PART OF LIETUVOS ENERGIJA GROUP

DRUSKININKAI CASE MODEL –THE TURNING POINT FOR SMALL-SCALE LNG APPLICATION IN LITHUANIA

2

Power generation Renewables Distribution (DSO) Energy supply

Shared Services (IT, HR, Accounting, Procurement, Legal, Communication)

Lietuvos Energija (LE) Group structure

merger in 2019

3

COMPANIES

24 companiesin LE Group

24

1.3 BLN

1.6 M

18 TWh>4000

REVENUES

Revenues in 2018 –above EUR 1.3 billion

EMPLOYEES

We have more than 4000 employees

CLIENTS

More than 1.6 Mclients in Lithuania

ENERGY PORTFOLIO

1 TWh power production6 TWh power sales11 TWh natural gas sales

LE Group key figures 2018

Commercial activity:

SSLNG development

Regulated activity:

LNG for constant terminal operations

Offshore LNG (reloading)

Onshore LNG

(truck loadings)

Long-term contract with

Equinor ASA up to 2024

Master Trade Agreements with

12 global LNG suppliers

Other business areas

Designated supplier (10 years) –

entity of strategic importance to

national security

Commercial activity:

LNG trading

SPOT LNG

purchasesSPOT LNG sales

Commercial activity:

Gas supply and trading

Leading gas

supplier to

businesses

Leading gas

supplier to

households

Gas sales in other

Baltic countriesAnnual delivered volume 3.8 TWh

(4 LNG cargoes per year)

LET natural gas activities

4

Lithuanian natural gas consumption 2010 – 2018 (TWh)

17%

57% 49%39%

100%83%

43% 51%61%

0%

20%

40%

60%

80%

100%

2014 2015 2016 2017 2018

Pipeline gas

LNG

Lithuanian natural gas import structure 2014 – 2018 (%)

Natural gas market in Lithuania

31,8

35,1 34,2

2826,6 26,5

23,7 24,422,4

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015 2016 2017 2018

New opportunities for SSLNG development in Lithuania (onshore sales)

GWh

3,2

13,4 17 15,3

20

35

17,8

52,8

71

-

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

Export Local Total

2017 Q4 2018 2019 Q1

Off-grid market in Lithuania Alternatives of supply

II alt

5,0 mln. Eur.

2019m.

III alt

LNG re-gas unit

2018m.

I alt

4,6 mln. Eur.

2021m.

GIPL (Gas

Interconnection

Poland –

Lithuania)

DSO connected

DSO disconnected

Druskininkai – icebreaker in Lithuanian LNG re-gas market (first year of operations)

Before 2018 Status quo

Local grid (disconnected

from national distribution

system)

The only source of supply

(pipeline from the

Belarus)

High natural gas prices

(the highest in Lithuania)

1000 users disconnected

(by choice)

Temporary LNG re-gas

infrastructure well

established

Diversification of

sourcing settled

Security supply

implemented

2 800 household clients

8 business clients

New ones approaching

Permanent LNG

infrastructure being

accomplished at 2020 Q2

Free market competition

achieved

Natural gas prices for

households decreased by

double

Contagious example and

snowball effect in the market

(new LNG re-gas cases

established and developed)

The Plan: Sustainable value added services at a market

responsive pricing

The milieu The imperative The success

Supply and demand

Competitiveness

Legal environment

Additional resources

Supply efficiency

Operational flexibility

Technological capacity

Continuous enhancements

Reliability and sustainability

Value driven partnerships

Constant innovations

Customer a winner

Main benefits of SSLNG value chain the Baltic region

Clean fuel

Scalable projects

Market competition

Lower prices

Supply security

Availability and reach

Increased market reach and

regional exports

Higher usage of clean fuel

Market competition and

lower LNG prices