1. Bulgartransgaz EAD: Perspectives for Investments and Developing of the Gas Infrastructure Southeast Europe Business Forum; 22 – 23 November 2012, Istanbul

2. Contents  Bulgartransgaz EAD overview  Gas Infrastructure on the Territory of Bulgaria – existing capacity  Capacity Expansion Plans During the period 2013 - 2017: - New gas pipeline interconnection Bulgaria-Romania - Interconnections with planned gas pipeline projects developed by other companies - New gas pipeline interconnection Bulgaria-Turkey – general benefits; advantages for Turkey and Bulgaria - Gas Storage Projects  Summary

3. Bulgartransgaz EAD overview Bulgartransgaz EAD is the Bulgarian combined gas operator, registered under this name on 15.01.2007 after the restructuring of former Bulgargaz EAD which is successor of the state company Oil and Gas, established in 1973. The company is the owner and operator of:  National gas transmission network for natural gas transportation to gas distribution companies and industrial gas consumers in Bulgaria  Transit gas transmission network for transit transmission of natural gas through the territory of Bulgaria between Rumania, Turkey, Greece and Macedonia.  Gas storage facility in Chiren (Chiren UGS)

4. Gas Infrastructure on the Territory of Bulgaria Existing Capacity National gas transmission network: – Pipelines’ total length: 1 700 km – Three compressor stations - total power of 49 MW – 8 GMS – 68 AGRS/GRS – Designed technical capacity of the grid - 8 bcm/y Transit gas transmission network: – Pipelines’ length: 945km. – Six compressor stations - total power of 240 МW – Designed technical capacity of the grid - 18,7 bcm/y Underground Gas Storage Chiren /UGS/ – 22 exploitation wells – Above ground technological installations including one compressor station of 10 МW power. – Working capacity of 0,5 bcm UGS

5. Capacity Expansion Plans During the Period 2013 - 2017  Development of new gas pipeline interconnections with neighbouring countries  Intersystem connections between the transmission network of Bulgartransgaz and gas pipeline projects developed by other companies  Construction of new gas pipeline branches of the existing gas transmission system  Expansion of gas storage capacity

6. Interconnection Bulgaria-Romania (IBR) – Pipeline route: Ruse – Giurgiu – Pipeline diameter: Dn 500 – Pipeline length: 25 km (15 km Bulgarian section) – Capacity: 0,5 - 1,5 bcm/y – Investment size: EUR 24 mln (EUR 13 mln for the Bulgarian section) – EU grant (EERP): EUR 9 mln of which EUR 4,3 for the Bulgarian section – Scheduled commissioning: May 2013

7. Interconnections with planned gas pipeline projects developed by other companies CONNECTION OF THE TRANSMISSION SYSTEM WITH THE SOUTH STREAM – New entry capacity: more than 21 bcm/y – Planned commissioning: 2016 CONNECTION OF THE TRANSMISSION SYSTEM WITH NABUCCO – New entry capacity: up to 4 bcm/y – Planned commissioning: 2017 NEW ENTRY-EXIT POINT OF THE BULGARIA-GREECE GAS INTERCONNECION (IGB) – Length: 180 km (  150 km on the territory of Bulgaria) – Capacity: 3 up to 5 bcm/y (in stages) – Investment size: EUR  200 million for the entire project (Grant – EERP) – Implemented by a joint investment company ICGB with shareholders Bulgarian Energy Holding EAD and IGI Poseidon – Planned commissioning: 2014

8. Interconnections with planned gas pipeline projects developed by other companies INTERCONNECTION BULGARIA-SERBIA (IBS) – Pipeline route: Sofia – Dimitrovgrad – Nis – Pipeline Diameter: Dn 700 – Length: 150 km (55 km Bulgarian section) – Pipeline Capacity: 1,8 bcm/y up to 5 bmc/y – Investment size (Grant OPRD): EUR 60 mln for the Bulgarian section – Completion: 2014 – Status: Feasibility study and pre-investment works (EIA, Routing, DZP) IBS is developed by MEET, beneficiary of OPRD, Bulgartransgaz EAD extends expert technical support.

9. Interconnection Turkey-Bulgaria (ITB) – Pipeline route in BG: Lozenetz – Malkochlar – Pipeline Diameter: Dn 700 - 1000 – Length: ~ 75 km Bulgarian section ~ 130 km Turkish section – Investment size: EUR 100 mln for the Bulgarian section – Pipeline capacity: 3-5 bcm/y – Completion: first phase – end of 2014 – Status: Feasibility study and pre-investment works

10. ITB is a key project which realisation shall lead to the increase of the security of supply and the opportunity for diversification of gas supply to Bulgaria, Balkans and South-Eastern Europe region, before the possible realisation of the gas pipelines TANAP and Nabucco-West and the start of the deliveries from the Shah Deniz – 2 field. General Benefits of ITB

11. ITB has significant impact on cross-border transmission capacity between Turkey and Bulgaria. During the first phase it could offer: - transmission capacity of 3-5 bcm/y in the direction from Turkey to Bulgaria (depending on the available seasonal capacity in the Turkish grid) - about 3 bcm/y in the direction from Bulgaria to Turkey (additional capacity to the existing transit capacity to Turkey). ITB contributes directly to the diversification of counterparts. The new counterparts could be LNG suppliers and Gas Traders dealing in the Balkan region. General Benefits of ITB

12. - ITB will provide an opportunity for reverse mode of work. Up to around 3 bcm/y could be provided additionally in the direction from Bulgaria to Turkey (in case of market needs) through the use of the available capacity of the national gas transmission system of Bulgartransgaz and gas sources of Russia or CEE gas market (via Bulgaria- Romania Interconnectors). - Opportunity for use of Chiren UGS available capacity which will increase the reliability and security of supply for Turkey in Istanbul region. - Opportunity for the Turkish gas traders to negotiate and deliver additional quantities of gas through the interconnection points and the network of Bulgartransgaz EAD. - Opportunity for additional income for Turkey from natural gas transmission from the existing entry points in the system of BOTA (cross-border and LNG terminals). Advantages of ITB for Turkey

13. Advantages of ITB for Bulgaria - ITB is of great significance for meeting the requirements of the Regulation for the security of gas deliveries, especially Gas Infrastructure Standard N-1. According to Article 6 of Regulation 994/2010: The competent authority of the respective member state (for Bulgaria - MEET) guarantees that all necessary measures are taken so that no later than 3 December 2014, in the event of a disruption of the single largest gas infrastructure, the capacity of the remaining infrastructure, determined by the N-1 formula, is able to deliver the quantities of gas needed to satisfy total gas demand of the calculated area. - Contributes to the liberalization of the gas market in Bulgaria and development of gas-to-gas competition. - The project will increase the flexibility of the gas transmission system. - Opportunity for added value for Bulgaria from delivery and transmission of natural gas from the existing and future entry points in the system of Bulgartransgaz.

14. Increase of current daily deliverability and working gas volume in UGS Chiren: Estimated investment size: EUR 200 mln Completion: 2014-2017 Status: Feasibility study New Gas Storage facilities Construction of new gas storage facility on the territory of Bulgaria. Gas Storage Capacity Expansion Макс.капацитетзадобиви нагнетяване Капацитет засъхранениенагаз настоящ4,2млн.куб.м./ден550млн.куб.м следразширение10млн.куб.м./ден1млрд.куб.м DeliverabilityWorking Gas volume current4,2mcm/d.550mcm. projected10 1bcm mcm/d.

15. SUMMARY: New Gas Infrastructure Investment Plans in Bulgaria 2013 - 2017 Gas Interconnections – New gas pipelines on the territory of Bulgaria 100 km. with a new capacity of 3,5 - 6,6 bcm/y Bulgartransgaz EAD investments: EUR 113 million New branches to the existing gas transmission infrastructure Total length: more than 270 km Total capacity: above 2,5 bcm Bulgartransgaz EAD investments: EUR 50 million Interconnections with planned gas pipeline projects : New capacity: 25-35 bcm/y Bulgartransgaz EAD investments: EUR 24 million UGS Chiren capacity expansion Additional storage capacity: from 550 mcm in 2012 to 1 000 mcm in 2017 and daily deliverability up to 10 mcm/d; Bulgartransgaz EAD investments: EUR 200 million Third Parties planned gas pipeline projects in Bulgaria: IBS, IGB, South Stream, Nabucco: Total pipelines: ~ 1 150 km. Total investments: ~ EUR 3,5 bln.

16. www.bulgartransgaz.bg hq@bulgartransgaz.bg Thank you for your attention!