GAZPROM IN EASTERN RUSSIA, ENTRY INTO ASIA-PACIFIC MARKETS Moscow, - PowerPoint PPT Presentation

GAZPROM IN EASTERN RUSSIA, ENTRY INTO ASIA-PACIFIC MARKETS Moscow, June 14, 2016

Kirinskoye Field Pre-Development In 2015, the construction of the second development well was completed at the Kirinskoye field, with another two wells entering the construction phase (drilled to the producing horizon). The construction of these wells is scheduled for completion in 2016 with drilling another two to the producing horizon. In 2019, the total number of development wells will increase to seven. 2

Kirinskoye Field Pre-Development In 2015, Kirinskoye produced 604.6 mln m 3 of gas and 104.3 thous. t of gas condensate. Due to a seasonal decrease in the regional gas consumption, production is carried out on a periodic basis. Upon reaching the design capacity, annual gas production will grow to 5.5 bln m 3 . Condensate is supplied into the oil pipeline owned by Sakhalin Energy. 3

Yuzhno-Kirinskoye Field Pre-Development Kirinsky prospect Sakhalin Island Vostochno- Kirinskoye Kirinskaya Lunskoye Sakhalin Island Yuzhno-Kirinskoye Yuzhno- Zapadno- Lunskaya Kirinskaya Mynginskoye Field development project was prepared in 2015; pre-development infrastructure is being currently designed. Gas production is scheduled to start in 2021. 4

Chayandinskoye Field Pre-Development Project targets: • Annual gas production – 25 bln m 3 OTU • Annual oil production – 1.9 mln t • Annual condensate production – 385 thous. t Gas-bearing reservoir: PGTU-2 OTU – OPS 11 oil • Gas production – 335 wells trunkline • Preliminary treatment – PGTU-2, PGTU-4 (preliminary gas treatment units) Power of Siberia gas trunkline • Gas treatment and delivery into GTS – CGTU-3 (comprehensive gas PGTU-3 treatment unit) Oil rim: • Oil production – 310 wells PGTU-4 On-site road • Oil treatment – OTU (oil treatment unit) • Oil delivery – DAP (delivery and acceptance point) 5

Kovyktinskoye Field Development Gas production from the Kovyktinskoye GTU-102, Kovyktinskoye field field is scheduled to start in 2022. Annual design output will be 25 bln m 3 of gas, with a total of 514 producing wells (throughout the development period). 6

Advancement of Technology for Helium Separation from Natural Gas at Kovyktinskoye Field Parameters of pilot membrane unit for helium separation (PMU-100) Flowrate 100 thous. m 3 /day Inlet pressure 3.5 MPa Helium content in feed gas 0.28% Helium content in gas after max 0.05% treatment in PMU-100 Yield of treated gas min 97.0% Number of stages in membrane separation 2 process 7

Natural Gas Deliveries to Chinese Market Pipeline gas supply to the Chinese market is a high priority for Gazprom Group. In 2015, considerable success was achieved in expanding strategic partnership with Chinese companies. 2015 highlights: western Russia eastern route Project for In December 2015, Gazprom and CNPC entered into the route gas Agreement on design and construction of the cross-border deliveries 30 bln m 3 section of the Power of Siberia gas pipeline, including the from 38 Gas supplies via bln m 3 submerged crossing via the Amur River. Russian eastern route Far East Mongolia In the same month, the parties signed the Agreement of communications at Power of Siberia cross-border section. Beijing Negotiations  In May 2015, Gazprom and CNPC signed the Heads of regarding western Agreement for gas deliveries to China via the western route. route China Shanghai  In September 2015, Gazprom and CNPC inked the Project for gas Memorandum of Understanding for the project of pipeline gas supplies from India supplies to China from the Russian Far East. Russian Far East In addition to pipeline gas supplies, Gazprom actively cooperates with Chinese companies in other business areas: JOINT OFFSHORE COMPRESSED NATURAL SCI-TECH LNG SUPPLIES TO UNDERGROUND EXPLORATION AND GAS-FIRED POWER GAS AND SMALL-SCALE COOPERATION CHINA GAS STORAGE PRODUCTION GENERATION LNG PRODUCTION PROJECTS 8

Power of Siberia Gas Trunkline Length — over 4,500 km in one continuous string. Diameter — 1,420 mm. Pressure — 9.8 MPa. Annual export capacity — 38 bln m 3 of gas. 9

Expansion of Gas Distribution Station (GDS) Network in Far Eastern Federal District 2/1 GDS Constructed GDSs Gazprom Region Gazprom’s Mezhregiongaz’s Operational GDSs GDSs to be 1/1 GDS commissioned in 2016 Kamchatka Territory 2 1 3/1 GDS Primorye Territory 1 0 Sakhalin Region 1 1 1/0 GDS Khabarovsk Territory 3 1 TOTAL 7 3 10

NGV Infrastructure Development in Far Eastern Federal District CNG infrastructure (CNG filling stations) To be commissioned in 2016: - Yuzhno-Sakhalinsk – 2 stations; - Petropavlovsk-Kamchatsky – 1 station. To be commissioned in 2017: - Khabarovsk – 1 station. To be commissioned in 2018: - Komsomolsk-on-Amur – 1 station; - Vladivostok – 1 station; - Korsakov – 1 station; - Dolinsk – 1 station. 11

LNG Business of Gazprom Group Despite the declining LNG demand from traditional importers in Northeastern Asia (Japan and Korea) over the past few years, Asia-Pacific remains a key growth center in global LNG trade due to the emergence of new gas markets in the region. LNG demand in Asia-Pacific countries New LNG markets in Asia-Pacific 120 160 Vietnam Вьетнам Sakhalin II 100 Philippines Филиппины Sakhalin II 120 (TPT 1 ) mln t of LNG per year Bangladesh Бангладеш 80 Pakistan Пакистан bln m 3 Pakistan 60 80 Singapore Сингапур Bangladesh India Thailand 40 Малайзия Malaysia Vietnam 40 Philippines Indonesia Индонезия Singapore 20 Malaysia Thailand Таиланд Indonesia - - Индия India 2015 2020 2025 2030 Note 1: third production train In 2015, Gazprom Group supplied nearly 3 mln t of LNG to Asia-Pacific countries. The Company is actively expanding its presence in the Asia-Pacific market. 2015 saw considerable progress in constructing the third production train within the Sakhalin II project. Geography of LNG supplies from Gazprom Group portfolio between 2005 and 2015 Project for third production train of LNG plant, Sakhalin II Key project benefits FOB– 4% Kuwait – 2% In 2015, Gazprom and Shell signed the Memorandum to construct the third 4 3.6 3.4 Egypt – 2% production train of the LNG plant within Sakhalin II . The design phase Argentina –10% China – 4% began in December 2015. 3 2.3 Thailand – 6% mln t of LNG India – 11% 1.9 The project for the construction of the third production train has a range of 2 1.5 1.4 1.4 South Korea – 16% competitive advantages:  SEIC practice of interacting with buyers; 1 0.5 0.3 0.3 0.1  well-developed resource base; Japan – 46% 0  proximity to key LNG consumption regions; 2005 2007 2009 2011 2013 2015  available infrastructure within LNG project. DES to Asia- DES to other FOB Pacific regions 12

Third Production Train of LNG plant, Sakhalin II project LNG plant Expansion of existing GTS • Project operator – Sakhalin Energy Investment Company Ltd. • Common infrastructure • Projected output – up to 5.4 mln t per year • Третья технологическая линия Commissioning in 2021 • Third production train Target markets – Asia-Pacific countries • Start of project documentation development in 2015 • DMR liquefaction technology • Feed gas supplies from fields of Sakhalin gas production center • Partners – Shell, Mitsui, and Mitsubishi • Project benefits Possibility to apply project solutions used in existing production trains • Cost saving through use of existing gas transmission system and LNG plant infrastructure • Project status On June 18, 2015, Alexey Miller, Chairman of the Gazprom Management Committee, and Ben van Beurden, Chief Executive Officer of • Shell, signed the Memorandum to construct the third production train of the LNG plant within the Sakhalin II project. The document defined the project resource base and reflected the importance of moving the project into the investment phase. In December 2015, Sakhalin Energy Investment Company Ltd. started to develop the project documentation for the third production train • of the LNG plant within Sakhalin II. 13

Planned Scheme for Commodity Exports from Amur GPP Propane and butane Amur GPP Shipping products in railcars to Far East with further • LPG tanks transshipment via specialized terminal LPG will be delivered to buyers by refrigerated vessels of • Svobodny settlement LPG terminal VLGC class Commodities will be supplied to buyers on FOB or CFR • basis Helium trucks Major sales markets – Japan, South Korea, and other • Asia-Pacific countries Planned delivery volume – up to 1.5 mln t per year • Helium hub Liquefied helium Shipping helium in special tank containers • Gas carriers and Transportation by road to logistic hub near container ports • container ships Japan Delivery of containers to buyers in port • Major sales markets – China, Japan, South Korea, Taiwan, • etc. Planned delivery volume – up to 60 mln m 3 per year • 14