JANAF Workshop Flexibility of JANAF transportation system capacities Željko Skodlar, JANAF, Commercial Division ZAGREB, 24 March 2015

INTRODUCTION JANAF’s 40th anniversary, 9 September 1974 – Construction contract for use of JUNA First tanker – September 1979 Substantial experience on viability NO unresolved situation, NO stoppage, NO accidents

JANAF - in general JANAF – international oil pipeline for supply of refineries in South Eastern and Central Europe JANAF system consists of: 622 km long pipeline • Omišalj Terminal • Sisak Terminal • Virje Terminal • Slavonski Brod Terminal • JANAF-Žitnjak, Zagreb – Petroleum Products Terminal Activities: - Pipeline transport of crude oil: 43% for local users and 57% for foreign users Storage of crude oil and petroleum products (37,5% of total revenues in 2010) 1979-2015 total transported quantities - 200 mil.t (in a day or two) NEWLY CONSTRUCTED: 8 storage tanks for crude oil, each of 80.000 m3, with total capacity of 640.000 m3 with related infrastructure and for purposes of national compulsory stocks, reversible transport and commercial storage Ownership: AUDIO/HZMO 37,259%, HANDA 26,28%, INA 11,795%, AUDIO/RH 10,665%, HEP 5,357%, AUDIO/DAB 4,305% and small shareholders and funds Number of employees – up to 400

JANAF’s System From the sea to inland ADRIATIC SEA

JANAF in figures

CAPACITIES, DESIGNED AND RESERVED 1974 (MTA) JANAF capacities - 1979   CAPACITIES, DESIGNED AND RESERVED 1974 (MTA) INA-REFINERY SISAK 8,00 INA-REFINERY RIJEKA ... REFINERY LENDAVA, SLOVENIA 2,00 REFINERY BROD, BOSNIA AND HERZEGOVINA 5,00 NIS, SERBIA 9,00 TRANSIT, HUNGARY, SLOVAKIA 10,00 TOTAL DESIGNED CAPACITY 34,00 INSTALLED CAPACITY 20,00 6

JANAF development phases in past 40 years 1979-1980: beginnings and start-up From the beginning readiness for adjustment to market requirements of clients 1981: Hungarian and Czechoslovakian withdrawal due to Druzhba orientation 1985: Inclusion of north branch, bidirectional (reversal flow) operation on Virje-Sisak section 1990: Hungarian and Czechoslovakian returning to supply via Omišalj as alternative to Druzhba Peak in 1991: expected transport of 12 million tons; 16 September - interruption of transport; realized transport up to then 8,7 million tons 1991-1995: war circumstances, orientation toward storage Since 1995: normalization of oil pipeline operation, overview per years Extension of acitivities to crude oil and petroleum products storage and revenues towards 70/30% today Construction of new storage tank farms at Sisak, Omišalj, Žitnjak 2013: reinclusion of MOL in south supply route, with bidirectional operation on Virje-Sisak section 2015 and afterward: MOL and expected inclusion of Slovnaft refinery into supply process through Omišalj Ukrainian crisis and JANAF increasing role in European security of crude oil supply by 2030

JANAF’s 40 years in chart 2,7 t/year JANAF in 1991 2,7 milijuna tona per yar

JANAF, 1975. and 40 years later JANAF increasing role in European security of crude oil supply by 2030 The diversification crude oil sources and a possibility for partial replacement optimizing the crude oil pool in Central and Eastern Europe

EU aim to realize “Central Eastern European Oil Pipeline Ring" by establishing links between the North and South Druzhba, both in the West and East as follows: New pipelines to connect the North and the South branch of the Druzhba (1 and 2): 1. Construction of the pipeline between the refineries in Litvinov (CZ) and Spergau (DE) 2. Construction of the pipeline between Adamowao (PL) and Brody (UA) Pipeline to enforce the link between from the Baltic Sea to the Northern Druzhba (3): 3. Construction of the second line of the Pomeraninan pipeline (PL) from Gdansk to the Plock refinery Pipelines to enforce the existing links/establish a new link from the Adriatic Sea to the Southern Druzhba (4 and 5): 4. Reconstruction /upgrade/maintenance and capacity increase of JANAF and Adria pipelines 5. BSP - Bratislava Schwechat Pipeline

Energy Infrastructure Package for Europe (Source :Study on the technical aspects of variable use of oil pipelines coming into the EU from third countries; Purvin&Gertz)

European oil pipelines system and supply routes around JANAF ADRIA JANAF PRESSURE ON TAL - 105 % CAPACITY

JANAF, 1975. and 40 years later Yes, we can do it NOW ! JANAF increasing role in European security of crude oil supply by 2030 The diversification crude oil sources and a possibility for partial replacement optimizing the crude oil pool in Central and Eastern Europe Yes, we can do it NOW !

JANAF capacities - 2015 CAPACITIES, 2015 (MTA) INA-REFINERY RIJEKA   CAPACITIES, 2015 (MTA) INA-REFINERY RIJEKA 7,00 INA-REFINERY SISAK 8,00 OPTIMA, BROD, NIS, SERBIA 14,00 TRANSIT, HUNGARY, SLOVAKIA DESIGNED CAPACITY, OMIŠALJ-SISAK PIPELINE 34,00 JANAF INSTALLED CAPACITY 20,00 + 14

CAPACITIES OF JANAF PIPLINE SECTIONS Omišalj-Sisak: 34 mil. t Sisak-East: 14 mil. t Sisak-North: 14 mil. t

Competitive routes Data based on information obtained from publicly available sources. Not the companies official ones.

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