Nord Stream – Current Status And Progress Achieved So Far Russian Economic and Financial Forum in SwitzerlandPaul Corcoran, Financial Director, Nord Stream AG – Zurich, 17 March 2008

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A NEW NATURAL GAS SUPPLY ROUTE FOR EUROPE

• 1,220-kilometre-long offshore natural gas pipeline across the Baltic Sea

• Two parallel pipelines with a total capacity of 55 bcm per year

• Connecting Western European natural gas network with Russian gas reserves

• From Germany, natural gas can be transported to Denmark, the UK, the Netherlands, Belgium, France and other countries

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~ 175

55

Import gap 230 bcm

Additional gasimports needed

Nord Stream

Domestic production Existing imports/agreementsAdditional gas import requirement

712 bcm

2015

530 bcm

2005

Imports75%

59%

EU domestic gas production

SIGNIFICANT CONTRIBUTION TO SECURITY OF SUPPLY

44

THE NEW SHAREHOLDER STRUCTURE

Current 51%

51%

24,5%

20%

-

9%

24,5%

20% Future

Advantages of the new structure

• Operational and technical expertise of Gasunie in the construction and operation of pipelines

• Strengthening of wider European character of Nord Stream

5

COMPLIANCE WITH INTERNATIONAL LEGAL FRAME

• United Nations Convention on the Law of the Sea (freedom of the high seas includes freedom to lay submarine cables and pipelines)

• Espoo Convention (international consultation process), Council Directive 97/11/EC of 3/3 1997

• European Directive on Environmental Impact Assessment

• Cooperation with the Helsinki Commission – HELCOM

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• Consultation process started in April 2006

• Formal inter-governmental Notification in November 2006

• Regular meetings within the Espoo framework

• Updated status documentation delivered in October 2007

• Distribution of draft transboundary EIA report to involved country authorities in December 2007

• Final transboundary EIA report currently being finalised

STATUS OF INTERNATIONAL CONSULTION PROCESS INVOLVING ALL BALTIC SEA STATES

7

NATIONAL APPROVAL PROCESSES

• Nord Stream is subject to national legislation in each of the countries through which it passes: Finland, Sweden, Denmark and Germany (‘Parties of origin’) and Russia

• Example of Sweden

• Submission of application documents to Swedish government on 21 December 2007

• First official response of Swedish government on 12 February 2008 requesting additional information

• Submission of applications in Russia, Denmark, Germany and Finland to follow

8

PIPELINE DESIGN

• Two pipelines, almost in parallel, with an inner diameter of 1,153 mm, and a design pressure of up to 220 bar

• Steel wall thickness in the range of 26.8 mm to 41.0 mm

• Concrete coating with a thickness ranging between 60 mm and 110 mm to give added weight sufficient to stabilize the pipeline on the seabed

• Midway service platform to facilitate pipeline maintenance and inspection by “intelligent pigging”

220 bar 100 bar

99

ECONOMIC IMPACT FOR EUROPEAN SUBCONTRACTORS

• A great volume of business generated for various supplier companies all over Europe

• All contractors selected on the basis of competitive tenders

• Subcontractors for environmental studies and technical design

• Environmental Impact Assessment (EIA) prepared by Rambøll, Denmark

• Environmental studies carried out by Marin Mättinek (MMT), Sweden, and Institut für Angewandte Ökologie (IfAÖ), Germany

• Technical engineering conducted by Snamprogetti, Italy

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MAJOR SUPPLY CONTRACTS CONCLUDED

• Conclusion of supply contracts and Letters of Intent important steps towards efficient and timely project implementation

• Supply agreements are concluded for the first pipeline: one million tons of steel pipes are ordered

• Europipe (Germany) to supply 75% – order value 1.2 bn EUR

• OMK (Russia) to supply 25% – order value 0.4 bn EUR

• Further tender will be issued for 2nd pipeline

• Letter of intent has been signed with SAIPEM (Italy) for pipe-laying contract

• Letter of Intent for logistics (concrete coating, pipe storage, transport) due to be signed with EUPEC in March

• Locations: Mukran (D), Kotka, Hanko (FIN), Slite and Karlshamn (SW)

• Order value ca. 650 mio EUR

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STRUCTURE OF FINANCING

• Financing structure

• 30 per cent of project costs by equity contributions from shareholders

• 70 per cent financed externally through limited recourse finance (lenders to be determined in the near future)

• Financial advisors chosen

• Société Générale

• ABN Amro

• Dresdner Kleinwort

• Currently, framework of bank participation is being prepared

• Support of export credit agencies also an option

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Feasibility Study

Conceptual Design

Detailed Design

Laying Line 1

Commiss-ioning Line 1

Commiss-ioning Line 2

Laying Line 2

EIA & Approvals

2011 20122009-20102005-20061997-1999 2006-2009 2011-20122007-2008

TIMEFRAME MEETS EU’S NEEDS FOR GAS

Key issues in 2008

• Detailed technical planning for construction work

• Completion of Environmental Impact Assessment

• Finalization of contracts for key investments (pipes, logistics, pipe lay)

• Determination of external project financing

• Ongoing dialogue with authorities in the Baltic Sea region

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Contacts

Nord Stream AG

Grafenauweg 2

6304 Zug / Switzerland

Phone: +41 (0) 41 766 91 91

www.nord-stream.com

Paul Corcoran

Financial Director

paul.corcoran@nord-stream.com