European Connections Dr. Rainer Seele Member of the Board of Wintershall

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1 European Connections Dr. Rainer Seele Member of the Board of Wintershall

2 Disclaimer This presentation contains forward-looking statements under the U.S. Private Securities Litigation Reform Act of These statements are based on current expectations, estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed in BASF s Form 20-F filed with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking statements contained in this presentation. 2

3 The Wintershall value chain Exploration & Development Production Gas Trading 3

4 Positioned for growth in European gas markets Exploration & Development Production Gas Trading 4

5 Solid foundation for growth in European gas markets BASF Group NEL Hamburg Greifswald OPAL 50% 50% 65% 35%* 100% 100% pipeline additional projects underground storage facility 5 *(50 +1 %/ 50-1 %) as of closing date

6 Increasing earnings power and reducing volatility Gas trading sales in billion m³ EBIT gas trading in million Euro E Q1-Q Average growth 11 % p.a negative time lag effect WINGAS major growth driver Continued growth in the future Managing business to reduce impact of time lag effect WINGAS 6

7 WINGAS competitive position Five year average WINGAS Peer I Peer II Range Gas sales growth [% p.a.] Sales per employee [million /employee] EBIT per employee [million /employee] Return on capital [% p.a.]* Return on sales [% p.a.] *(Income before tax + interest on borrowed capital) / average total assets 7

8 Changes in the European gas market Opportunities for sustainable growth Major market developments Increasing market power of producers Increasing import demand Security of supply comes first Contracts with German municipalities are open for competition From market liberalization to increased regulation WINGAS strategic response Diversified portfolio with long-term supply contracts Building additional storage capacities Asset based growth strategy Innovative sales strategies Industry leader in cost efficiency Shaping WINGAS competitive profile Strengthen partnership with Gazprom 8

9 EU liberalization Lean and fast competitors will benefit Impact of regulation on WINGAS: No tariff regulation for competing pipes like WINGAS grid Liberalization as a chance to acquire additional customers Exception from regulation for new infrastructure projects expected WINGAS = Robust business model in current and future market framework 9

10 Key factor for sustainable growth Security of supply through optimization Diversified long-term contracts Transport capacity Storage capacity Security of supply 10

11 Key factor for sustainable growth Long-term supply contracts WINGAS portfolio in billion m³ p.a Portfolio of long-term supply contracts of > 700 billion m³ in total* Strong foundation of business Potential to optimize through short- / midterm supplies in the future * Total over contract period short- / mid-term (1-4y) long-term Russian supplies (2030) 11 long-term West (>4y) long-term Russian supplies (2035) Nord Stream WINGAS sales

12 Key factor for sustainable growth Diversified supply portfolio Delivery points for WINGAS purchases Bunde NEL OPAL Mallnow Greifswald Various delivery points close to markets Minimize east/west transit through swaps NBP Zeebrugge ZBH TTF Eynatten Rückersdorf Waidhaus* Olbernhau Velke Kapusany = Optimized logistics = Security of supply PEG Oberkappel* Western Russian Haidach Burghausen* Baumgarten* 12 * Supply points into Bavarian or Austrian grid

13 Key factor for sustainable growth Reaching further into Europe Projects for new transport capacity 1 st Phase (2006) STEGAL: + 50% capacity NEL OPAL Nord Stream WEDAL: + 30% capacity Investment: 250 million Euro WEDAL expansion 2 nd Phase (2010/12) Nord Stream: 55 bcm/a capacity STEGAL expansion Investment: 2.8 billion Euro on- and offshore (BASF-share) Compressor station = Secured income through long term contracts 13

14 Key factor for sustainable growth Nord Stream further asset based growth Nord Stream project NEL Storage Jemgum Achim System upgrade to Waidhaus Nord Stream Greifswald OPAL Olbernhau Offshore: 2x 27.5 bcm/a capacity first line 2010 Onshore: OPAL (2010) connects to Olbernhau ( markets in SE Europe) NEL (2012) connects to Achim (near Rehden) Enhanced access to NL, B, (UK) through system upgrade incl. storage (2012) = WINGAS turntable for Russian gas in NW Europe 14

15 Key factor for sustainable growth Storage strategy No. 3 in Western Europe Storage capacities of European players Why Storage? Working gas in billion m³ Growing gas demand leads to storage demand STOGIT GDF WINGAS E.ON Ruhrgas Sources: annual reports, own data 2.8 Centrica Storage Security of supply is the main value proposition Expertise in storage construction differentiates WINGAS from competitors Integrated sales products for target customer segment municipalities Attractive returns in combination with WINGAS infrastructure

16 WINGAS storages in NW Europe Linked storage portfolio Competitive advantage through storage portfolio: Saltfleetby (2008/09) Jemgum (2011/12) NEL Rehden OPAL Nord Stream Different markets/regions Different storage characteristics Pipeline linkage Total investment of approx. 900 million Euro (WINGAS share) Haidach (2007) = Security of supply = Arbitrage potential existing planned/ under construction 16

17 Infrastructure based optimization and arbitrage 4 Regional gas prices Euro-cent/kWh Significant arbitrage upside through linked infrastructure (seasonal, regional) ~40% ~60% Opportunity driven Security of supply for customers first priority 0 Oct 01 Oct 02 Oct 03 Oct 04 Oct 05 Zeebrugge Hub price (spot) German border price EBIT change Q1+Q vs 2005 Optimization by trading Conventional business 17 Source: CERA, BAFA, Wintershall AG

18 WINGAS sales strategy for Germany Supply chain large regional distributor small regional distributor large municipality small municipality Import company household Margin comes first focus on value not volumes Sales strategy Optimization of customer portfolio move closer to end user Focus on storage related products value before volume Opportunities of liberalization Additional sales in municipality segment generate attractive margins Competing pipeline construction 18

19 WINGAS goes Europe WINGAS gas sales in billion m³ p.a % % E 2015E Core regions UK F B DK D CZ AU RO* BUL* Every 5 years growth by 10 billion m³ Focus on growth outside Germany From trader to asset based supplier Value creation through infrastructure Europe excl. Germany * WIEE Germany 19

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