EGYPT’SGAS MARKETDEVELOPMENT

Eng. Khaled AbubakrMiddle East & Africa Regional Coordinator, IGU

Chairman, Egyptian Gas AssociationChairman, TAQA Arabia

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Egypt’s Gas Industry Milestones

In 2014, Natural Gas share in Egypt total Energy Consumption: 52.5%

1st gasDiscovery

1967 1976 1981 1992 1996 2003 2012

1st

Industrialcustomer

1st

Residentialcustomer

1st CNG Vehicle

Private LDC

1st Gas Export

1st FSRUTender

2015

1st LNG import

Celebrating 40 years in 2016

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Gas Usages

Gas GridLocal Distribution

Gas Delivery

Fertilizers

Industry

CNG

Domestic

Power

Gas Value Chain in Egypt

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Accelerate Existing Gas Development

Total Investment: $21.8 bn Total Production: 3,600 MMSCFD Total Condensate Production: 86.7 MBBL/D

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East Med.: Major Fields

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Gas Transmission Grid , reached 40,000 km in 2016

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Abu sir

West Abu Qir

North Idku

RavenScrab/safron

LNGDamietta

Arish &El masaid

Baltem

Port said

Hap’y

Theka

North Bardwell

Akhen

Naf

Roseta

El Sheikh Zowayed

East Port Said P.S & Ind. Area

East Gas

Flower

North SinaiHelm

Temsah

Talkha

Shabshir

Abu MadiAbu Qir

Abu Hommos South El Mansoura

Mahmudiya

Qara

Tanta

SouthBelquas

Abu sultan6 October

QusinaBanhaSadat

Suez

A’youn Moussa

Mostorud I-A

Tebbin

Koraymat

Ras BakrBeni Suef

Za’frana

October

Unit 103El Menia

Assuit

Unit 104

Unit 108

Zeit bay

Abu Rudis

Morgan

Ramadan

Esma 8

AgibaSea bird

Shoab Ali

Badri

Esma 2

Sinai Cement & industrial Area

Sedi Krier

Ameriya

King

El-Max

Intergene

BorgElarab

Ameriya Cement

12“- 14 Km

El obyed

Salam

South Aum Barkah

El Qasr

Tarek

Bed - 2

Abu Sannan

South Dab’aaMeleha Deep

Bed - 3Bed - 1 265 Km 24“-

Qena

LuxorAswan

Kima

Hurgada

Safaga

Cairo

Neag

A/GHKaroun

SouthEl-Tina

WestEl Tena

Jordan

DeniseTaurt

El GamilUGDC

South El Manzala

Shams

Saffaire

Simian/ sienna

Fayroz

Robi

Tarouse

Theth Med. South East Fields

Vegas fields

Desouk

A/RSuco

Belayim

Wastani

Fayoum

El Sokhna

• Existing . PL• Under cons. PL• Future. PL (5 Years)• Gas fields• Future Gas Fields• Facilities• Distribution Stations• Power stations• Industrial Areas• Consumer• Distribution Co.• Export

Ameriya

24“- 26 Km

18“- 12 Km

16“- 9 Km

24“- 26 Km

24“- 26 Km

32“- 160 Km

24“- 14 Km

30“- 26 Km

22“- 87 Km

24“- 25 Km

32“- 75 Km

24“- 215 Km

32“- 85 Km

28“- 86 Km

42“- 40 Km

30“- 28 Km

16“- 256 Km

16“- 192 Km

24“- 10 Km

22“- 40 Km

24“- 50 Km

36“- 196 Km

36“- 264 Km10 BCMY

20“- 660 Km

20“- 40 Km

12“- 40 Km

National Oil, Gas Grid & Facilities

Dahshour

Nubariya

North Port Said

Port Fouad

Sharm El Shikh

Suco

West Aswan

Ras Shukir

El Fayoum Offtake

Deshna

Quos

New Assuit

Upper Egypt P/L930 km, 1 Billon $

Total Length is 18000 Km with Capacity of 190 MM meter3/D In June 2012

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East Med.: Infrastructure

Kills

DamiettaLNGIdku

LNG

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Amman

Aqaba

HomsBaniyas

Ashkelon

Aphrodite

Zohr

LeviathanTamar

Ceyhan

IzmirTo Bulgaria Ankara

Kayseri

AntalyaKilis

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• Secure LNG imports to bridge theshort/medium term gap.

Clients Benefits:

• Trough two FSRUs, one with a capacity of 3 BCMY, the other with capacity of 7 BCMY

• Both are located in Sokhna Port, Red Sea

FSRU:

Gap Supply

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Demand & Consumption Evolution

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Gas to end users

• FactoriesMedium Heavy

- Chemical - Steel- Paint - Cement- Textile - Fertilizer- Food

Fuels substitution & conversionWater heating Space heating

Cooking Steam Generation

Furnaces Manufacturing Process Heat

Refrigeration Gas-fired Air-conditioning

Natural gas will replace:

• Diesel for water and central heating

• LPG for heating and cooking

• Fuel oil and diesel for industrial applications

• Gasoline in cars

Residential

Commercial

Industrial

• Apartments• Houses• Villas

• Hospitals• Schools and Universities• Offices• Restaurants• Bakeries etc.

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Ensuring power generation security

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GASCO

Power Stations HouseholdsIndustrial

FactoriesCommercial

Establishments

EGAS

20-25Y Concession Agreement to :Finance, design, execute, operate& maintain Gas Networks

Manage, operate andmaintain the EgyptianNational Gas Grid

Transportation Vehicles

Gas Supply Contract

Agreement for :Gas Delivery & Metering

Gas Midstream & Downstream Market Structure

Gov. guarantees 18%IRR for LDCs (+ O&Mcosts +5Y tax exemption)

Local DistributionCompanies

EPCs

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Gas Distribution – Deregulation Development

The Main National Grid / Trunk line is constructed & Operated by GASCO (on behalf of EGAS)Everything down stream of the Pressure Reduction Station is within the cost of the LDC connection rate. Payments made “per converted customer”

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OverseasGas Maya Gas

Gas Contractor

LDC

Gas Distribution – Market Players

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From ONE state monopoly …

… to 14 private sectors & 5 state-owned LDCs/EPCs

Development of the Egyptian Gas Distribution Sector

Off Take

P.R.SRegulator

Regulator

Typical Downstream Gas Network

Ongoing Distribution ActivitiesApprox. 3.5 Million customers connected

Over 1 bn $ of Foreign & Local investment

16 Egyptian Governorates covered by Gas networks

600 MM $ /Year Saved in subsidies

Enhanced HSE Standards

Introducing new technologies

Attracting the Multi-Nationals

Social Investment – Jobs/Employment - Environmental

Provide a better quality of life for Egypt’s citizens

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Market based Incentives: CNG Smart Card

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Mechanism

Financing 100% of cost of conversion throughcommercial lending on a debit card to bepresented at fueling stations by convertedvehicles’ drivers

Increase

No. of Vehicles Converted

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CNG

LNG

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Gas CNG Mobile

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Scope:• Using absorption chillers / heater units• BOO District cooling projects• 250 000 Ton

Clients Benefits:• Saving of 30-40% of operating cost

compared to electricity driven chillers• Less building Capex & Opex• Less Power • Less maintenance & staffing• Economical operating costs• No chillers noise & vibration• Space saving in the buildings

District cooling consists of 3 main parts:

Plant

Gas District Cooling

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Synthetic Natural Gas (LPG+Air) Distribution Network

R

R

R

R

SNG StationLPG Tank

SNG =

LPG + Air

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SNG Ready to use

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Gas Regulatory Affairs

April 2016

25Gas Regulator Affairs, Consultation Event_27 Jan 2016

The Law will:

Regulate downstream gas activities.

Introduce Third Party Access principle (TPA).

Gradually open up the gas market and introduce competition.

Establish a Gas Regulator to monitor the functioning of the

new gas market.

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Scope of Application

26Gas Regulator Affairs, Consultation Event_27 Jan 2016 7

Shippers:(EGPC/EGAS, Shipper A, B, …)

Transmission System Operator “TSO”

Distribution Network Operators

Consumers

Gas Regulator

Suppliers:(EGPC/EGAS, Supplierr A, B, …)

New Gas Market Framework

Tran

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Tarif

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278

Establishmentof

GasRegApproval of Codes

Monitoring Gas Market

Disputes Settlement

Setting Tariff MethodologyCharacteristics

Establishment of Gas Reg (1/2)

Activities

Issuing of licensesEstablishment

ofGasReg

Gas Regulator Affairs, Consultation Event_27 Jan 2016

Neutral & transparent Independent Implementing

Authority

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TAQA Corporate Overview

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TAQA Arabia Group

62.5% 37.5%

Regional / Gulf Funds &

Co-investors

Paid-in capital is EGP 676 MMApproximatelyEGP 2.3 bn investments

23 companies acquired and incorporated

3,400 employees

Selling5.4 BCM of distributed gas

Supplies gas to around 600K customers

Gas EPC works for 1 MM customers

Manages gas concessions in 11 Egyptiangovernorates

580 MW of contracted distribution andgeneration capacity in addition to 376MW distribution O&M capacity

37 Oil & CNG fuel stations

Operations and previous experience in 7MENA region countries.

Facts & Figures Shareholding Structure

PowerGeneration & Distribution

FuelMarketing

GasDistribution EPC

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TAQA provide a full spectrum of energy

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TAQA Arabia Local Footprint

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Current FootprintEgyptQatar

Kurdistan, IraqSudan*Libya*UAE*

Jordan*

Pursuing OpportunitiesMozambique

KenyaTanzaniaRwandaZambia

UgandaGhana

* No current operations but have previous experience

TAQA’s Regional Presence

TAQA Arabia Group’s success hinges on a unique and highly defensive business model with a leading market position in Egypt with significant growth potential regionally…

TAQA Arabia Regional Footprint

TAQA’s Regional Gas Projects

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Vision To be the preferred regional energy services and solutions provider, and to become the key

player in the sustainable development and economical progress of MENA, Gulf and Africa.

Mission

To provide high quality services and products to meet the growing energy demands of theregion through our ethical practices and professional team in a way that would guaranteethe highest value for our customers and secure our growth and success and the highestreturn for our shareholders.

TAQA Arabia "One-Stop-Shop" Energy Solution

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Gas Sector Overview

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Damietta130,000

El-Sharqueyia144,000

Kafr El-Sheikh75,000

Suez150,000

Ras Ghareb4,500

Hurghada51,000

Fayoum65,000

Beni-Suef85,000

El-Menya86,000

Assiut114,000

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TAQA Gas – Technical Facts & Figures

PRMS156

SmallPRS382

Pipelines(meters)

2,950,000

External Installations

Pipelines(meters)

3,852,000

InternalInstallations

Pipelines(meters)

3,855,000

Water Heaters317,000

Connected Appliances1,000,000

Cookers650,000

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Operation & Maintenance:

HP Transmission Pipelines

MP/LP Distribution Networks

Tank System

24 /7 Emergency

Customers Invoices & Billing System

Customer Service

Gas Marketing

Technical Assistance for Industry and

touristic developments

TAQA Gas – O & M Services

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TAQA Gas - Natural Gas Commercial Applications

Offered Applications: Central Heating Pool water Heating Steam Generation for Laundry Conventional water Heaters &

Cookers

Central Water Heating SystemsPool Heating Systems

TAQA executed boilers &water heaters works formore than 1,500customers, includingresidential, commercial &touristic developments.

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Four Seasons Hotel – Cairo Radisson SAS Taba Hotel Modern English school New AUC Katameya Heights Resort Mirage City Resort Arabella Resort Beverly Hills Resort Al Nada Resort Al Karma Resort October Hills Resort Dream Land Resort

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TAQA Gas – Sample of our Commercial Customers

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TAQA Gas – QHSE

TAQA adopts a people, process and system approach toquality management. Our Quality Management andOccupational Health and Safety Management Systemshave been independently audited. TAQA construction andGas activities are an ISO 9001, 14001 & OHSAS 18001certified companies

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2 Simon Bolivar Sq, Garden City , 8th floor

Tel: (202) 2796 1494 Fax: (202) 27962821www.taqa.com.eg

THANK YOU