1 - Classification: Internal 2011-09-15

LNG MarketsMorten Nesvik, Project Leader Marketing - Processing - Renewable EnergyGdansk 3 September 2013

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1. Statoil’s LNG Portfolio

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Statoil LNG Portfolio

Snøhvit plant

• 2.4 bcma to Statoil Natural Gas (USA)

• 1.5 bcma to Iberdrola (Spain)

• 1 bcm to Petronas

• Design capacity: 4.3 mtpa (5.7 bcmpa)

• Recoverable reserves ~ 200 bcm gas

• Statoil’s share (incl. SDFI) 66.79%

• Subsea field development

• CO2 storage beneath the seabed

LNG sales contracts

• Arctic Princess 145 000 m3

• Arctic Discoverer 142 000 m3

• Arctic Voyager 142 000 m3

• Arctic Aurora 155 000 m3

Shipping portfolio

Regas Capacity • Cove Point (East Coast USA) Snøhvit

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Snøhvit Portfolio Optimisation• Deliveries to 14 countries

• Operations in both arctic and tropical climate

− Longest commercial LNG journey; 32 days to Tokyo Bay

− 38 days to South Korea via Cape

− Statoil’s shortest journey; 4 days to Isle of Grain (UK)

• Swap LNG cargoes for European pipeline portfolio

• Supplied from 6 countries

SnøhvitSales

SpotSources

TanzaniaSuccessful exploration

• Since February 2012, successfully completed five wells in 15 months

• Four discoveries: Zafarani-1, Lavani-1, Lavani-2 and Tangawizi-1

• Total in-place gas volumes: 400-500 bcm

• 5500 km2 3D seismic acquisition completed

• Maturing new prospects and will start a new drilling campaign fall 2013

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LNG in the maritime industryStatoil is a heavy user of the maritime industry.

• 160 vessels of 20 different types operated globally

• Transporting 3000 shiploads of hydrocarbons annually

Statoil is committed to the development of sustainable energy systems and technology.

Statoil has been a pioneer in LNG-fuelled vessels.

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Viking Energy (Photo: Eidesvik)

Stril Pioneer (Photo: Harald Valderhaus) Bit Viking (Photo: Tarbit Shippng AS)

Bergen Viking (Photo: Bergen Tankers)

2. Global LNG Supply and Demand Picture

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LNG Price Markersmonthly averages previous 20 months

Source: Waterborne

USD/ bbl USD/ MMBtu

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ICE Brent USD/bblNBP USD/MMBtuHH USD/MMBtu

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Phasing in New LNG Capacity

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Operational Angola LNG QCLNG PNG LNG

Gorgon DS LNG Sabine Pass Export Phase 1 Australia Pacific LNG

GLNG Wheatstone LNG Sabine Pass Export Phase 2 Ichthys

MLNG Train 9 Prelude FLNG PETRONAS FLNG 1 Freeport Export

Lake Charles Export Sabine Pass Export Phase 3 Qatari Megatrain Debottlenecking Freeport Expansion

Golden Pass LNG Kitimat LNG

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China: Three Gorges Dam

10 Source: CNN Money

• 2.3 km long, 32 generators, 10% of China’s power demand

• 22.5 GW capacity (~21.2 MMtpa LNG)

• Relocation of 1.3 million people; impacting 13 cities, 140 towns, 1352 villages, 657 factories & 30,000 hectares of cultivated land

• 14 year building period

China: Three Gorges Dam

11 Source: CNN Money

Rank Project Est cost Energy  Country1 Kashagan US 116 bn crude oil Kazakhstan2 Gorgon US 57 bn LNG Australia3 Ichthys US 43 bn LNG Australia4 Bovanenkovskoye US 41 bn natural gas Russia5 Australia Pacific US 37 bn LNG Australia6 Wheatstone US 35 bn LNG Australia7 Queensland Curtis US 34 bn LNG Australia8 Kearl US 33 bn crude oil Canada9 Gladstone LNG US 30 bn LNG Australia10 Three Gorges Dam US 28 bn Hydro power China

Rank Project Est cost Energy  Country1 Kashagan US 116 bn crude oil Kazakhstan2 Gorgon US 57 bn LNG Australia3 Ichthys US 43 bn LNG Australia4 Bovanenkovskoye US 41 bn natural gas Russia5 Australia Pacific US 37 bn LNG Australia6 Wheatstone US 35 bn LNG Australia7 Queensland Curtis US 34 bn LNG Australia8 Kearl US 33 bn crude oil Canada9 Gladstone LNG US 30 bn LNG Australia10 Three Gorges Dam US 28 bn Hydro power China

LNG Project Break-even PriceRegional averages, FOB Plant

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Simple average of project break-even prices (netted for liquids income)

Source: Wood Mackenzie

o Snøhvit

LNG Trade Movements Post-Fukushima

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-68% -22% +25%

Demand for Natural Gas(pipeline and LNG)

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Gas Demand by Region

North America

Europe

China

Asia Pacific (excl.China)FSU

Middle East

Latin America

Africa

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Gas Demand by Sector

ResCom

Industrial

Power

Other

LNG Marine Bunkers

Source: IEA; Wood Mackenzie

Global LNG Market Balance Going Forward

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LNG Supply(bcma)

West AfricaSouth AmericaSouth & East AfricaNorth AmericaNorth AfricaMiddle EastEuropeAsia Pacific

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LNG Demand(bcma)South America

North America

North Africa

Middle East

Europe

Asia Pacific

Source: Wood Mackenzie

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Risks & UncertaintiesFuture ofnuclear(Asia)

Asian GDP and demand

growth

Shale gas development

North America LNG

exportsNew demand

for LNG

Pricing ofLNG

Northern Sea Route

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Thank you

US supportive of LNG, but approval process is arduous; government may change course

The road to permittingLNG exports

Department of Energy

Export to FTAcountries:

Little wait for approval, usually “rubber stamped”

Export to non-FTAcountries:

Longer review time, approval considered in “national interest”

Federal Energy Regulatory Commission

1) Pre-filing review

2) Application review

3) Post-application authorization

4) Authorization to begin operation

Policy steps to futureLNG export permitting

DoE approval for LNG export to non-FTA countries is considered according to:- Domestic need for gas / U.S. supply security- Impact on job creation & GDP- Impact on domestic natural gas prices- Balance of trade issues

Two studies commissioned by DoE to evaluate impact of exports per above criteria- Will there be a threshold at which next project is no longer in “national interest”?

Currently four applications sitting with DoE for export to non-FTA countries

- Total exportable amount in applications plus 2.2 BcF/d from Sabine Pass = 6.6 BcF/d or 10% of U.S. daily domestic production

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LNG IN NORTH AMERICA

Source: US government websites; media reports

US LNG export plants operating or being developed (1 of 2)

Note: 1 Freeport LNG are ConocoPhillips, Dow and Macquarie; capacity holders’ shares shown in parenthesis refers to import capacitySource: US DOE; Energy Intelligence; Center for LNG; Wood Mackenzie; press releases; media reports

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Location Owners Capacity holders Capacity Status Notes

Sabine Pass(Gulf Coast)

100% 3.5 mtpa 3.5 mtpa

9 mtpaAwaiting FERC

approval(operation from 2015)

• Authorised to export 16 mtpa to non-FTA countries• 20-yr deals for 3.5 mtpa each to BG and Gas

Natural Fenosa; MOUs for 7.7 mtpa• $3.9B EPC contract awarded to Bechtel in Nov 11

Freeport(Gulf Coast)

100%14.5 mtpa 1.4 mtpa

2.7 mtpa 0.4 mtpa

9 mtpa

Awaiting FERC and non-FTA export

approvals(operation from 2015)

• Authorised to export 10 mtpa to FTA countries• Macquarie to market 50% of capacity, other regas

customers to be offered right of first refusal on remaining 50%

Lake Charles(Gulf Coast)

100% (100%)

19 mtpa

Awaiting FERC and non-FTA export

approvals(operation from 2018)

• Authorised to export 15 mtpa to FTA countries• BG has stated it still wants to export 14 mtpa from

Lake Charles in-spite of the Sabine Pass deal

Cove Point(East Coast)

100% (68%) (16%) (16%)

7.7 mtpaAwaiting FERC and

FTA export approvals(operation from 2015)

• Already has small liquefaction unit• Submitted re-export request to DOE in Aug and

FTA export request for 7 mtpa in Sep 2011

Hackberry(Gulf Coast)

100% (60%) (40%)

3.25 mtpa Awaiting export approvals

• 2-year DOE re-export authorisation from Feb 2011• Requested DOE approval for 12- mtpa FTA export

in Nov 2011• In talks with counter-parties to agree contracts

Valdez(Alaska)

? ?

Unknown Unknown

• Would export gas from North Slope• Alaska government is keen to support LNG export• Exxon and TransCanada surveyed prospective

customers in 2010; results unknown

Modultransport

Hammerfest LNG – field development concept

New technology on several areas:

Overtrawlable subsea templates

Remote operation of subsea system

143 km multiphase pipeline to shore

No toxic discharges to sea

Onshore gas processing and liquefaction

The world’s most energy-efficient LNG-plant

Re-injection of carbon dioxide (CO2)

Products: LNG, LPG and CondensateTankers export gas to markets

Classification: Ekstern 2013-08-27

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Winterisation challengesWinterisation features Statoil LNG Carriers

• Arctic Discoverer, Arctic Voyager & Arctic Princess

• Enclosed bridge wings

• Heat tracing of

− main passage ways

− exposed emergency escape routes

− emergency escape openings (weather doors and hatches)

− fire fighting equipment (monitors and nozzles)

− wheel house and cargo control room windows

• Exposed navigational equipment

− mooring areas

− air intakes for engine room, air conditioning system, cargo machinery room and emergency generator room

• Windlass and mooring winches using hydraulic oil of ‘low temperature type’.

Snøhvit

Classification: Ekstern 2013-08-27

Albatross

Production wells

CDU

Plem

Production wells

Production wells

Snøhvit

CO2 Injection well

Slug catcherInlet facilities

Pre-treatment

Fractionation

Carbon dioxide

MEGrecovery

Condensate production

LPG production

LNG productionLiquefaction cycle Subcooling cycle

Storage and loading:LNG, LPG, condensate

Precooling cycle

200-260 bar65-90 C

~1 MSm3/d = 2100 t/d4 C, 150 bar

Feed-gas21,6 MSm3/d-1 C, 70-75 bar

CO2 + H2O + Hg

< 0,1 mg/Sm3 H2O< 10 ng/Sm3 Hg< 50 ppm w CO2

C1 C2 C3

C4 < 2,5 w%

C3+C4

< 50 ppm (wt) H2O< 100 ppm (mol) H2S

CO2 treatmentSNØHVITSimplified overview