1. Shell Exploration & Production Copyright: Shell Exploration & Production Ltd. 7/17/2014 Gas Storage: a Flexibility Instrument supporting Security of Supply Lex Huurdeman Manager Regulatory Affairs & Commercial Strategy - Europe

2. 2 Current trends in Europe that impact gas storage investments… Increasing gas import dependence Liberalising markets Supply disruptions Recession

3. 3 Indigenous production will continue to play a major role but needs an enabling framework Access to resources Competitive fiscal and regulatory regime Streamlined permitting procedures Liberalised gas market Onshore areas with restricted access Schagen Waddenzee Biesbosch IJsselmeer & Markerwaard Groningen Compressor Station Source: provincies Groningen, Friesland, Drenthe, Overijssel, Gelderland, Flevoland, Noord-Holland, Zuid-Holland, Utrecht, Zeeland, Noord-Brabant, Limburg; DLG Groningen; Expertise Centrum Ministerie van LNV; Ministerie van Defensie; Rijksdienst voor het Oudheidkundig Bodemonderzoek (ROB); Rijkswaterstaat; International Maritime Organization (IMO); Centraal Bureau voor de Statistiek (CBS).

4. 4 Import Routes Nigeria LNG Algeria Norway Libya Egypt 48 Tcm 30 Tcm Qatar Iran Iraq Russia Caspian 9 Tcm Source: OGP Diversity of supply and supply routes is security of supply

5. 5 Gas Storage as Flexibility Instrument Physical flexibility instruments compete with virtual ones Regulation should be market- driven Regulatory framework needs to attract investments Maintain level playing field in a competitive flexibility market

6. 6 A Strategic Role for Gas Storage? Commercial flexibility services can deal with most disruption scenarios Public Service Obligations when deemed unavoidable for specific exposures Impact on commercial playing field should be minimal PSO holders purchase flexibility services on the open market