1. Does the gas exchange help improve competition in the retail market? Dansk Energi, 5th December 2012 Jacob Pedersen, CEO Nord Pool Gas A/S

2. Introducing Nord Pool Gas Company Background  Established in 2008, first trade March 4th  Strong ownership split between: -50% Energinet.dk - Danish system operator -50% Nord Pool Spot - Nordic Power exchange The exchange  Provide continues trading via the electronic trading system Trayport Global Vision  Physical trade in: Within day, Day ahead, Weekend, BOM, Month ahead and SWAP  Aim to promote further competition and deliver a market price reference Significant development  Strong growth journey. Now has a market share at 15-20% of the domestic demand Latest achievements  Improved clearing and settlement: Reduce the cost of trading  New products: Attract more liquidity and provide a market based balancing price  More trading opportunities: trading on 365 days, 24/7 trading in case of declared system crisis

3. Danish gas market and the competitive situation History of the Danish gas market  Early 1970’ties: First North Sea gas fields discovered  Early 1980’ties: Maersk sell all it’s gas production to state owned DONG via oil/coal indexed long term GSAs  1980’ties and 90’ties: Gas substitutes oil and coal for power and heat production. DONG on sell to customers on oil index in a monopoly regime  2004: Full market liberalization - Only one exit zone - Daily balancing - Low barriers to entry - Old GSAs still dominate - One supply source - System bottleneck

4. Traded volume at Nord Pool Gas Close to 5.9 TWh traded year on year 56% higher than same period 2011.

5. Number of trades at Nord Pool Gas More than 6,000 trades year on year – up 23% compared to the whole of 2011.

6. Number of trades at Nord Pool Gas The Day Ahead contract dominate the picture but Withinday and Weekend products attract ever more liquidity

7. Exchange volumes share of domestic market The average market share year on year 2012 amounts to 18%.

8. Trading at Nord Pool Gas Continues daily trading  Trading takes place from 09.00 to 15.00 every weekday and 11.30 to 12.30 on weekends and on holydays  Participants place orders (bids and asks) via the Trayport screen in a total of six different products.  Trading is anonymous. The Clearing House acts as the central counterparty on all deals to ensure physical delivery and payment. Pricing  By the end of each trading day Nord Pool Gas quotes closing prices for each product  The Closing prices are based on volume weighed average deal prices. In case no deals are conducted the closing price equals the mid price between the closing bid and ask Transparency  Closing prices and volume data are published on the Nord Pool Gas webpage  Closing prices offer a Nordic market price reference that can be used as a price index in wholesale and retail gas supply agreements  Since October 1 st 2011 Energinet.dk has used Nord Pool Gas prices to establish the system neutral price. From October 1 st 2012 the system neutral price will be established on a daily basis.

9. Market price development at Nord Pool Gas Nord Pool Gas pricing (virtual point: NPTF) is highly correlated to pricing at adjacent markets

10. Market price development at Nord Pool Gas Trend line indicates that the price spread towards Germany is gradually closing in 2011-2012: The spread has vanished the last 18 month and now tends to be negative 2008 – 2010: An immature and less competitive Danish market used to trade 1-2 EUR/MWh above the German markets

11. Market consentration at Nord Pool Gas Herfindahl index  Measure the level of concentration/competition by adding the squared market shares of individual participants  According to US antitrust: >18% concentrated / <18% moderate concentration / <10% non concentrated Herfindahl ave: 2009: 28 2010:18 2011:15 2012:13

12. Retail supply prices and Nord Pool Gas Customers urge for transparency  Customer often view oil indexation is a bit of a blackbox. Complicated oil indexed price formulas and volume restrictions hampers competition.  A Typical industrial  customer is small/midsized. And a typical purchase manager covers multiple product categories Insight and symmetry: … gives you a unique opportunity to follow the gas market closely without having to know all market details Improve competition: … enables you to compare supplier prices Validation and transparency: … outlines all payment details, even the suppliers mark-up Competitive market price: … ensures that you are always paying market reflective prices for your gas Relevant regional impact: … makes you less dependent on global market events in the e.g. USA or China independent on the US dollar exchange rate

13. Follow Nord Pool Gas at www.nordpoolgas.com More and frequently updated information can be found on: www.nordpoolgas.com Here you will be able to:  Observe daily prices and volume data  Download trade history in simple excel format  Subscribe to news and RSS feeds  Calculate prices based on Nord Pool Gas index