Natural Gas:situationobjectivesopportunities

6 November 2015

Index

Situation Natural Gas 2015

Endesa Natural Gas

Opportunities

‣ Maritime Transport

ENDESA Figures

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XVII JORNADAS DE DIRECTIVOS DG COMERCIALIZACIÓN

Natural Gas Main business and opportunity

For Endesa, natural gas is more than simply an opportunity:

importantopen market

Contrasted experiences (in tariffs: Indexed products, projects and applications…)

investmentAccess to gas

new market segments in different countries

new uses

integratedmanagement

Mercado mixto

Mercado liberalizado

Mercado regulado

Fuentes: BP, Statistical Review of World Energy 2015

USAImport: 43Export: 76Consump.: 762

Northern EuropeImport: 153Export: 172Consump.: 191

RussiaImport: 24Export: 202Consump.: 401

Korea/JapanConsump.: 172

AustraliaImport: 6Export: 32Consump.: 29

AfricaImport: 9Export: 83Consump.: 128

Middle EastImport: 33Export: 161Consump.: 473

South EuropeImport: 121Export: 8Consump.: 120

LatamImport: 39Export: 43Consump.: 171

MexicoImport: 30Consump.: 88

Uds. en BCM

IndiaImport: 37Consump.: 50

ChinaImport: 169Consump.: 186

Global market…Different liberalization

Chile, Brazil,

Argentina

EUROPENBP, TTF, PEG, PSV

Middle East

Australia

CHINA

Sources: Platts, ICIS Global LNG Markets

10 €/MWh

23 €/MWh

27 €/MWh

Korea/Japan

27 €/MWh

28 €/MWh

26 €/MWh

25 €/MWh

…Local marketsAccording to transport capacity

USAHenry Hub

FOB LNG Prices (€/MWh)

CIF LNG Prices (€/MWh)

NG Hub Prices (€/MWh)

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Prices in Europe tend to

converge towards TTF…

• Regulation pressure towards more transparent markets

• Increase in access and availability in interconexions

• New interconnection projects in Europe

… with pressure from supply and demand…

• Demand in a standstill

• Plans for efficiency and carbon reduction (industry relocation)

• More gas availability, more production and liquifaction capacity

… but Iberia is different for its own market characteristics

October 2015Period: Cal-16

PEG: 18,6

Zee: 18,6

TTF: 18,5

NBP: 18,8

NCG:18,8

19,3

In EuropeExcess of supply, low demand increase

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MarketCharacteristics

LNG relevance

Competitive pricereference

Interconnection vs demand

Market liquidity, balancing

Regulated tariffs

Futures marketdevelopmento

Ease to getwholesaler gas

Spain France Italy Germany Netherlands UK

TTF

SpainCharacteristics

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Convergence to a unique market

Inte

rco

nn

ecti

on

ca

pac

ity

Potencial of LNG in end consumptionHighLox

Lo

wH

igh

Only actors with geografical diversity…

Endesa’s presence

•AOC

Interconnection

LNG

•PEGs

•TTF

LNG and NG

2016-20

•NCG•NBP

• Main way to supply de new demand; before NG (IEA Medium term gas market report)

• New production in Australia and USA increases diversity, flexibility and estability.• 203 bcm regasification capacity, with usage ratio below 20%

• Iberia has 8 regasification plants (70 bcm), nearly half of continental Europe.

Increase of LNG in EuropeSituation and infrastructure

• Gas ENEL Business (bcm/year))

Business 2015:27.8 bcm(300 TWh)

• Comparative chart (bcm/year)

• LNG vs Pipeline • Enel LNG

27%

73%

LNG

126 loads / year

27.8 25.7

61.4

36.524.5

ENELPortfolio

Consumption Spain

Consumption Italy

Production UK

Import LNG China

Enel, a global playerVolume and competitive and flexible contracts

4.6

6.2

4.6

8.0

4.4

Iberia Italy Latam

Russia Other

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A LNG market that establishes the marginal price A LNG market that establishes the marginal price

Gas prices linked to crude oil

Gas prices linked to crude oil

Slightly increased but

constant demand (NGV transport, bunker, …)

together with efficiency programmes

Slightly increased but

constant demand (NGV transport, bunker, …)

together with efficiency programmes

Greater integration in Europe

Development of a regulated market

Construction of transport infrastructure (Midcat and south of France network +2020)

Greater integration in Europe

Development of a regulated market

Construction of transport infrastructure (Midcat and south of France network +2020)

Market in SpainMature but with growth possibilities

Despite the reduction in demand in 2014, Endesa’s share in the conventional market increased by 18.7% in 2014.

• Conventional demand declined in 2014 as a result of the drop in cogeneration and a mild winter.

• Sustained growth in sales by Endesa in Spain doubling the market shareof other suppliers.

• Endesa’s growth was strong in 2015-2016 in Portugal and France

Endesa, second largest operator

* Sources: Sedigas, Enagas and Own research

Cogeneration and

Temperature effect

Conventional demand in Spain

Customer-oriented growth strategy

A competitive gas supply enables us to be the second largest player in the Iberian market

ENDESA

Algeria LNG

Nigeria LNG

Qatar LNG

Algeria LNG

Others LNG

USA LNG

GrowthEndesa’s strategic priority

MARITIME TRANSPORT

A high energy efficiency solution, greater respect for the environment and cost-savings for your company

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World map with maritime routes obtained with AIS data (Automatic Information System)

Privileged position

SCRUBBER

LOW SULPHUR

FUEL

:

:

.

ALTERNATIVE FUELS

AlternativesCompliance with regulations

Supply technologiesLiquefied natural gas

(LNG)

Evaporation at room temperature

LNG Storage

-160 ºC, 4 bar(Regasification or

port plant)

Transportable tank Truck Supply ship On-board

injection

Alternatives

:

Applicable to…

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Applications

Other servicesPort applications

¿Why Endesa?

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Integrate value Specialist sales Financing

Endesa Energía, S.A.U.

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