Shell Exploration Production Copyright Shell Exploration Production Ltd

Shell Exploration & Production Copyright: Shell Exploration & Production Ltd. Gas Storage: a Flexibility Instrument supporting Security of Supply 11/25/2020 Lex Huurdeman Manager Regulatory Affairs & Commercial Strategy - Europe

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

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 Onshore areas with restricted access Waddenzee • Liberalised gas Schagen market IJsselmeer & Markerwaard Biesbosch 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). 3

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

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

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 6