NordStream Presentation

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Nord Stream Current Status And Progress
Achieved So Far
Russian Economic and Financial Forum in
Switzerland Paul Corcoran, Financial Director,
Nord Stream AG Zurich, 17 March 2008
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A NEW NATURAL GAS SUPPLY ROUTE FOR EUROPE

• 1,220-kilometre-long offshore natural gas
  pipeline across the Baltic Sea
• Two parallel pipelines with a total capacity of
  55 bcm per year
• Connecting Western European natural gas network
  with Russian gas reserves
• From Germany, natural gas can be transported to
  Denmark, the UK, the Netherlands, Belgium, France
  and other countries

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SIGNIFICANT CONTRIBUTION TO SECURITY OF SUPPLY
Additional gas imports needed
712 bcm
Import gap? 230 bcm
175
530 bcm
55
75
59
Imports
EU domestic gas production
2015
2005
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THE NEW SHAREHOLDER STRUCTURE

• Advantages of the new structure
• Operational and technical expertise of Gasunie in
  the construction and operation of pipelines
• Strengthening of wider European character of Nord
  Stream

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24,5 20
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24,5 20
Current
Future
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COMPLIANCE WITH INTERNATIONAL LEGAL FRAME

• United Nations Convention on the Law of the Sea
  (freedom of the high seas includes freedom to lay
  submarine cables and pipelines)
• Espoo Convention (international consultation
  process), Council Directive 97/11/EC of 3/3 1997
• European Directive on Environmental Impact
  Assessment
• Cooperation with the Helsinki Commission HELCOM

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STATUS OF INTERNATIONAL CONSULTION PROCESS
INVOLVING ALL BALTIC SEA STATES

• Consultation process started in April 2006
• Formal inter-governmental Notification in
  November 2006
• Regular meetings within the Espoo framework
• Updated status documentation delivered in October
  2007
• Distribution of draft transboundary EIA report to
  involved country authorities in December 2007
• Final transboundary EIA report currently being
  finalised

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NATIONAL APPROVAL PROCESSES

• Nord Stream is subject to national legislation in
  each of the countries through which it passes
  Finland, Sweden, Denmark and Germany (Parties of
  origin) and Russia
• Example of Sweden
• Submission of application documents to Swedish
  government on 21 December 2007
• First official response of Swedish government on
  12 February 2008 requesting additional
  information
• Submission of applications in Russia, Denmark,
  Germany and Finland to follow

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PIPELINE DESIGN

• Two pipelines, almost in parallel, with an inner
  diameter of 1,153 mm, and a design pressure of
  up to 220 bar
• Steel wall thickness in the range of 26.8 mm to
  41.0 mm
• Concrete coating with a thickness ranging between
  60 mm and 110 mm to give added weight sufficient
  to stabilize the pipeline on the seabed
• Midway service platform to facilitate pipeline
  maintenance and inspection by intelligent
  pigging

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ECONOMIC IMPACT FOR EUROPEAN SUBCONTRACTORS

• A great volume of business generated for various
  supplier companies all over Europe
• All contractors selected on the basis of
  competitive tenders
• Subcontractors for environmental studies and
  technical design
• Environmental Impact Assessment (EIA) prepared by
  Rambøll, Denmark
• Environmental studies carried out by Marin
  Mättinek (MMT), Sweden, and Institut für
  Angewandte Ökologie (IfAÖ), Germany
• Technical engineering conducted by Snamprogetti,
  Italy

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MAJOR SUPPLY CONTRACTS CONCLUDED

• Conclusion of supply contracts and Letters of
  Intent important steps towards efficient and
  timely project implementation
• Supply agreements are concluded for the first
  pipeline one million tons of steel pipes are
  ordered
• Europipe (Germany) to supply 75 order value
  1.2 bn EUR
• OMK (Russia) to supply 25 order value 0.4 bn
  EUR
• Further tender will be issued for 2nd pipeline
• Letter of intent has been signed with SAIPEM
  (Italy) for pipe-laying contract
• Letter of Intent for logistics (concrete coating,
  pipe storage, transport) due to be signed with
  EUPEC in March
• Locations Mukran (D), Kotka, Hanko (FIN), Slite
  and Karlshamn (SW)
• Order value ca. 650 mio EUR

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STRUCTURE OF FINANCING

• Financing structure
• 30 per cent of project costs by equity
  contributions from shareholders
• 70 per cent financed externally through limited
  recourse finance (lenders to be determined in the
  near future)
• Financial advisors chosen
• Société Générale
• ABN Amro
• Dresdner Kleinwort
• Currently, framework of bank participation is
  being prepared
• Support of export credit agencies also an option

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TIMEFRAME MEETS EUS NEEDS FOR GAS

• Key issues in 2008
• Detailed technical planning for construction work
• Completion of Environmental Impact Assessment
• Finalization of contracts for key investments
  (pipes, logistics, pipe lay)
• Determination of external project financing
• Ongoing dialogue with authorities in the Baltic
  Sea region

Commiss-ioning Line 1
Commiss-ioning Line 2
Feasibility Study
Conceptual Design
Detailed Design
Laying Line 1
Laying Line 2
EIA Approvals
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Contacts

• Nord Stream AG
• Grafenauweg 2
• 6304 Zug / Switzerland
• Phone [phone]
• www.nord-stream.com
• Paul Corcoran
• Financial Director
• paul.corcoran_at_nord-stream.com

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