Press Conference, May 31, 2016

GAS EXPORT AND ENHANCING RELIABILITY OF GAS SUPPLY

TO EUROPE

Volume and average price data for Gazprom Group’s gas

in countries beyond former Soviet Union*

Volume and average price data for Gazprom Group’s gas

in CIS and Baltic States

2

Net revenue** from gas sales in countries beyond FSU Net revenue** from gas sales in CIS and Baltic States

* Gas supplies, incl. LNG, to foreign countries except for CIS and Baltic States under contracts of Gazprom Export and other Gazprom companies.

** Net of customs duties.

GAS SALES BY GAZPROM GROUP

167.6 148.3 148.1

156.6 151.0

174.3 159.4

184.4

10,125 9,414 9,167 11,259 11,970 12,138

13,487 15,057

0

50

100

150

200

2008 2009 2010 2011 2012 2013 2014 2015

RU

B/1

,000

m3

bln

m3

1,261 1,105 1,099

1,439 1,469 1,683 1,752

2,166

0

500

1000

1500

2000

2500

2008 2009 2010 2011 2012 2013 2014 2015

RU

B b

ln

357 310

450

637

530

420 412 430

0

250

500

750

2008 2009 2010 2011 2012 2013 2014 2015

RU

B b

ln

96.5

56.7

70.2

81.7

66.1 59.4

48.1 40.3

3,957

6,411 7,039 8,509 9,490 8,500 10,116

11,911

0

25

50

75

100

2008 2009 2010 2011 2012 2013 2014 2015

RU

B/1

,000

m3

bln

m3

Poland (8.9)

France (9.7)

United Kingdom (11.1)

Italy (24.4)

Turkey (27.0)

Germany (45.3)

3

GAS SALES BEYOND FSU UNDER CONTRACTS OF GAZPROM EXPORT

• Sales under contracts of Gazprom Export in 2015 totaled 158.6 bln m3

• Net revenue from gas sales beyond FSU reached RUB 2.2 trln in 2015

• Germany, Turkey, and Italy were major gas buyers in 2015

bln m3

Kazakhstan (4.7)

Ukraine (7.8)

Belarus (18.4)

4

2015 RESULTS BY COUNTRIES: CIS AND BALTIC STATES*

bln m3

* According to financial statements under IFRS

• Gas sales in CIS and Baltic States in 2015 totaled 40.3 bln m3

• Net revenue from gas sales in CIS and Baltic States amounted to RUB 430 bln in 2015

5

LEADING ROLE OF GAZPROM GROUP’S GAS IN

EUROPEAN MARKET

Gazprom’s* share in European gas consumption Gazprom’s* share in European gas imports**

* Gas sales under contracts of Gazprom Export

** Difference between consumption and domestic production

179.0

125.2

48.9 44.6 37.6 28.2 8.7 7.8

0

50

100

150

200

Gaz

prom

Gro

up

Nor

way

Net

herla

nds

Uni

ted

Kin

gdom

Alg

eria

Qat

ar

Iran

Nig

eria

Gas supplies to Europe by major exporters and producers in

2015 (excluding Baltic States), bln m3

Short-term forecasts for gas consumption from leading

global companies (consumption 2008 = 100%)

151.

1

150.

5

158.

8

140.

6

138.

6

150.

0

138.

8

161.

5

146.

6

158.

6

583.6 582.8 597.5 563.6 602.0

551.3 542.5 540.4 485.7 505.9

26% 26% 27% 25% 23% 27% 26% 30% 30% 31%

0

100

200

300

400

500

600

700

800

900

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

100.0

90.1

81.0

85.5

88.0 90.4

92.6

85.2 85.4 85.4

78

84

89

95

100

2006 2008 2010 2012 2014 2016 2018

%

Actual 2006-15

CERA (November 2014)

CERA (March 2016)

PIRA (July 2015)

PIRA (April 2016)

151.

1

150.

5

158.

8

140.

6

138.

6

150.

0

138.

8

161.

5

146.

6

158.

6

258.9 270.9 272.9 256.8 290.7

262.1 252.3 257.6 219.2

242.1

58% 56% 58% 55% 48% 57% 55% 63% 67% 65%

0

100

200

300

400

500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

6

INCREASING GAP BETWEEN CONSUMPTION AND

DOMESTIC PRODUCTION IN EUROPE

According to consensus forecast, Europe’s demand for extra gas imports versus 2015 will be nearly 113 bln m3 in 2025 and 150 bln m3 in 2035

Source: forecasts by top consulting and analytical companies as well as leaders of petroleum industry

0

100

200

300

400

500

600

700

800

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

202

6

202

7

202

8

202

9

203

0

203

1

203

2

203

3

203

4

203

5

bln

m3

Диапазон прогнозов добычи Диапазон прогнозов потребления

Консенсус-прогноз добычи Консенсус-прогноз потребления

Production forecast range

Production consensus forecast

Consumption forecast range

Consumption consensus forecast

7

DECLINING ATTRACTIVENESS OF U.S. LNG SUPPLIES TO

EUROPE

Forward contract prices in Europe are compromising commercial attractiveness of future LNG supplies linked to Henry Hub prices

Estimated price range* for U.S. LNG supplies to Europe versus forward prices** in European gas

market

* Based on Henry Hub forward prices, P = HH * 115% + X, where X – costs (liquefaction, shipments, regasification)

** NBP forward prices

Sources: Bloomberg, Wood Mackenzie

0

2

4

6

8

10

0

50

100

150

200

250

300

350

400

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

Jul-2

0

Jan-

21

Jul-2

1

Jan-

22

Jul-2

2

Price range for American LNG in Europe

Price range for American LNG in Europe excl. tolling fees

NBP prices (forward curve)

USD/1,000 m3 USD/MBTU

8

FORECASTED GROWTH IN GAS-FIRED POWER

GENERATION

Power industry shows greatest growth in gas consumption across Europe. Even EC’s most radical ecology-oriented scenario, with highest subsidies for RES, envisages increased gas use for power generation. According to baseline scenario, by 2025 gas-fired power generation in EU will grow by one-third versus 2015.

Baseline scenario* 2030 Energy Strategy scenario**

* 21% increase in energy efficiency by 2030, 33% reduction of greenhouse gas emissions by 2030 versus 1990, 24.4% share of

RES in primary energy consumption by 2030.

** 27% increase in energy efficiency by 2030, 40% reduction of greenhouse gas emissions by 2030 versus 1990, 27% share of

RES in primary energy consumption by 2030.

Source: European Commission, ENTSO-E

855

847

844

841

838

834

831

828

825

821

818

815

812

808

805

802

799

260

317

347

377

407

437

468

498

528

558

588

619

649

679

709

739

769 82

3 83

1 80

7 78

4 76

0 73

6 71

3 68

9 66

5 64

2 61

8 59

5 57

1 54

7 52

4 50

0 47

6 438

473

489

505

521

537

554

570

586

602

618

634

650

666

682

698

714

0

500

1000

1500

2000

2500

3000

3500

4000

2014

2016

2018

2020

2022

2024

2026

2028

2030

TWh

33.3

%

33.6

%

855

847

841

834

827

820

814

807

800

793

786

780

773

766

759

753

746

260

317

353

389

425

462

498

534

570

607

643

679

715

752

788

824

860

823

831

801

771

740

710

680

650

620

589

559

529

499

469

438

408

378

438

473

476

478

481

484

487

489

492

495

497

500

503

505

508

511

513

0

500

1000

1500

2000

2500

3000

3500

4000

2014

2016

2018

2020

2022

2024

2026

2028

2030

Oil

Gas

Coal

Wind

Solar and tidalenergy, etc.Biomass

Hydro

Nuclear

TWh

26.4

%

40.1

%

9

GAZPROM IN INTERNATIONAL NGV MARKETS

‒ further developing CNG and cryogenic gas filling network;

‒ increasing small-scale LNG supplies to international

markets;

‒ boosting NGV business beyond Europe if Gazprom

implements international production projects with a view to

commercialize gas produced abroad.

Gazprom intends to expand its presence in

international NGV markets through:

Gas sales through Gazprom’s filling stations

mln

m3

Gazprom Group’s filling stations in Europe

Gazprom is developing logistics infrastructure in

order to establish itself in international NGV

markets

‒ construction of small-scale LNG terminal is underway in port

of Rostock;

‒ Gazprom entered into Framework Agreements with

Nederlandse Gasunie (Netherlands) and Fluxys (Belgium) to

expand small-scale LNG infrastructure.

0

10

20

30

40

50

60

2012 2013 2014 2015

Польша

Чехия

Германия

Poland

Czech Republic

Germany

Poland

Czech Republic

Germany

UNDERGROUND GAS STORAGE: ENSURING STABLE,

RELIABLE, AND FLEXIBLE SUPPLIES

2015: development of Europe’s underground gas storage system

British UGS facilities

Banatski Dvor

Katharina

Bergermeer

Haidach

Damborice

During 2015/2016 withdrawal season,

Gazprom operated 5.0 bln m3 of gas storage

capacities in Europe.

Maximum daily deliverability of UGS facilities in

Western Europe was 61.5 mln m3 during

2015/2016 withdrawal season.

Construction is currently in progress at Katharina and Damborice UGS facilities:

• Katharina UGS project is on track (4 caverns are functioning; working gas capacity is 219 mln m3);

• construction of Damborice UGS facility with design working gas capacity of 456 mln m3 is nearing

completion in Czech Republic.

10

NORD STREAM 2

11

• Nord Stream 2 project envisages construction of gas

pipeline across Baltic Sea with entry point in

Kingisepp District of Leningrad Region and exit point

near Greifswald in Germany

• Length of gas pipeline – around 1,200 km

• Annual capacity – 55 bln m3 of gas

• In addition to higher reliability of supplies, Nord

Stream 2 project is consistent with EU objectives for

energy security and harmful emissions reduction

• Nord Stream 2 AG project company was set up for

project implementation

Project partners

THANK YOU FOR YOUR ATTENTION!