Press Conference, June 6, 2017

ALEXANDER MEDVEDEV

Deputy Chairman of Management Committee, Gazprom

GAS EXPORT AND ENHANCING RELIABILITY OF GAS SUPPLY

TO EUROPE

Volume and average price* data of Gazprom Group gas

beyond former Soviet Union (FSU)** Volume and average price* data of Gazprom Group gas

in FSU

2

Net revenue* from gas sales beyond FSU Net revenue* from gas sales in FSU

* Inclusive of (excise tax and) customs duties

** Gas supplies, including LNG and auctioned gas, to foreign countries, except for FSU, under contracts of Gazprom Export and other Gazprom companies

GAS SALES BY GAZPROM GROUP

56.7 70.2 81.7

66.1 59.4 48.1 40.3 33.2 6,411 7,039 8,509 9,490 8,500 10,116

11,911 10,263

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016

RU

B/1

,000

m3

bln

m3

1,396 1,358

1,764 1,807

2,116 2,150

2,777 2,686

0

500

1000

1500

2000

2500

3000

2009 2010 2011 2012 2013 2014 2015 2016

RU

B b

ln

363 494

695 627 505 486 480

340

0

500

1000

1500

2000

2500

3000

2009 2010 2011 2012 2013 2014 2015 2016

RU

B b

ln

148.3 148.1 156.6 151.0 174.3

159.4 184.4

228.3

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

13,487 15,057

11,763

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016

RU

B/1

,000

m3

bln

m3

Poland, 11.1

France, 11.5

UK 17.9

Italy, 24.7

Turkey, 24.8

Germany, 49.8

3

GAZPROM GROUP’S GAS SALES BEYOND FSU (UNDER CONTRACTS OF GAZPROM EXPORT AND GAZPROM SCHWEIZ)

• Total sales in 2016 amounted to 179.3 bln m3

• Increase of 19.9 billion m3 (+12.5%) from previous year

• Major gas buyers in 2016 were Germany, Turkey, and Italy

bln m3

Moldova, 3.0

Kazakhstan, 4.7

Belarus, 18.3

4

Gazprom’s gas sales in FSU totaled 33.2 bln m3* in 2016

bln m3

* According to consolidated financial

statements of Gazprom prepared under IFRS

GAZPROM GROUP’S GAS SALES TO FSU IN 2016

5

PIVOTAL ROLE OF GAZPROM GROUP’S GAS IN

EUROPEAN MARKET

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

* Gas sales to European countries beyond FSU under contracts of Gazprom Export and GAZPROM Schweiz

** Difference between consumption and indigenous production

Gas supplies to Europe by major gas exporters and producers

in 2016, bln m3

Short-term forecasts for gas consumption from world’s

leading companies (consumption in 2012 = 100%)

100.0 99.7

89.6

93.5

99.9

85

90

95

100

105

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

%

Actual 2012-16 CERA (Oct. 2016)

CERA (March 2017) PIRA (Sept. 2016)

PIRA (March 2017) IEA (May 2015)

IEA (May 2016)

179.3

124.0

51.2 46.4 45.5 24.0

9.8 8.0

0

50

100

150

200

Gaz

prom

Gro

up*

Nor

way

Alg

eria

UK

Net

herla

nds

Qat

ar

Nig

eria

Iran

583 598 564 602 551 542 540 485 507 542

26% 27% 25% 23% 27% 26% 30% 30% 31% 33%

0100200300400500600700800900

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Gas consumption, bln m3 Gas sales by Gazprom Group*, bln m3

Gazprom Group's share*

271 273 257 280 274 248 255

225 240 273

56% 58% 55% 50% 55% 56% 64% 66% 66% 66%

0

100

200

300

400

500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Import needs, bln m3Gas sales by Gazprom Group*, bln m3Gazprom Group's* share

6

LOW COMMERCIAL ATTRACTIVENESS OF U.S. LNG

SUPPLIES TO EUROPE

In current

environment,

forward contract

prices at European

trading platforms do

not cover full cost of

future U.S. LNG

supplies linked to

Henry Hub prices

Estimated price range* for U.S. LNG supplies in 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

*** Historical data: Russian gas prices, including delivery, at German border (according to World Bank), projected data: based on current forward prices of

Brent and TTF

Sources: Bloomberg, Cheniere Energy, WoodMackenzie, World Bank

7

FORECASTED GROWTH IN GAS-FIRED

POWER GENERATION

Power industry shows highest growth rates 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

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

%

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

%

Prospects for gas demand increase in transportation

sector:

• Heavy-duty truck can consume up to 200–300 kg of

LNG daily

• Transportation company with 20–40 trucks consumes

several mln m3 of gas per year

• Europe’s demand for natural gas as vehicle fuel can

reach up to 27 billion m3 by 2025*

Between 2013 and 2016:

• Number of Gazprom Group’s gas filling stations in Europe increased from 23 to 69

• In 2016, Gazprom Group entered Serbia’s NGV market, with retail services offered

at two stations

• Gazprom’s supplies of CNG and LNG to its own and third-party gas filling stations

grew from 4.8 to 14.6 mln m3

• In collaboration with local companies, Gazprom NGV Europe (part of Gazprom

Group) implements Europe’s first projects for introducing LNG as vehicle fuel in

public bus transportation in Poland: 11 buses in Olsztyn and 35 buses in Warsaw

8

USE OF NATURAL GAS AS VEHICLE FUEL IN LONG TERM

* ACER (Agency for the Cooperation of Energy Regulators) forecast.

0

2

4

6

8

10

12

14

16

2013 2014 2015 2016

Serbia

Czech Republic

Poland

Germany

Gazprom’s sales of gas as vehicle fuel through its

own and third-party stations, mln m3/year

UNDERGROUND GAS STORAGE: ENSURING STABLE,

RELIABLE AND FLEXIBLE SUPPLIES

2016: development of Europe’s underground gas storage network

Rehden

Banatski Dvor

Katharina

Bergermeer

Haidach

Damborice

During 2016/2017 withdrawal season, Gazprom

operated 5 bln m3 of storage capacities in Europe.

Maximum daily deliverability of UGS facilities in

Western Europe was 83.3 mln m3 during

2016/2017 withdrawal season.

Katharina and Damborice UGS projects are in progress:

• Katharina UGS facility has 6 operational caverns with total working capacity of 315 mln m3 and maximum daily

deliverability of 23.2 mln m3. On April 1, 2017, UGS surface facilities were brought onstream.

• On July 1, 2016, Damborice UGS facility with design working capacity of 456 million m3 was put into operation in Czech

Republic. At present, Gazprom has access to 156 mln m3 of Damborice’s storage capacity, with maximum daily

deliverability standing at 3.7 mln m3.

9

NORD STREAM 2

10

• 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 to

deliver project

• Nord Stream 2 AG signed financing agreements

with ENGIE, OMV, Royal Dutch Shell, Uniper, and

Wintershall for Nord Stream 2 gas pipeline project

TURKSTREAM

11

• TurkStream is project for transit-free export gas pipeline

stretching across Black Sea from Russia to Turkey and

further to Turkey's border with neighboring countries

• First string (15.75 bln m3 in capacity) of gas pipeline is

intended for Turkish consumers, while second string (with

same capacity) will deliver gas to EU countries

• On October 10, 2016, Russian and Turkish Governments

signed Agreement on TurkStream project

• South Stream Transport B.V., wholly-owned subsidiary

of Gazprom, is responsible for construction of gas pipeline’s

offshore section

• On May 7, 2017, pipe-laying of TurkStream gas pipeline

started near Russian coast (Audacia vessel owned

by Allseas)

• Pioneering Spirit, world’s largest pipe-laying vessel, has

arrived in port of Anapa to build TurkStream pipeline in deep-

water area of Black Sea

• TurkStream is expected to come onstream before late 2019

THANK YOU FOR YOUR

ATTENTION!