IRAN-TURKEY-EUROPE NATURAL GAS PIPELINE PROJECT

“The pipe diameter of Turkey section of IRAN – TURKEY – EUROPE Natural Gas Pipeline (ITE) is 56 inches and the operating pressure is maximum 92 bars. The envisaged operating life of the project is 50 years. Turang Transit Taşımacılık A.Ş. is currently continuing its intensive works to complete the engineering services of ITE Project and to start the construction process in 2017.”

2

IRAN - TURKEY - EUROPE NATURAL GAS PIPELINE (ITE) PROJECT

3

With Iran - Turkey- Europe Natural Gas Pipeline (ITE) Project, it is aimed to transport the Iranian and Turkmenistan-origin natural gas via Turkey to Europe. For transit passage of Iranian natural gas via Turkey, the Ministry of Oil of the Islamic Republicof Iran and the Ministry of Energy and Natural Resources of the Republic of Turkey signed a "Memorandum of Agreement" on 17 November 2008 for the transit passage of Iranian natural gas via Turkey.

The agreement on the project, which started in August 2011, provides that Turkey can provide gas from the pipeline when it needs gas. The length of the pipeline is approximately 5,000 km. The length of the pipeline within the territories of Turkey is 1,789 km.

As per the project, the quantity of gas to be transported to Europe annually has been determined as 35 billion cubic meters. Turang Transit

Taşımacılık A.Ş. has obtained the "Natural Gas Pipeline Certificate", with concession no. BB/TRG/4476, valid for 30+20 years, by the decree of the Council of Ministers, dated 26.08.2010 and no. 2010/882, as per the articles 6 and 83 of the Petroleum Law, to build the section of the pipeline between the borderline of Iran Bazargan, Doğubeyazıt Turkey and the borderline of İpsala Edirne I Greece for transportation of the Iranian and Turkmenistan-origin natural gas via Turkey as far as Germany. Turkey section of ITE Natural Gas Pipeline Project will begin from the borderline of Turkey / Iran, and pass through the provinces of Doğubeyazıt/Ağrı, Erzurum, Erzincan, Gümüşhane, Sivas, Yozgat, Kırşehir, Kırıkkale, Ankara, Eskişehir, Bilecik, Kütahya, Bursa, Balıkesir, Çanakkale, Tekirdağ, İpsala/Edirne and terminate on the borderline with Greece.

REPUBLIC OF TURKEY MINISTRY OF ENERGY ANDNATURAL RESOURCES

GENERAL DIRECTORATE OF PETROLEUM AFFAIRS

Italy

Switzerland France

Germany

Czech Republic

Austria

Greece

Albania

4

TECHNICAL DATA OF IRAN - TURKEY - EUROPENATURAL GAS PIPELINE (ITE)

Turkey

Iran

Transportation and Transfer Capacity: 35 billion m3/year Daily Transfer Capacity: 100 million m3/day Availability: 98.7 %Plan/Design Factor: (as per ASME B31.8) System Design Pressure: 96.5 barg

Pressure of the Pipeline (Max): 92 barg Distance Between the Pump Stations: ~220-300 km Inlet Pressure: ~45 barg Outlet Pressure: ~92 barg Design/Diameter of the Line Pipe: API 5L X 70 I 56"

5

GENERAL INFORMATION ABOUT THE PIPELINE ROUTE

LegendITE Route Compressor Station – Pig Metering Station – Pig Pig Station

6

Number of Countries through which the Pipeline passes: 5

Length of the Route; Option I Route: 5,520 km Option II Route: 5,180 km Section within Turkey: 1,789 km

Date of Commencement of the Project: August 2011 Date of Commencement of Construction of the Pipeline: 2017

Duration of Construction: 3 years

Pipeline Permanent Easement; Corridor Width: 7.75 + 7.75 = 15.50 m

Pipeline Temporary Easement; Construction Corridor Width : 4.25+16.25=20.50 m

Pipeline Construction Corridor; Corridor Width : 12+24=36 m

(Data pertaining to the temporary easement corridor of 36 m)

7

Number of provinces through which thepipeline passes: 17

Number of sub-provinces: 62

Number of Parcels: 596

Number of Parcels:

Persons: 17,344 Total: 23,276

Owners: 55,551

Pipe Diameter: Terrastrial 56", Çanakkale Crossing 2X36"

Length of Line: Total 1,789 Km

Point of Entrance of thePipeline into Turkey: Doğubeyazıt, Gürbulak/Ağrı at Iran border

Point of Exit of the Pipeline from Turkey: İpsala/Edirne at Greece border

GENERAL INFORMATION ABOUT THE TURKISH SECTION OF THE PIPELINE

8

SETTLEMENT AREAS THROUGH WHICH ITE PIPELINE PASSES (The pipeline passes through 17 provinces, 62 sub-provinces and 596 villages)

DOĞUBAYAZIT

DİYADİN

TAŞLIÇAY

MERKEZ

ELEŞKİRT

KARAYAZI

HORASAN

KÖPRÜKÖY

PASİNLER

YAKUTİYE

AZİZİYE

AŞKALE

TERCAN

ÇAYIRLI

MERKEZ

REFAHİYE

KELKİT

GÖLOVA

AKINCILAR

SUŞEHRİ

İMRANLI

ZARA

HAFİK

MERKEZ

ULAŞ

ŞARKIŞLA

AKDAĞMADENİ

SARAYKENT

SARIKAYA

SORGUN

MERKEZ

YERKÖY

AĞRI

ERZURUM

ERZİNCAN

GÜMÜŞHANE

SİVAS

YOZGAT

21

7

10

15

19

1

8

5

16

8

8

12

10

14

1

18

14

7

5

4

11

8

6

26

1

16

14

5

5

11

8

9

63

19

22

39

59

3

24

20

38

19

27

41

34

44

3

51

59

13

21

3

37

33

23

56

3

51

60

9

15

30

31

30

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

PROVINCES SUB-PROVINCES VILLAGES KM

ÇİÇEKDAĞ

AKÇAKENT

KESKİN

KARAKEÇİLİ

BALA

GÖLBAŞI

HAYMANA

POLATLI

GÜNYÜZÜ

SİVRİHİSAR

MAHMUDİYE

ODUNPAZARI

SEYİTGAZİ

TEPEBAŞI

İNÖNÜ

BOZÜYÜK

DOMANİÇ

TAVŞANLI

HARMANCIK

BÜYÜKORHAN

ORHANELİ

MUSTAFAKEMALPAŞA

SUSURLUK

GÖNEN

MANYAS

BİGA

GELİBOLU

ŞARKÖY

KEŞAN

İPSALA

9

ÇİÇEKDAĞ

AKÇAKENT

KESKİN

KARAKEÇİLİ

BALA

GÖLBAŞI

HAYMANA

POLATLI

GÜNYÜZÜ

SİVRİHİSAR

MAHMUDİYE

ODUNPAZARI

SEYİTGAZİ

TEPEBAŞI

İNÖNÜ

BOZÜYÜK

DOMANİÇ

TAVŞANLI

HARMANCIK

BÜYÜKORHAN

ORHANELİ

MUSTAFAKEMALPAŞA

SUSURLUK

GÖNEN

MANYAS

BİGA

GELİBOLU

ŞARKÖY

KEŞAN

İPSALA

8

5

17

1

10

9

5

9

8

14

8

10

1

7

7

7

16

4

7

3

10

28

4

14

14

17

4

2

9

6

596

26

13

53

8

36

33

16

35

25

59

30

38

8

20

20

23

34

13

26

14

18

63

16

39

26

46

18

7

32

19

1.789

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

62

PROVINCES SUB-PROVINCES VILLAGES KM

KIRŞEHİR

KIRIKKALE

ANKARA

ESKİŞEHİR

BİLECİK

KÜTAHYA

BURSA

BALIKESİR

ÇANAKKALE

TEKİRDAĞ

EDİRNE

17

10

The gas transportation and pressurization in the pipeline through the compressor Stations are controlled by a SCADA (Supervisory Control and Data Acquisition) system. This industrial control system is a computer aided control

system that supervises the performance of the gas transportation processes continuously. In the event of any risky flow or temperature change in the flow process, the control system monitors emit alarm.

ITE Route

Compressor Station – Pig

Metering Station – Pig

Pig Station

11

The gas transportation and pressurization in the pipeline through the compressor Stations are controlled by a SCADA (Supervisory Control and Data Acquisition) system. This industrial control system is a computer aided control

system that supervises the performance of the gas transportation processes continuously. In the event of any risky flow or temperature change in the flow process, the control system monitors emit alarm.

12

13

ENGINEERING SERVICES PROVIDED WITHIN THE SCOPE OF THE PROJECT •Technical feasibility, •Surveys and determination of the preliminary route corridor, • Obtaining required opinions and permissions from public authorities and entities,•Determination of the final route corridor,• Route report and geodesy engineering services,• As-built works,• Photogrametry engineering services,• Geology & geotechnical engineering services,• Geophysical engineering services,• Engineering services in connection with large river and the Marmara Sea crossings,• FEED design: • Engineering design works on surface facilities, - Compressor stations, - PIG stations, - Gas-measurement station, - Block valve stations,• Performing EIA (Environmental Impact Assessment) and ESIA (Environmental-Social Impact Assessment) works and obtaining "Positive Environmental Impact Assessment Report",• Performing Environmental Monitoring Works, • Preparation of the expropriation plans and folders • Pipeline axis and Corridor application • Outbuilding determination and questionnaire studies, • Property value appraisal services,• Occupational health and worker safety management and supervision,• Flue gas waste heat feasibility work• Project Quality Assurance and Quality Control, • Preparation of the Risk Management plan,• Drawing up of the Project Management and Operation Plan • Preparation of the Construction Management plan

FEED services are carried out by Sebat Proje Muhendislik-Musavirlik Tic. Ltd. Şti. Consultancy services are received from 5 universities and 2 foreign firms within the scope of the project.Employer’s technical supervising work is carried out by Ener İnşaat Savunma Sistemleri Sanayi ve Tic. A.Ş. andNasa Mühendislik Mimarlık İnşaat San ve Tic. A.Ş.Detailed Engineering work is carried out by Mannesmann EC (former Technip Germany) & NYEner Consortium.Expropriation Activities/Land acquisition is carried out by Sebat Proje Mühendislik Müşavirlik Tic. Ltd. Şti.

14

TECHNICAL FEASIBILITY, SURVEY ANDDETERMINATION OF THE PRELIMINARY ROUTE

First of all and route surveys, technical feasibility studies and surveys have been completed and the preliminary route corridor has been determined.

15

OBTAINING OPINIONS OF THE PUBLIC ENTITIES

1. Information meetings were held with the representatives of 17 Offices of Governor and 15 General Directorates. 2. Written opinions and permissions about the route of the project were obtained from 525 public entities. 3. All [positional and attribute] data obtained have been integrated with the GIS.

ITE Natural Gas Pipeline

ITE NGP 2 km Corridor

BOTAŞ Available Natural Gas Pipeline

BTC Petrol Pipeline

NABUCCO Natural Gas Pipeline

ITE KM Points

Legend

0+000

16

• Along the route corridor, 155 C2 [bent bar] and 1,198 C3 [concrete], totaling 1,353 ground control points have been installed. • The respective 3-degree Gauss-Krüger coordinates and the geographic and Cartesian coordinates as well as the velocity values of the ground control points have been produced in WGS84 and ED 50 systems. • Conversion parameters have been computed for 15 regions along the route corridor. • Geodesic studies have been carried out in consultation with Gaziosmanpaşa University. • Geodesic studies have been checked and approved by the Regional Land Registry and Cadastre Offices. • Geoid surfaces have been topped for each region.• The produced ground control points have been saved in the map data bank of Turkey.

GEODESY ENGINEERING SERVICES

17

• Photogrammetric flights were performed over the flight corridor of 4 km along the route of the pipeline. • 8,798 stereo images were taken. • 7,935 orthophoto map chart sheets with 1/2000 scale have been produced. • Digital Terrain Models (DTM) have been developed for the produced sheets. • A digital photogrammetric map [vector map] with 1/2000 scale has been produced. • Photogrammetric studies were carried out in consultancy with the Selçuk University and academically analyzed and approved.

PHOTOGRAMMETRIC ENGINEERING SERVICES

18

AS-BUILT / SURVEY MEASUREMENTS

SPECIAL CROSSINGS / DIMENSIONAL DRAWINGS

All underground facilities [existing gas and oil pipelines, underground cables, fiber optic telephone cables, electric cables, water ducts, etc.] along the ITE corridor were identified and measured. Coordinates and other attributes of these facilities have been recorded in a manner in compatible with the GIS system.

• 103 major special crossings [river, highway, railway] have been identified along the route of the pipeline. • Dimensional drawings with 1/500 scale of the special crossing and the special crossing desig-ns have been developed.

• Streams, roads, canals, lakes, ponds, aerial lines of 6,259 sorts and types have been crossed.

19

20

21

GEOLOGY / GEOTECHNICAL MEASUREMENTS

HYDROLOGY AND THE DARDANELLES STRAIT CROSSING

• Total 1,640 bore-holes and exploratory pits were completed along the pipeline and in ground facilities within the scope of the geotechnical work carried out in order to determine the necessary ground parameters such as carrying capacity-settlement, underground water conditions, excavability and backfilling criteria and to predict the possible geological risks such as active fault, karstik morphology, landslide, creep, erosion and liquefaction along the pipeline route.

• Necessary laboratory tests (soil-rock mechanics, soil and water chemical tests etc.), underground water level measurements were made in boreholes and exploratory pits; and data and comment reports including all geotechnical field and laboratory results were prepared.

• Hydrological measurements, earthquake risk analysis, seismic explorations and liquefaction risks along the route of the pipeline were completed and reported.

• The sea crossing in length of 17 kilometers has been designed with two 36-inch pipes. • Hydrography and oceanography studies of the Dardanelles Sea crossing of the pipeline have been completed. • The sea crossing and bathymetric map has been produced in consultation with Yıldız Technical University. • The studies and reports have been approved by the Turkish Naval Forces Commandership, the Presidency of the Navigation Hydrog-raphy and Oceanography Department.

22

Legend

ITE Route

Compressor Station – Pig

Metering Station – Pig

Pig Station

ABOVE GROUND FACILITIESENGINEERING DESIGN WORKS

TECHNICAL DATA OF THECOMPRESSOR STATIONS

COMPRESSOR STATIONS INLET ANDOUTLET DATA

Flow Rate: 4.17 million m3/hour - 3,165,000 Kg/hour Pressure: Inlet (46.6-53 bar differs on each CS) Outlet 92 bargTemperature: 50 °C Pipe Diameter: 56" Compressor Turbine Train Shaft Power (ISO base): 33 MW Efficiency of Turbine (Approximately): 36.9%

LINE VALVE, PIG, METERING ANDCOMPRESSOR STATIONS

Compressor Station: 7 pcs Metering Station: 1 pcs Pig Station: 2+(7+1)=10 pcsLine Valve: 48 Pcs

23

Altitude (m)

Ambient Temperature (°C)

Relative Humidity (%)

Air pressure (bara)

Flow (cubic meter per day)

Suction pressure (bara)

Discharge Pressure (bara)

1461

28

35.6

0.86

99331200

47.1

92.5

1739

28

31.8

0.83

98796000

53

92.5

1845

28

31.8

0.82

96945600

51.6

92.5

1337

28

31.1

0.87

97718400

54

92

854

28

37.8

0.92

97063200

46.6

92.5

990

28

34.9

0.91

96511200

52.1

92.5

836

28

35

0.92

95966400

52.7

92.5

Station

Sıte

Con

d's

Sum

mer

Pha

se

CS1 CS2 CS3 CS4 CS5 CS6 CS7

Location Classes for each Pipeline Section

Iran - Turkey Border to CS - 1

CS - 1 to CS - 2

CS - 2 to CS - 3

CS - 3 to CS - 4

CS - 4 to CS - 5

CS - 5 to CS - 6

CS - 6 to CS - 7

CS - 7 to Turkey - Greece Border

5

219

245

247

286

248

260

284

100

98.1

99.2

99.8

98.6

97.3

99.0

97.8

Section Cumulative length (km) LC 1 (%)

0

1.7

0.6

0

1.2

2.5

0.5

0.8

LC 2 (%)

0

0

0

0

0

0

0.3

1.2

LC 3 (%)

0

0.2

0.2

0.2

0.2

0.2

0.2

0.2

LC 4 (%)

24

Preliminary feasibility studies concerning the HRSG system which will convert the waste heat [approximately 600°C] generated at the compres-sor stations into electricity power have been completed.

This system will be applied first time at the natural gas compressor stations in Turkey.

The waste heat generated by the gas turbines will be reduced from the level of 600°C to 130°C, so that its negative impact on the environment will be mitigated. As a result of the studies, it has been found that the HRSG is beneficial in terms of the environ-ment and highly profitable in economic terms.

HEAT RECOVERY STEAM GENERATION (HRSG)

Steam Cycle

Power Out

Heat Out

Exhaust Heat In

Power Turbine

HeatRecovery

Boiler

CondenserPump

25

• The route has been designed with 1,889 horizontal and 34,117 vertical bends.

• 302 vertical bends have been designed as "hot bend".

• Members of the vertical bends have been designed as 69 d - 104.5 d.

• Radius of vertical bends designed as 69D-104D

PIPELINE DESIGN WORKS

26

TECHNICAL DATA ON THE PIPESTO BE USED IN ITE PIPELINE

CHARACTERISTICS OF ITE NATURAL GAS PIPELINE

Flow rate

Flow rate

Diameter

Wall thickness

Grade of steel

Diameter of subsea pipeline

Wall thickness of sea pipeline

Technical specification of the line pipe

Pipeline Length 56 inch (on shore)

Pipeline Length 36 inch (offshore)

Overall Length of the Pipeline

35 x 109 m3/year

4,166,667 m3/hour

56 inches [1422.4 mm]

20.6 to 36 mm [depending on the class design factor]

API Grade x 70

36 inches

20.6 mm

API 5L and ISO I EN-1594 [chemical and tests]

linear pipe length (1,789-19.2) km

2x19.2=38.4 km

~1,789 km

27

• "Public Participation Meetings" were held under the supervision of the Ministry of Environment and Urban Planning in 17 provinces and sub-provinces. •The "Meeting of the Examination and Evaluation Commission" attended by the representatives of 95 public entities was held at the Ministry of Environment and Urban Planning on 08.10.2012. • The "Environmental Impact Assessment Positive" certificate has been obtained by the decree of the Ministry of Environment and Urban Planning, dated 26.02.2013 and no. 2898. • ln addition, the "Environmental and Social Impact Assessment Report" has been prepared for submission to International financial Institutions. • "Social Impact Assessment" (SIA) studies were carried out with the participation of 1,051 persons in 117 villages along the route corridor in length of 500 meters. • Environmental Monitoring works are carried out and the reports are submitted to the Ministry of Environment and Urban Planning at certain intervals.

ENVIRONMENTAL IMPACT ASSESSMENT (EIA) AND ENVIRONMENTAL-SOCIAL IMPACT ASSESSMENT (ESIA) STUDIES

All [position and attribute] data produced and obtained within the scope of the project have been integrated with the GIS.

The GIS studies are being carried out in consultation with Karadeniz Technical University.

A GIS portal has been created to enable the access to, analysis of and changes to the data via the Internet.

Besides, ITE – Expropriation Information System Portal has been created to enable the instant follow-up of Expropriation / Land Acquisition process (reporting and cases concerning the parcels to be expropriated).

GEOGRAPHIC INFORMATION SYSTEM (GIS)

1- Decree of Expropriation/Public Utilities Within the scope of ITE Expropriation Services, the decree of Public Utilities/Expropriation of the Council of Ministers of the Republic of Turkey was published on the Official Gazette, dated 25.07.2013 and numbered 28718.

2- Route Corridor The construction corridor has been determined as 12m + 24m = 36 meters (24 m in meadows and forest lands). 15.5m of the route corridor of 36m will be used as health protection strip, and 36 m will be used as construction corridor.

3- Qualification of Expropriation Permanent easement for 15.5 m and temporary easement for 20.5 m, and ownership expropriation for the permanent facilities (Compressor Station, Line Valve, PIG Station, Post locations etc.) will be made along the pipeline.

4- Expropriation Field Offices 11 Expropriation Field Offices were set up in January 2014 along the pipeline in order to execute Expropriation/Land Acquisition Services.

EXPROPRIATION/LAND ACQUISITION AND APPRAISAL SERVICES

5- Parcel and Owner Information

Parcel

Owner

74,526

224,358

Corridor of 500 meters

23,276 (Total) * 17,344 (Persons)

55,551

Corridor of 36 meters

28

7- Expropriation Plans Within the scope of expropriation engineering services, expropriation folders and plans concerning all parcels through which pipeline route corridor passes were approved by the relevant Directorates of Cadastre. 8- Property Value Appraisal ServicesAppraisal works for all parcels through which Iran – Turkey – Europe Natural Gas Pipeline Project route corridor passes have been completed and they have been approved by Selçuk University.

9- Expropriation/Land Acquisition First works for Expropriation/Land Acquisition Services began in May 2014, and the lawsuit processes are executed pursuant to the relevant articles of Expropriation Law no. 2942. (Expropriation Law no. 2942, Article 27, Article 8, Article 10). 10 – Forest – Meadow Crossings The permissions for forest land crossings have been obtained pursuant to Forest Law no. 6831. Meadow crossing transactions are executed pursuant to meadow law no. 4342.

29

1 Person 60.57

2 BOTAŞ 0.24

3 Organization 0.78

4 Forest 11.66

5 Non-Registration 11.47

6 Finance Treasury 4.27

7 Lawsuit or Objection 2.29

8 Person + Finance Treasury 0.28

9 Person + Organization 0.01

10 Meadow 8.42

6- Parcel Distribution Table Parcel distribution corresponding to Natural Gas Pipeline corridor (personal parcel, agricultural land, forest, meadow etc.) is given in the table below.

30

31

In the studies conducted at the office and in the field; scientific, technical, social and economic data have been evaluated and the route of the pipeline has been determined accordingly. Within the scope of such studies; all geologic, geotechnical, topographical, environmental, social, ecological, archeological, etc. constrains have been analyzed and taken into account.

Along the route of the pipeline, permanent and temporary easement corridor has been identified. The construction corridor has been designed as 12 + 24 = 36 m as per the axis of the pipe. Corridor width is 24 m in meadow and forest lands.

Excavated soil will be used to backfill the pipeline if the soil is suitable, for landscaping and in the access roads. Vegetal [top] soil from the excavations will be accumulated separately along the route and used for landscaping after the construction. Vegetal [top] soil along the construction route passing through agricultural lands will be scraped out (up to a depth of 30 to 40 cm depending on the characteristics of the region), stored with care and replaced when the work has finished. Special care will be given to not mixing the excavation soil with the top soil on the agricultural lands.

IRAN - TURKEY - EUROPE NATURAL GAS PIPELINE (ITE)PROJECT AND CONSTRUCTION PHASE

12

7.5 1.5 1.5 1.5 1.4 5.5 5.5 4 6.51.420.5

10.5

0.5

1 1

240.30.3

SIDE BOOM

SERVICETRUCKSUB SOIL TOP SOIL

TEM

PO

RA

RY

FEN

CE

TEM

PO

RA

RY

FEN

CE

45º 45º

32

Trenches will be excavated according to the dimensions of the pipes and the pipes will be joined by positioning and welding as necessary.

The pipes have been coated with a protective insulator against corrosion. After the welding, the

pipe joints will be coated with polyethylene, etc. as insulator. Before and after the pipe is lowered into the trench, the coat of the pipe is thoroughly checked with a detector.

Measurements are made by state of the art equipment to determine the position for as-built drawings of pipe welding points and bending records. The pipeline is back filled with materials conforming to the technical standards.

Meanwhile, fiber optical cables are laid into the canal. Top of the pipe is covered with the top soil stored with care.

Once the top of the pipe is covered, the line and the pipe welds are subjected to hydrostatic tests section by section. High pressure is used for this test.

Works in the sections of the pipeline being constructed are carried out and completed according to the regulations relevant with the occupational health and safety, quality management, and the environmental, social and ecological aspects.

33

PROJECT POLICY STATEMENT As employer of ITE Pipeline Project, TURANG Transit Taşımacılık A.Ş. gives importance to the health and safety of its employees. For this reason, the policy of the project is to ensure and promote the occupational health and safety, to take all appropriate measures, and to guarantee the safety and healthiness of the workplaces for the employees, customers and the public.

The Project Health & Safety Management System will establish the minimum standards expected for ensuring the health and safety of the people present at the work sites in accordance with the professional practices in the industry and the Employment Laws and Regulations of the Republic of Turkey.

ITE Pipeline Project of TURANG Transit Taşımacılık A.Ş. gives importance to the knowledge and skills of the workers that will ensure safe performance of their jobs and promotes a workplace culture by which the workers are supported and encouraged to contribute to the health and safety programs and initiations. The Project

undertakes to carry out the works in cooperation with the employees and their representatives and to establish and implement measures that will minimize the risks of injury and disease at the workplace.

The Manager of ITE Pipeline Project of TURANG Transit Taşımacılık A.Ş. holds all management departments responsible for implementation of this policy and a health and safety program specific to the respective department and for ensuring the compliance of the department with the Employment Law and regulations of the Republic of Turkey. All department employees are responsible for fulfilling the duties established in this policy, for following the health and safety program of the department and for acting in cooperation with the members of the Health and Safety Committee. Contractors will be informed of the part of this policy concerning them and will be responsible for fulfilling the requirements of the policy.

Occupational health, worker safety and quality control principles will be the fundamental elements of the project.

34

PRINCIPLES APPLICABLE TO THE CONSTRUCTION OF THE PROJECT

Responsibility The Management will assume the role of leadership in the identification and elimination of the Health, Safety and Environmental risks and in the making of the working conditions safer in cooperation with the employees. To be cooperative in the implementation of the health, safety and environment (HSE) policy and principles is the responsibility of each employee of ITE Pipeline Project.

Integration of the Health, Safety and Environment Principles with the Operations ITE Pipeline Project will integrate the health, safety and environment policy, principles, regulatory requirements and internal standards with the

business operations and services of the company. Considerations related with the health, safety and environment will be integrated with all investment decisions.

Prevention of Pollution ITE Pipeline Project believes that the efforts toward prevention of pollution and the efficient and proper use of the natural resources for sustainable growth bear importance for the success of the company in the long term.

Participation Being aware of the fact that labor and knowledge is the most important asset, ITE Pipeline Project will

endeavor to make use of the knowledge and experience of the concerned persons in the establishment and achievement of the Health, Safety and Environment goals and targets.

Health and Safety A healthy and safe environment will be established and maintained for our employees and contractors at all times.

Communication ITE Pipeline Project will clearly communicate our health, safety and environment goals and performance to our employees and the public. In order to fulfill the role of industry leadership, we will

establish the Health, Safety and Environment goals and targets.

Commitment ITE Pipeline Project will conform to the Health, Safety and Environment laws, regulations and internal standards. We will establish programs to carry out the operations in a safe manner and by giving care to the protection of the environment. Organization ITE Pipeline Project will provide sources to maintain a structure which promotes continuous improve-ment in the Health, Safety and Environment perfor-mance.

35

Responsibility The Management will assume the role of leadership in the identification and elimination of the Health, Safety and Environmental risks and in the making of the working conditions safer in cooperation with the employees. To be cooperative in the implementation of the health, safety and environment (HSE) policy and principles is the responsibility of each employee of ITE Pipeline Project.

Integration of the Health, Safety and Environment Principles with the Operations ITE Pipeline Project will integrate the health, safety and environment policy, principles, regulatory requirements and internal standards with the

business operations and services of the company. Considerations related with the health, safety and environment will be integrated with all investment decisions.

Prevention of Pollution ITE Pipeline Project believes that the efforts toward prevention of pollution and the efficient and proper use of the natural resources for sustainable growth bear importance for the success of the company in the long term.

Participation Being aware of the fact that labor and knowledge is the most important asset, ITE Pipeline Project will

endeavor to make use of the knowledge and experience of the concerned persons in the establishment and achievement of the Health, Safety and Environment goals and targets.

Health and Safety A healthy and safe environment will be established and maintained for our employees and contractors at all times.

Communication ITE Pipeline Project will clearly communicate our health, safety and environment goals and performance to our employees and the public. In order to fulfill the role of industry leadership, we will

establish the Health, Safety and Environment goals and targets.

Commitment ITE Pipeline Project will conform to the Health, Safety and Environment laws, regulations and internal standards. We will establish programs to carry out the operations in a safe manner and by giving care to the protection of the environment. Organization ITE Pipeline Project will provide sources to maintain a structure which promotes continuous improve-ment in the Health, Safety and Environment perfor-mance.

36

ABOUT THE NATURAL GAS MARKET IN EUROPE AND MIDDLE EAST

Europe - Iran - Turkmenistan Proven Natural Gas Reserves ChartNatural GasProven Reservestrillion m3 (TCM)

Years

5

0

15

10

25

20

35

30

2002 2003 20052004 20072006 20092008 20112010 20132012 2014

European Union

Iran

Turkmenistan

Unit

BP Statistics as of end of 2014

26.7 27.6 27.5 27.6 26.9 28.1 29.6 29.6 33.1 33.6 33.8 34.0 34.0

2.3 2.3 2.3 2.3 2.3 2.3 7.3 7.3 10.2 17.5 17.5 17.5 17.5

3.1 2.9 2.8 3.0 2.8 2.7 2.5 2.5 2.4 1.8 1.6 1.5 1.5

Iran tcm

tcm

tcm

Turkmenistan

European Union Countries

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Proven Natural Gas Reserves

37

European Union Total Natural Gas Production and Consumption Graphic

It is known that oil accounts for 32.6%, natural gas 23.7%, coal 30%, nuclear 4.4% and hydroelectric sources 6.8% of the total energy consumption in the world.

The three basic factors determining the energy demand of the countries which reflects the level of development are the population increase, the economic development and the technological advancement.

The increase in the world population and the technological advancements indicate that the energy consumption will increase each year. The total proven reserve of natural gas is 187.1 trillion m3, while the production is 3, 5 trillion m3/year. Being one of the most rapidly growing energy markets in the world, Europe is also the largest natural gas market of the world. Natural gas is supplied to Europe from Russian Federation in the east, Algeria in the south and Norway in the north-west.

Turkey will be a natural corridor in the transportation of the natural gas produced in the Caspian and Central Asia regions and the Middle East to the EU market by pipelines. According to the data released by the International Energy Agency [IEA], Europe will need to purchase additional natural gas of 79 billion m3/year from Russia, 51 billion m3/year from the Central Asia, 157 billion m3/year from the Middle East, 136 billion m3/year from the West and North Africa and 18 billion m3/year from Trinidad +Tobago (LNG) totaling 441 billion m3/year in 2030.

billion m3

Years1990

100

200

300

400

500

600

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Total natural gas consumption of European Union countries

Total natural gas production of European Union countries

38

39

Neighboring the countries and regions which own approximately 65% of the oil reserves and 70% of the natural gas reserves of the world, Turkey is a corridor between the producer countries owning these reserves and the European consumer countries of the reserves thanks to its geographical position.

That Turkey has the option to purchase natural gas from the Iran-Turkey-Europe Natural Gas Pipeline (ITE) Project when needed will provide a more comfortable maneuver space to Turkey in the importation of the natural gas. This will have a positive effect on the gas prices.

In addition to the income Turkey will obtain from the passage of the natural gas, the Project will increase the international transportation and trade volume of the private companies operating in the country. This will also increase tax revenues of the government.

Connection of the energy importing West and the energy rich East by pipelines via Turkey will enhance the energy corridor between the East and the West on the territories of Turkey. This will earn Turkey a very important advantage in the socioeconomic development and enhance the geopolitical importance of Turkey.

The project will enhance the competition and negotiation power of Turkey in the process of accession of Turkey to EU and contribute to overcoming of the confidence crises between the two parties and to solving of various political problems.

When realized, the project will stabilize the high and frequently changing energy prices in Europe, make the market parameters more transparent and become a life blood in the meeting of the ever growing energy demand of Europe. This will enhance the economic and political position of Turkey.

Acting as an energy bridge between Europe and Iran, Turkey will earn transit fees and taxes from these lines and provide new jobs to the people thanks to the production and construction of the pipeline. Gaining a strong position in the energy corridor between the west and the east at the beginning of the third millennium, Turkey will be able to grow its economy more rapidly. Economic growth will strengthen the political position of Turkey.

IMPORTANCE OF THE PROJECT FOR TURKEY

TURANG Transit Taşımacılık A.Ş.

İstinye Mah. Bostan Sok. No: 12 Sarıyer, İstanbul, Türkiye • p: +90 212 229 0444 f: +90 212 229 06 66 m: info@asbgroup.com.tr

© Turang Transit Taşımacılık A.Ş. Iran - Turkey - Europe Natural Gas Pipeline Project. All Rights Reserved.