The Role of DEPA in the Greek Gas Market Development and in the Eastern Gas Transit to Europe

The role of DEPA in the Greek Gas Market development and in the Eastern gas transit to Europe

Dr Vassilios Tsombanopoulos General Director DEPA S.A. Strategic Planning & Subsidiaries Division

May 2004 PRESENT STRUCTURE OF DEPA

GREEK STATE HELLENIC PETROLEUM

65 % 35 %

DEPA

100 %

EDA ATTIKI EDA THESSALONIKI EDA THESSALIA 51 % 51 % 51 %

CINERGY (60%) GSC (EPA) GSC (EPA) GSC (EPA) ITALGAS SHELL (40%) ATTIKI THESSALONIKI THESSALIA 49 % 49 % 49 % 9 High pressure (70 barg) trunkline: 511 km, 36" and 30"

9 High pressure (70 barg) branches: 450 km, 10“ to 30"

9 MP network (19 barg): 350 km

9 LP network (4 barg): 1560 km

9 LNG terminal on Revithoussa islet: Two storage tanks, totally 130.000 m3 LNG. Send out capacity: 220.000 Nm3/h

9 3 Gas Supply Companies (GSC) in the areas of: Attiki, Thessalia, Thessaloniki GAS SALES IN GREECE IN 2003 (mil Nm3 / yr) (Total : 2.287 mil. Nm3)

159 14

302

143

1669

P ower Generation Ammonia Production DEPA’s industrial customers

Gas Supply Companies Other customers GAS SUPPLY TO GREECE IN 2003 (mil Nm3 / yr) 536

1766

Russian gas Algerian gas

GAS SUPPLY CONTRACTS Min (bcm / yr) Max (bcm / yr) With Russian GAZEXPORT 1,92 2,8 With Algerian SONATRACH 0,51 0,68 With Turkish BOTAS (*) 0,25 0,75 TOTAL 2,68 4,23 (*): The supply from Turkey will start late 2006 FUTURE GAS DEMAND ASSUMPTIONS

6905 6026 7000 6000 5000 3051 4000 3000 (mill. NM3) 2000 1000 0 2005 2010 2015 Year DEPA’s key strategic goals z Promoting Greece as a hub for the transportation of natural gas - Transiting natural gas from Caspian/Middle East area to Europe - Integrating into European energy markets - Strengthening its position in the wider Balkan region z Diversifying its suppliers of natural gas to achieve best economic terms z Increasing gas consumption in all customer categories in Greece - Power generation Industrial sector - Commercial and residential sector CNG sector z Supporting liberalisation of the Greek electricity market z Preparing for further liberalisation of the Greek gas market GAS STATISTICS AND PROSPECTS FOR E.U. NORWAY

Russian gas Norwegian gas 41 % 9 Gas share in Primary Energy 25 % Consumption: Present EU – 15 : 24% Greece : 7% Forecast (2010) EU – 15 : 26% Algerian gas 29 % Greece : 16% 9 Dependence of Gas Supply on Imports:

Russian gas Present 45 % EU – 15 : 45% South East. EU : 75% Greece : 100% Forecast (2010) EU – 15 : 60% Algerian gas South East. EU : 90% 53 % Greece : 100% EU Natural gas demand &supply outlook 2002 - 2020

600

500

400

300 ( billion Nm3 ) Nm3 billion ( 200

100

0 2002 2005 2010 2015 2020

Indigenous production Contracted imports Additional supplies Demand

Source: EUROGAS Annual Report 2002 POTENTIAL NEW SUPPLIES TO EUROPE

WITH DIVERSIFICATION OF ORIGIN

• Caspian Sea region: Azerbaijan, Turkmenistan, Kazakhstan, Uzbekistan

• Middle East region: Iran, Iraq

• North Africa region: Egypt, Libya. THE EASTERN GAS TO EUROPE PROJECT

Dutch &Norwegian gas Russian gas Kiev Prague Luxembourg

Vienna Bratislava Russian gas MOLDOVA WestBudapest Balkan Pipeline Vaduz Bern Kishinev

Ljubljana SEA OF AZOV Zagreb Russian gas A Belgrade D Bucharest R ITG Project San MarinoI Monaco A Sarajevo C L I G U R LNGI A N T LNG I B L A C K S E A S E A C A Sofia S E AzeriS

A Blue Stream gasP Rome Scopje Kirklareli Tbilisi

Tirane Istanbul I komotini Eregli A

Brindisi Izmit Baku LNG N T Y R R H E N I A N Erzurum Yerevan Ankara Karacabey Bursa Thessaloniki S E A Otranto Can A Karacabey S Kirsehir Erzincan E Eskisehir E Algerian G Perdika Izmir E Izmir A LNG A Kayseri Turkmen N LNG gas LNG S Iranian Tunis E IGI Project gas A

Valletta Upgrade LNG Terminal Tehran Nicosia Iraqi Algerian gas M E D I T E R R A N E A N S E A Beirut gas Libyan Damascus Baghdad

Tripoli gas Egyptian Amman LNG Jerusalem 1. Interconnector Turkey – Greece (ITG project)

Greek part Komotini – Alexandroupolis -Greek/Turkish border: 85 Km, 36 ÃPLQLPXP Budget: 118 M¼ Financing: Technical studies EU grants (TEN) 50% DEPA;s equity 50% Construction EU grants (CSFIII) 29% Greek State 29% Other 42%

Turkish part Karacabey – Turkish/Greek border 200km, 36 ÃPLQLPXPÃ(17 km submarine, max. depth: 70 m). Budget: 165 M¼ Financing: Technical studies EU grants (TEN) 50% BOTAS’ equity 50%

Capacity of the project: 11-18 bcm/yr ACCOMPLISHMENTS UP TO NOW

9 Basic design completed (DEPA) 9 Detailed engineering completed (DEPA) 9Border Station Conceptual design completed 9 Border Station basic design started 9 Signing of an Interstate Agreement between Greece and Turkey for the implementation of the project (Thessaloniki 23.02.2003) 9 Completion of the technical studies (BOTAS) 9 Signing of the Gas Sale and Purchase Contract between DEPA and BOTAS (ANKARA 23.12.2003) NEXT STEPS

Interconnector Turkey-Greece (I.T.G.) Project

Construction bidding procedures and awards

Planned start of operation: 2006 2. Interconnector Greece – Italy (IGI project)

Pre-feasibility study figures

1st phase (up to 2 bcm gas to Italy): 280 km pipeline between Trikala andStavrilimenas 224 km off-shore pipeline between Stavrolimenas and Otranto Italy

2nd phase (up to 4 bcm gas to Italy): 215 km doubling pipeline between Komotini and Karperi

3rd phase (up to 8 bcm gas to Italy): –95 km doubling pipelinebetween Karperi and Trikala

4th phase (more than 8 bcm to Italy): –Doubling of the off-shore pipeline

Compressor stations (for the transit of 8 bcm to Italy) CS1: Greek/Turkish borders: Total Power ~ 18 MW CS2: Nea Mesimvria: Total Power ~ 38 MW CS3: Stavrolimenas: Total Power~ 24 MW.

Budget: 1242.8 mill. ¼.

Funding: Provisional financing from CSF III (EU) for Greece ACCOMPLISHMENTS UP TO NOW

9 Prefeasibility study completed in Mid-2003 9 Application for financial aid for feasibility study under the TEN – ENERGY PROGRAMME. 9 Award of technical feasibility study. Execution in progress. Joint cooperation DEPA, EDISON, BOTAS. 9 Procedures for awarding the economic/financial study.

NEXT STEPS 9Completion of feasibility study by late summer 2004 9 Signing of commercial agreement and final investment decision

Planned start of operation: End of 2007 IGI Pre-feasibility Study

The pre-feasibility study included the following activities:

¾ Italian Market Assessment { Definition of the gas volumes to be imported through the IGI { Assessment of a benchmark border price to the Italian market ¾ Technical Pre-feasibility { Definition of the needed infrastructures to transport the required gas volumes { Assessment of the investments on the Turkish, Greek and offshore sections of the gas axe ¾ Economic Pre-feasibility { Assessment of the competitiveness of the gas imported through the proposed route Following activities

IGI Feasibility Study ¾ Technical { Technical and economical evaluation of pipeline alternatives { Assessment of IGI Investment Cost (+/- 20 %) { Review of Investments required in the Turkish grid { Preliminary survey of pipeline route { Engineering of selected configuration

¾ Financial { Development of a financial model to assess the economic viability of the project { Definition of possible corporate structures for project construction and operation { Definition of preliminary financial plan to analyse different debt funding options

Proposal to the EC for financial aid On April 2003 DEPA and EDISON have presented to the EC, within the TEN Program, a Proposal for the financing of the feasibility study phase 3. West Balkan pipeline project

Aims to transit gas to the West Balkan region and possibly, thereafter to E.U.

Signing on April 8, 2003 in Thessaloniki a protocol by DEPA and BOTAS with the respective organizations of FYROM, Albania Yugoslavia, Bosnia/Herzegovina, Croatia, Slovenia.

The scope of the protocol provides for the initiation of a joint cooperation among the parties to study, evaluate and implement an alternate gas transport routing. Bratislava Dutch &Norwegian gas MOLDOVA Russian gas Budapest aduz Kiev Kishinev Prague Rogatec Luxembourg Szeged Gorizia Ljubljana Zagreb

Karlovac Vienna Bratislava Russian gas MOLDOVAA Belgrade Budapest D Bucharest Loznica Vaduz San MarinoR Bern Kishinev I Sarajevo A NG N T B L A C K Ljubljana I SEA OF AZOV Zagreb C Sofia Pristina S Russian gas E A Belgrade Rome A Scopje D Bucharest Kirklareli R Tirane San MarinoI Kipi / Ipsala Istanbul Eregli Monaco A Sarajevo 85 Km Brindisi 20 0 K m T LNG IzmitC L I G U R LNGI A N I C B L A C K S E A S E A T Y R R H E N I A N Thessaloniki A Ankara Sofia KaracabeyKaracabeyBursa S Otranto S E S E A A Can Azeri A Blue Stream P E Eskisehir Rome Scopje Kirklareli Tbilisi gas Stavrolimenas G Tirane Istanbul I komotini Er egli E IzmirIzmir A Izmit Brindisi Baku LNG N Yerevan T Y R R H E N I A N Ankara Erzurum Karacabey Bursa Thessaloniki S E A Otranto Can A Karacabey S Erzincan Kirsehir E Eski sehir E Algerian G Perdika Izmir E Izmir A LNG A Kayseri Turkmen N LNG gas LNG S Iranian Tunis E A gas

Valletta Tehran Nicosia Iraqi gas Algerian M E D I T E R R A N E A N S E A Beirut gas Libyan Damascus Baghdad

Tripoli gas Egyptian Amman LNG Jerusalem 4. Upgrade of the Revithoussa LNG Terminal

Increase of send-out capacity from 220.000 to 600.000 Nm3/h Financing: EU grants (CSF III) 22.5% Greek State contribution 22.5% Other 55%

Current status of the project : construction bid

NEXT STEP Award of construction contract

Planned start of operation: end 2005