GAZPROMS POWER GENERATION STRATEGY Denis Fyodorov Head of the - - PowerPoint PPT Presentation

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GAZPROMS POWER GENERATION STRATEGY Denis Fyodorov Head of the - - PowerPoint PPT Presentation

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GAZPROMS POWER GENERATION STRATEGY Denis Fyodorov Head of the Directorate for Power Sector Development and Marketing in Power Generation, Gazprom; Director General, Gazprom energoholding PRESS CONFERENCE ON THRESHOLD OF GAZPROMS ANNUAL

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PRESS CONFERENCE ON THRESHOLD OF GAZPROM’S ANNUAL SHAREHOLDERS MEETING JUNE 22, 2011

GAZPROM’S POWER GENERATION STRATEGY

Denis Fyodorov

Head of the Directorate for Power Sector Development and Marketing in Power Generation, Gazprom; Director General, Gazprom energoholding

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GAZPROM’S POWER GENERATION STRATEGY

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Gazprom’s Power Generating Assets

– Gazprom’s core assets: Mosenergo, TGC-1, WGC-2, WGC-6 – Total capitalization of core generating assets exceeds USD 9 billion – Besides, Gazprom holds minority interests in some power generating companies Minority stakes (1-10%) in non-core assets*

53.5% 51.8% 57.3% 60.6%

Core generating assets

Source: Gazprom’s data

Kaunas CHPP *Largest minority packages within Gazprom energoholding

Other generating assets Power supply

FGC UES of Russia RAO Eastern Energy Systems Inter RAO UES TGC-11 Holding MRSK TGC-5 Gazprom energo Mezhregionenergosbyt

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Gazprom’s Power Generating Assets: in Russia

Gazprom is a leader among Russia’s state-owned and private companies in terms of installed power capacity (IPC) Gazprom accounts for 17% of IPC of the Russian power industry

Source: Gazprom’s data

Top ten market players with the largest installed power capacity, GW

GAZPROM’S POWER GENERATION STRATEGY

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Implementing Investment Program

  • f Gazprom energoholding

Source: Gazprom’s data

Investment program is being implemented in full As of May 2011, the investment program was financed by 50%

RUB billion GW within CSA

GAZPROM’S POWER GENERATION STRATEGY

Total

367 182

Financed

Total

Total Put onstream Under construction

Total

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Implementing Investment Program

  • f Gazprom energoholding

Source: Gazprom’s data *Not including capacities decommissioned **To be commissioned in 2011

Investment program will increase the installed capacity

  • f Gazprom energoholding to 44 GW*

Commissioning of CSA facilities in 2007-2011

Station Capacity, MW Commissioning date Mosenergo (3rd power generating unit of CHPP-27, CHPP- 21, 4th power generating unit of CHPP-27) 1,325 2007–2008 TGC-1 CHPP-7 50 September 2009 Mosenergo, CHPP Pavlovsky Posad 16 December 2009 WGC-6, SDPS-24 420 June 2010 TGC-1, first power generating unit of CHPP-14 180 October 2010 TGC-1, HPP chain 121 July 2009–February 2010 TGC-1, CHPP-22 450 April 2011 TGC-1, HPP chain** 31 July 2011 Kirshskaya SDPS upgrade** 800 November 2011 Mosenergo, CHPP-26** 420 2011

GAZPROM’S POWER GENERATION STRATEGY

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Operating Results

  • f Gazprom’s Power Generation Assets

Power energy, billion KWh Thermal energy, million Gcal

2008 2009 2010 GAZPROM’S POWER GENERATION STRATEGY

In 2010 the total increase in power generation made up 6% versus 2009

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Financial Results of Gazprom’s Power Generating Assets

Receipts Net profit EBITDA

2008 2009 2010 +29.0% +30.7% +17.4% +15.7% GAZPROM’S POWER GENERATION STRATEGY

Results under IFRS

RUB billion

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Projected Status of Gazprom energoholding by 2020

Strategy implementation and power generating assets consolidation will transform Gazprom energoholding into a major European integrated company by 2020

5% 10% 15% 20% 25% 30%

  • 10%

0% 10% 20% 30% 40% Source: Gazprom’s data, strategic analysis

Projected status 2020

Average rate of proceeds growth (2007–2010) Cost effectiveness according to EBIT (2007–2010)

GAZPROM’S POWER GENERATION STRATEGY

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Results of Shareholders Meetings in WGC-2 and WGC-6

The Annual General Shareholding Meetings of WGC-2 and WGC-6 took place on June 21, 2011. Shareholders of both companies voted for a merger between WGC-6 and WGC-2. Other agenda issues were approved as well. The newly elected Boards of Directors are comprised of:

GAZPROM’S POWER GENERATION STRATEGY WGC-2 WGC-6

  • 1. Denis Fyodorov, Gazprom
  • 1. Denis Fyodorov, Gazprom
  • 2. Anatoly Gavrilenko, LEADER
  • 2. Oleg Savelyev, INTER RAO UES
  • 3. Alexey Mityushov, WGC-2
  • 3. Ilnar Mirsiyapov, INTER RAO UES
  • 4. Damir Shavaleyev, Gazprom neftekhim Salavat
  • 4. Anatoly Gavrilenko, LEADER
  • 5. Oleg Tarasov, SO UES
  • 5. Alexey Mityushov, WGC-6
  • 6. Pavel Shatsky, Gazprom energoholding
  • 6. Damir Shavaleyev, Gazprom neftekhim Salavat
  • 7. Igor Golenischev, Gazprom
  • 7. Irina Korobkina, Gazprom
  • 8. Irina Korobkina, Gazprom
  • 8. Pavel Shatsky, Gazprom energoholding
  • 9. Artur Trinoga, Gazprom
  • 9. Mikhail Khodursky, Gazprom energoholding
  • 10. Mikhail Khodursky, Gazprom energoholding
  • 10. Lyudmila Sergeeva, SO UES
  • 11. Denis Kulikov, Investor Protection Association
  • 11. Igor Golenischev, Gazprom
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Merger between WGC-2 and WGC-6: Benefits for Shareholders

  • The merger will create Russia’s leading thermal power generating company, the synergetic effect may

achieve RUB 7.8 billion in 2011–2015 according to the most conservative predictions.

  • Later on, the cash flow of the integrated company will be additionally increased due to the accession
  • f Adler CHPP.
  • As a result of the merger, the leader of Russia’s thermal power generation industry will be set up. The

company’s liquidity is expected to grow, while the amount of debt capital will diminish.

Source: Gazprom’s data

United company’s indicators

Capacity, GW Proceeds in 2010, RUB billion

47.9 48.6

96.5

8.7 17.9 9.2

WGC-2 WGC-6 WGC-2 + WGC-6 WGC-2 WGC-6 WGC-2 + WGC-6 GAZPROM’S POWER GENERATION STRATEGY

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Merger between WGC-2 and WGC-6: Benefits for Shareholders

Growth potential for WGC-2 and WGC-6 shares makes up 62% and 72% accordingly versus comparable analogues

Source: companies’ data (RAS, first quarter of 2011), Bloomberg (June 8, 2011)

Multipliers of similar Russian companies

Company MCap, USD million EV, USD million EV/IPC, USD/kWh WGC-1 2 248 2 087 212 WGC-2 1 701 1 725 198 WGC-3 2 411 1 033 124 WGC-4 5 364 5 364 591 Enel WGC-5 3 034 3 781 432 WGC-6 1 360 1 710 187 Average* 340 Median* 322

Multipliers of EV/IPC, USD/kWh

*Exclusive of WGC-2 and WGC-6

193 320 340

Average (WGC-2 and WGC-6) Median (market) Average (market) GAZPROM’S POWER GENERATION STRATEGY

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Gazprom’s Priorities for Further Progress in Power Industry

At the next stage Gazprom is planning to take actions on optimizing the asset management structure and improving its operating results

1. Completion of merger between WGC-2 and WGC-6 2. Investment program execution 3. Operating results optimization 4. Further asset consolidation 5. Entry into new markets

GAZPROM’S POWER GENERATION STRATEGY

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PRESS CONFERENCE ON THRESHOLD OF GAZPROM’S ANNUAL SHAREHOLDERS MEETING JUNE 22, 2011

THANK YOU FOR YOUR ATTENTION!