27 th –28 th March 2003 Rome energy Meeting Ali Hached Executive Vice President, Sonatrach Rome Energy Meeting Rome, 27 th –28 th March 2003 SONATRACH INTERNATIONAL DEVELOPMENT NATURAL GAS PROJECTS

27 th –28 th March 2003 Rome energy Meeting A NEW NATURAL GAS EXPORTS TARGET Sonatrach has set a new gas exports target of 85 Bcm/year by 2010, taking into account : - The renewal and increase of its gas reserves -The emergence of market opportunities as a result of a strong growth rate (World : 3.2%/year, Europe : 1.9%/year). -The strengthening of our activities abroad and the diversification of our portfolio

27 th –28 th March 2003 Rome energy Meeting A NEW NATURAL GAS EXPORTS TARGET According to SONATRACH medium term Business Plan, NG and LNG exports will respectively reach an annual growth rate of 4,8% and 4,4% during Annual growth rates of our exports

27 th –28 th March 2003 Rome energy Meeting Strengthening its presence on the entry points to Europe Extension of existing export gas pipeline capacity (Pedro Duran Farell, Enrico Matteï) New direct gas pipelines (Medgaz, Galsi) New regasification terminals (Reganosa, others in discussion) Downstream Integration Direct investments in power plants (Cogeneration, CCGT) Joint marketing companies Increasing shipping capacity Two cm-class ships and one cm-class ship to reach a total shipping capacity of more than 1 billion cm. SONATRACH NATURAL GAS STRATEGY

27 th –28 th March 2003 Rome energy Meeting 24 Bcm 32 Bcm MATTEI 8.5 Bcm FARREL 11.5 Bcm + 8 Bcm (2006) + 3 Bcm (2004) EXPANSION OF THE EXISTING PIPELINES CAPACITY Enrico Mattei (Former Transmed) Pedro Duran Farell (Former GME)

27 th –28 th March 2003 Rome energy Meeting MEDGAZ Direct line Algeria–Europe via Spain (8-10 Bcm/year, starting 2006) Partners : Sonatrach, Cepsa,BP, Endesa, Eni, GDF,TotalFinaElf NEW NATURAL GAS EXPORTS PIPELINES Beni Saf Hassi Rmel MOROCCO ALGERIA SPAIN C.d.Pescaia Olbia El Kala Hassi R'mel GALSI Direct line Algeria–Italy via Sardinia (8 Bcm/year, starting 2008) Partners : Sonatrach, Edison, Enelpower, Wintershall, EOS Energia

27 th –28 th March 2003 Rome energy Meeting Location : Mugardos Capacity : 2.5 to 5 Bcm/y Partners : Endesa, Union Fenosa, Tojeiro Group, Xunta de Galicia, Caixa de Galicia, Caixa Vigo, Banco Pastor Operating Company : REGANOSA REGASIFICATION TERMINAL - REGANOSA

27 th –28 th March 2003 Rome energy Meeting SONATRACH IN THE GAS DOWNSTREAM Participation in cogeneration units (Spain, Italy) Participation in CCGT plants (Spain, Italy…) Tolling (Italy, Spain,…) Export of power produced in Algeria (Italy, Spain,…)

27 th –28 th March 2003 Rome energy Meeting TOWARDS A GLOBAL LNG MARKET Costs reduction enables the development of new LNG projects Arbitrage opportunities for both buyer and seller Cooperation among suppliers (GECF)

27 th –28 th March 2003 Rome energy Meeting France Belgium USA Turkey Spain Slovenia Italy Portugal Greece Algeria 2% 89% 67% 21% 40% 35% 23% 25% Algerian natural gas share in gas imports 24% Tunisia 100% SONATRACH : A MAJOR NATURAL GAS SUPPLIER Natural gas exports : 60 Bcm 27 th –28 th March 2003 Rome energy Meeting

27 th –28 th March 2003 Rome energy Meeting A NEW LEGAL FRAMEWORK IN EUROPE Create disruption risks and weakens the supply chain Create risks on gas projects financing Delay new projects / create additional costs Create Instability and uncertainties for both producers and clients Affect the equilibrium of long term contracts EU wishes to set up a single and open gas market may :