05 27 LNG AS A FUEL FOR TRUCKS IN 2015: 0.02 MTPA (EST.) Finland 1 truck

Sweden Russia 69 trucks 1 truck

Netherlands 387 trucks UK Poland 1509 LNG fuelled trucks + 621 trucks 46 buses 46 buses in operation Belgium 11 trucks 33 trucks

Switzerland 1 truck France 10 trucks Italy 56 trucks Portugal Spain Turkey 11 trucks 306 trucks 2 trucks

[NGVA Europe Jan 2015]

21 2016 05 27 A NICHE MARKET TODAY, BUT WE ARE FISHING IN A SEA WITH LARGE POTENTIAL

430 mtpa market Heavy Fuel Oil 53 mtpa LPG Small-scale LNG: 1.7 mtpa 27 mtpa Diesel ≈ gasoil Ships 270 mtpa Industry Gasoline 80 mtpa Trucks, vans, cars 200 mtpa Cars Ships 7 mtpa Petrochemical Heating oil 63 mtpa Chem feed - naphta Air- 49 mtpa • Industry: 1.5 mtpa planes other • Ships: 0.2 mtpa 50 mtpa • Trucks: 0.02 mtpa Refinery losses Jet-kerosene 29 mtpa 54 mtpa

[Fuels Europe.eu]

22 2016 05 27 DOWNSTREAM SMALL SCALE LNG SUPPLY FROM ZEEBRUGGE: A CLOSER LOOK

Loading of bunker barges Bunker vessel and feeder ships up to 7 000 m³ LNG

Fluxys LNG terminal 360 000 m³ LNG Bunker vessel End user Feeder ship Intermediate storage 15 000 m³ LNG up to 7 000 m³ LNG 1 to 100 000 m³ LNG/y

Loading of LNG trailers

LNG trailer 45 m³ LNG

Cutting through the chicken-and-egg 30 m³ LNG/y situation: Fluxys to invest with partners in downstream LNG chain Fuel for industry 1 to 15 000 m³ LNG/y

23 2016 05 27 Loading of bunker barges Bunker vessel and feeder ships up to 7 000 m³ LNG

Fluxys LNG terminal 360 000 m³ LNG Bunker vessel End user Feeder ship Intermediate storage 15 000 m³ LNG up to 7 000 m³ LNG 1 to 100 000 m³ LNG/y

Loading of LNG trailers

LNG trailer 45 m³ LNG

30 m³ LNG/y

Fuel for industry 1 to 15 000 m³ LNG/y

24 2016 05 27 LNG AS A FUEL FOR INDUSTRY, SHIPS AND TRUCKS

Loading of LNG trailers Fluxys 10% LNG terminal

LNG trailer 50% 40% Small ships propelled on LNG

Truck refuelling station - e.g. Fluxys in Veurne

Fuel for industry

2016 05 27 25 LNG TRUCK LOADING 2010 2011 2012 2013 2014 2015 … . 19 active truck loading companies . Capacity of 4 000 loadings/year . 24/7, online day-ahead scheduling > Industrial sites without pipe gas >50% > LNG refuelling stations <40% > LNG as fuel for shipping <10% . Destinations: Belgium, UK, France, Germany, the Netherlands, Poland, Switzerland, Sweden, Norway, Italy

4000 LNG Trucks Loaded in Zeebrugge + FR + NL 3000 2000 1000 0 2010 2011 2012 2013 2014 2015

26 2016 05 27 FIRST LNG REFUELLING STATION OWNED AND BUILT BY FLUXYS IN BELGIUM

PARTNERSHIP WITH HAULAGE COMPANY MATTHEEUWS

27 2016 05 27 Loading of bunker barges Bunker vessel and feeder ships up to 7 000 m³ LNG

Fluxys LNG terminal 360 000 m³ LNG Bunker vessel End user Feeder ship Intermediate storage 15 000 m³ LNG up to 7 000 m³ LNG 1 to 100 000 m³ LNG/y

Loading of LNG trailers

LNG trailer 45 m³ LNG

30 m³ LNG/y

Fuel for industry 1 to 15 000 m³ LNG/y

28 2016 05 27 2ND JETTY ABLE TO LOAD SMALL LNG BUNKER BARGES IN ZEEBRUGGE

Second jetty under construction • Reception of LNG carriers with capacity as small as 2 000 m³ LNG • Unloading and loading two ships simultaneously • Ship-jetty-ship transfers

29 2016 05 27 LNG BUNKERING VESSEL WITH HOME PORT ZEEBRUGGE

Engie, NYK, Mitsubishi and Fluxys are building a new LNG bunkering vessel: • 5 100 m³ LNG • Commissioning 2016 • Bunkers for UECC United European Car Carriers  2 dual-fuelled ships in SECA

30 2016 05 27 Loading of bunker barges Bunker vessel and feeder ships up to 7 000 m³ LNG

Fluxys LNG terminal 560 000 m³ LNG Bunker vessel End user Feeder ship Intermediate storage 15 000 m³ LNG up to 7 000 m³ LNG 1 to 100 000 m³ LNG/y

Loading of LNG trailers

LNG trailer 45 m³ LNG

30 m³ LNG/y

Fuel for industry 1 to 15 000 m³ LNG/y

31 2016 05 27 LOADING OF FEEDER SHIPS: 15 600 M³ LNG

11/2014: agreement signed between Eni and Skangas to load 2 small scale LNG ships per month in 2015 and 2016

32 2016 05 27 Loading of bunker barges Bunker vessel and feeder ships up to 7 000 m³ LNG

Fluxys LNG terminal 560 000 m³ LNG Bunker vessel End user Feeder ship Intermediate storage 15 000 m³ LNG up to 7 000 m³ LNG 1 to 100 000 m³ LNG/y

Loading of LNG trailers

LNG trailer 45 m³ LNG

30 m³ LNG/y

Fuel for industry 1 to 15 000 m³ LNG/y

33 2016 05 27 STRONG POTENTIAL FOR ENLARGING REGIONAL SCOPE

SWEDEGAS

• Germany: Fluxys member of Maritime LNG platform • Widening of scope already started towards Sweden

34 2016 05 27 34 Shippers Meeting 3&4 March 2016 - for information purposes only SMALL SCALE LNG TERMINALS UNDER DEVELOPMENT BY SWEDEGAS IN SWEDEN

• Significant LNG bunkering market in the Gothenburg port • Main industrial end users via truck and/or rail • Small regional grids by truck and/or rail • Truck fuelling for heavy road transport • Part of the Swedish pipe gas market

35 2016 05 27 WRAP UP

• Large-scale LNG: supply to entire markets − Compared to pipe gas: advantage of flexibility and source diversification − Huge amounts of additional liquefaction capacity coming on stream − Europe expected to double LNG imports by 2020 • Small-scale LNG: LNG as a fuel for industry, ships and trucks − Strong demand to reduce emissions as well as costs − Challenge: developing downstream LNG infrastructure • Fluxys: first mover in both large & small-scale LNG

36 2016 05 27 37 2016 05 27