Nord Stream 2

Status 3 May 2017

Enhancing European Energy Security

2

The Pipeline Will Run Through the Baltic Sea – Along the Proven Nord Stream Route

> With an overall length of 1,200 km, the Nord Stream 2 Pipeline will connect Europe to the largest gas fields in the world, in Russia

RUSSIA

ESTONIA

LATVIA

FINLAND

LITHUANIA

POLAND

SWEDEN

RUSSIA

NORWAY

DENMARK

Narva Bay

> Design & implementation verified by independent certification

> Extensive international consultation and permitting process

> Construction and design will follow the Nord Stream model

> Route optimised for maximum efficiency and minimum impact on the environment

Lubmin nearGreifswald

GERMANY

3

> Nord Stream 2 is a new natural gas pipeline through the Baltic Sea to connect Europe to the largest gas fields in the world, supplementing existing gas transportation with up to 55 bcm/a

> Nord Stream 2 is a privately funded project to reinforce the European gas supply, backed by major European companies

> EU domestic gas production has fallen in recent years and is expected to fall further within the next 20 years (-50%, about 70bcm less) while traditional suppliers from Norway (-25bcm) and Northern Africa (-30bcm) will not be able to supply Europe at today’s level anymore

> At the same time, EU gas demand remains steady so additional gas imports and capacity are required to meet European demand and safeguard supply security

> Nord Stream 2 will bring considerable benefits by:− Increasing security of supply – by connecting to the world’s biggest gas reserves− A more competitive EU gas market – by adding new capacity the market needs − Supporting sustainability goals – natural gas is a cost-efficient decarbonisation option

Nord Stream 2: a Commercial Initiative to Reinforce the European gas supply

941 994 1,113

20302020Current2)

+18,3%

1,038

2040

164165270198

2020Current2)

+63,6%

2030 2040

143131 312208Current2) 20302020

+138,2%

2040

705 832

Current2) 2040

1,433

2030

1,136

+103.3%

2020

441 509 660 804

20302020

+82,3%

2040Current2)

Americas

Eastern Europe & Eurasia

Asia & Oceania

Middle East

Africa

Latin America

Global

2020 3,794

Current2) 3,502

2040 5,169

2030 4,439+49%

4

Global Gas Demand Is Set to Grow by About 50% by 2040, Increasing Competition Over Gas

1) Demand growth leads to increased need for LNG because production and consumption locations further diverge from each other, i.e. Asian region is among the largest consumers globally, but has close to no natural gas resources itself or in proximity of a pipeline

2) Current = 2014Source: IEA WEO (2016)

World Energy Outlook 2016: Natural gas demand in New Policies Scenario [bcm]

657 655 678 725

204020302020

+10,4%

Current2)

Europe competes with other regions over gas

resources

5

A European Natural Gas Supply Gap Is Emerging due to Decreased Production

133 bcm

119 bcm

141 bcm

481 bcm 472 bcm

European gas demand mostly stable

2015 2035

41 bcm

72 bcm

94 bcm

288 bcm

8 bcm10 bcm

35 bcm

Russia

LNGNorthern Africa

Norway

EU

**

(Azeri)

120 bcm import gapto be filled by Russian gas and

LNG, share will be set by the market

Drop in domestic production and lower output from other supply

** Statistical difference of ~12 bcm in 2015Sources: adapted from Prognos 2017, based on EU Reference Scenario 2016, adapted with NOP 2015, OGA (Oil and Gas Authority) production projections, February 2016, NEP Gas 2016, Norwegian Petroleum Directorate; The Oxford Institute for Energy Studies, Algerian Gas: Troubling Trends, Troubled Policies, May 2016; The Oxford Institute for Energy Studies, Azerbaijan’s gas supply squeeze and the consequences for the Southern Corridor, July 2016, BP Statistical Review of World Energy, June 2016; demand includes EU-28 and Switzerland, excludes western imports to Ukraine

6

Nord Stream 2 Increases Security of Supply

Russia47,768 bcm

Ob-Taz bay gas fields

thereofBovanenkovo4,900 bcm

Source: BGR 2016

> Nord Stream 2 provides the most direct access to the world’s biggest gas reserves − Bovanenkovo alone holds more than

double the EU’s total proven reserves− Reserves of over 47,000 bcm connected

to European consumers− Ready to export fields add 100 bcm of

new supplies whenever needed

> Provides a total capacity of 55 bcm of gas, enough to power 26 million households

> Strategic location to supply Europe – not at risk with rising global gas competition (+25-30% demand by 2035)

> Offers an additional transport system to Europe, enhancing supply security

Norway1,856 bcm

EU-281,513 bcm

> Gas flows freely within the EU internal market and will be traded at hubs in competition with other gas sources

> Nord Stream adds more liquidity, thereby stimulating new connections and enhancing the functioning of the integrated market – in line with EU energy strategy

> It is the most cost effective option for Europe due to:− Major long term investment in the

Russian gas fields − Efficiency of offshore route, where high

powered compression saves fuel gas

> Increased competition benefits the European economy

7

Nord Stream 2 for a More Competitive EU Gas Market

> Competitive route option for delivering gas to hubs in North-Western Europe and to the hub in Baumgarten

> Transportation tariff attractive for shipper

> With rising import requirements, EU benefits from multiple routes to bring gas to the EU gas market

8

Nord Stream 2 Is a Competitive Transport Option

33.7

41.8

55.1

40.7

0

10

20

30

40

50

60

German-Netherlandsborder

Baumgarten

Nord Stream

Ukraine

Cost of Transport from the Russian border (Euro per 1,000 m3)

Calculations made based on open sources, incl current tariffs of TSO’s (transmission system operators) and revenue assumptions for the potential route via the Black Sea1Source: New Europe, 'Nord Stream 2 vs Ukraine transit: costs should decide', 5 July 2016, https://www.neweurope.eu/article/nord-stream-2-vs-ukraine-transit-costs-decide/

Tariff rates for 1000 m3 on 100 km:

Nord Stream 1: < 2 EURNord Stream 2: < 2 EURUkraine current: ~2.26 EUR1

Ukraine new regime: ~4.30 EUR

9

High Capacity Utilisation of the Nord Stream Pipeline at ~80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2011(Nov-Dec)*

2012* 2013 2014 2015 2016 2017(Jan-Apr)**

* Based on 27.5 bcm per year; all other yearly figures based on 55 bcm.** Based on 167.4 mcm per day.

Gas transported until Apr 2017: 170.0 bcm

10

Nord Stream 2 Delivers Sustainability Benefits

Sust

aina

bilit

y B

enef

its

Low-emission Gas Transport

Lower CO2Emissions in Power

Generation

Environmentally Friendly Pipeline

> Better carbon footprint than LNG liquefaction chain> Lower emissions from fuel gas use than onshore

systems due to efficient compression to 220 bar

> Use of 55 bcm natural gas instead of coal could save 14% CO2 emissions of EU power generation

> Ideal partner to renewables

> Can be constructed in a fraction of the time compared to onshore systems

> Monitoring of Nord Stream shows environmental impact is minor, local and short term only

> Generating electricity from gas-fired power plants produces up to 50% less CO2 than from coal-fired plants

> Gas-fired power stations are more efficient than coal: 60% compared with 25-45%

> Nord Stream 2 could save ~14% of the EU’s total CO2 emissions from power generation if the 55 bcm gas replaced the same amount of coal

11

Gas Supports Decarbonisation Goals

865

216

49

77%

Electricity mix 2014 in EU-28 by energy source*

Power sector emissions

* Source: IEA, WEO 2016

mtCO2

Coal27%

Gas14%

Nuclear28%

Oil2%

Hydro12%

Wind8%

Solar3%

Biomass and waste

6%

2020 >2015 2016 2017 2018 20192012-13

The Project Is Well Underway

Construction and Commissioning

Feasibility Study

Operation

EIA ProgrammeConsultation

Environmental Monitoring

Surveys and Engineering

Procurement and Delivery, Pipe Logistics

Permitting and Environmental Impact Assessments

> Material and service contracts− All major tenders awarded: steel, logistics, pipelay− Delivery of the first pipes to concrete coating plant

end of September 2016 – 30% at the stock yards by April 2017

− Concrete weight coating started in March 2017

> Permits and surveys− Espoo Report, Finnish EIA, and permit

applications submitted in Sweden, Denmark and Germany; remaining ones to follow in 2017

− Over 47,000 km of surveys completed using 24 different vessels

13

Significant Advancements Within Timeline Have Been Made

14

Nord Stream 2 – a European Project

Italy

UK

Denmark

Germany

Russia

Sweden Finland

Netherlands

Switzerland

Norway

Port of MukranPort of HaminaKotkaPort of Karlshamn

Logistics

3

12

4 Port of Hanko Koverhar

3

42

19

Pipes & MaterialsEUROPIPEOMKChelpipePetrolValvesVoestalpineMMK Dillinger HütteImpalloyWasco Coatings

2

1

4

Saipem FanoFugro SurveyGeoNextMMTN-Sea

Engineering & Surveys

1

2 3

RambøllIfaÖDNV GLSvarog

Company Headquarter in Zug

123

Business TrendDelta Energy ServicesIntertek

4

567

Environmental Studies, Quality Management, Safety & inspection

5

1

26

3

5

4

3

5

6

1

1 Austria

A multi-billion euro investment in European industry and services involving over 200 companies from 17 countries. A selection:

1

8

Offshore PipelayAllseas1

1

765

34

2123

6

7

7

98

4

654

Leading Energy Companies Are Strongly Committed to Implementing the Project

100% Shareholder

provides up to 50 percent of the

estimated project cost of 9.5 billion euros.

Financial Investors

support the project by providing up to50 percent of the

financing, up to 950 million euros each.

15

Project Developer

What Financial Investors Say About Nord Stream 2

“We should not politicise this economic project, which will increase security of supply. Europe needs to diversify

import routes for Russian pipeline gas. Every new pipeline increases liquidity and competition in Europe’s gas

market”(Quote in Handelsblatt.com article - 06/04/2017)

Rainer Seele, CEO, OMV

“I have always said that I believe this project is strategically relevant for Europe. It is strategically

important for us too” (Interview with Energy Post - 17/02/2017)

“The financial commitment of the European companies underscores the strategic importance of the Nord Stream 2

pipeline project for the European gas market” (Signing of the financing agreements-24/04/2017)

Klaus Schäfer, CEO, UNIPER

“ENGIE is proud to support Nord Stream 2. This project will improve security of gas supply in Europe… it will also

reinforce the role of gas, a low-carbon energy source, in the energy transition”

(Twitter @isabelle_kocher - 24/04/2017)Isabelle Kocher, CEO, ENGIE

> EUR 8 billion CAPEX

> EUR 9.5 billion total expenditure (including financing costs)

> 70% of funds will be secured from financial markets

> 30% shareholder funding

> 220 employees from 20 nations, based in Zug, Switzerland –additional offices in St Petersburg and Moscow

> Investments in over 10 European countries

Nord Stream 2 Is a Privately Financed and Fully Operational Project Developer

18

For further information, please contact:

Contact

Email: info@nord-stream2.com

Website: www.nord-stream2.com

Twitter: @nordstream2

Nord Stream 2 AG

Baarerstrasse 52

6300 Zug, Switzerland