March 6, 2014Ernst Brandstaetter

SHV ENERGY“Sizeable” independent LPG

distributor in the world.

Present in 25 countries worldwide

with relevant market position.

2012 sales: €8.7 billion

Volume: 5 million MT

14,000 employees

VTS_02_1.VOBVTS_02_1.VOB

SHV ENERGY in the World

SHV ENERGY ASSETS

TERMINALS 22

SHIPS 8

TRANSLOADING STATIONS 4

RAIL TANK CARS 405

Physical Volume (Million MT) 5

Derivatives Volume (Million MT) 6

ØDK

ØIE

ØGB

ØNL

ØBE

ØDE

ØFR

ØSWE

ØES

ØNOR

ØPL

ØSK

ØHU

ØSI

ØAT

ØCZ

ØBA

ØCRO

ØITA ØMALTA

SHV ENERGY’s Business Units IN EUROPE

2014:Transition year for Europe, the world economy's

most-troubled region

EU expects sluggish growth,

high unemployment to

persist until at least 2015.

Expected growth of about

1% in 2014 is too small to

bring down mass

joblessness, which is testing

social and political cohesion

in weaker countries.

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GDP GROWTH

Eurozone US Japan

The European economy is

not expected to reach its pre-

crisis level for the

foreseeable future contrary

to the US and Japan.

UNEMPLOYMENT RATE

Spain

26%

Greece

27%

Italy

12%

France

10%

Germany

6%

UK

7%

“To shale or not to shale” in Europe: Ideology and political

consideration outweighing economic benefits: For how long?

0

3

6

9

12

15

18

21

24

EUROPE US

Trillion MT Europe vs US Shale Gas Resources

Poland France Ukraine Romania DenmarkUK Netherlands Turkey Germany Bulgaria

91% of the total recoverable shale resources

currently estimated at 12.8 trillion MT are

located in 8 countries.

“To shale or not to shale” in Europe: Ideology and political

consideration outweighing economic benefits: For how long?

Ban/Moratorium on shale gas

European countries at odds on shale

Strong lobby of the Nuclear Industry

Main worry: Environment

European natural gas prices are roughly 3 times higher than in

the US pushing many energy-intensive companies out of

Europe.

Energy-intensive industries employ

30 million people in Europe

“Whoever owns the soil, it’s theirs all the way up

to heaven and down to hell”

0

5

10

15

20

Industry Domestic

Average Cost of Energy (US Cents per kilowatt hour)

US EU

+66%

+84%

US LPG Production in the Shale Gas World,

0

2

4

6

8

10

12

14

0

10

20

30

40

50

60

70

1991 1995 1999 2003 2007 2011 2015

TcfMillion MTShale Gas impact on LPG Production

US Natural Gas Withdrawals from Shale wells US LPG PRODUCTION

If European countries were to copy the US

Shale success story, we could see a

remarkable increase in LPG production

potentially making Europe self-sufficient without

having anymore to import a ton of LPG.

LPG demand in Europe in 2012 (million MT)

More than 80% of the demand

is located in 11 countries

From a growing to a mature market (million MT)

During the 2000s, the autogas sector has significantly

expanded. It is expected to reach almost 9 million MT in

2013, three times the 1998 level

(Million MT) 1998 2008 2012

TOTAL DEMAND 28.6 31.9 29.8

AUTOGAS 3 7.2 8.3

The autogas market on the rise, but… (million MT)78% of the market is located in

5 countries.

Turkey, Poland and Italy represent

more than two thirds of the autogas

market in Europe.

1998 TODAY

Petrochemical demand, a surge followed by a decline

before a new surge?

(Million MT) 1998 2008 2012

TOTAL DEMAND 28.6 31.9 29.8

AUTOGAS 3 7.2 8.3

PETCHEM 5.9 8.6 8.5

For the past 15 years, the petrochemical sector has steadily

increased its consumption of LPG by taking advantage of

weaker LPG prices relative to naphtha.5

6

7

8

9

1998 2008 2009 2010 2011 2012 2013F 2014F

Million MT

During the last decade, flexible petrochemical

plants have been cracking huge volume of

LPG instead of using naphtha

Since 2008, LPG growth has been flat due to :

• The economic crisis

• High LPG prices vs naphtha

LPG vs NAPHTHA in EUROPE

80%

85%

90%

95%

100%

105%

110%

115%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average ratio Propane CIFARAL vs Naphtha CIFNWE

Since 2000, Propane CIFARAL has become more

and more competitive against Naphtha making it

the cheapest alternative substitute.

The petrochemical industry can increase its LPG

consumption by an additional 2 million MT if:

• Europe gets finally out of recession

• LPG continues to be at an all-time low vs

Naphtha

Will the European

petrochemical industry be

competitive enough against the

US, Middle East and Asia

IHS estimates that the chemical industry will invest $129 billion in the

US by 2030 as a direct result of shale gas

From a growing to a mature market (million MT)

Demand from the Residential/Commercial/industry sector

market has crashed by 34% (6.4 million MT) from 1998 to

2012.

(Million MT) 1998 2008 2012

TOTAL DEMAND 28.6 31.9 29.8

AUTOGAS 3 7.2 8.3

PETCHEM 5.9 8.6 8.5

RES/COM/INDUS 18.8 14.9 12.4

1998 (Japan)

2012 (Japan)

18.8 16.7

1.6 1.2

2.4 2.7

14.8 10.2

From a growing to a mature market (million MT)

More than 50% of the

Residential/Commercial &

Industrial demand is located

in 5 countries

1998 TODAY

The Game Changer for Europe: Diversity of supply

from the North, East, West, South

US

WAF

ALGERIA

FSU

NORTH SEA

MEG

ARA

MED

CEE

2015 World LPG market balance

+8 MILLION MT

1998 TODAY

LPG more and more competitive vs Crude Oil

80%

90%

100%

110%

120%

130%

140%

150%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average ratio Propane CIFARAL vs Brent (Crude Oil)

Cheap oil is a relict of the past even in a long market

$ /bbl

$10 /bbl

$20 /bbl

$30 /bbl

$40 /bbl

$50 /bbl

$60 /bbl

$70 /bbl

$80 /bbl

$90 /bbl

$100 /bbl

$110 /bbl

$120 /bbl

$130 /bbl

$140 /bbl

$150 /bbl

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Brent price

98

110

144

120

101

89

120 121

$80/bbl

$90/bbl

$100/bbl

$110/bbl

$120/bbl

$130/bbl

$140/bbl

$150/bbl

SaudiArabia

Russia Iran Iraq Venezuela UAE Nigeria Algeria

Which level of oil price is needed to balance the government budget?

40% of the world oil supply comes

from this 9 countries.

An average oil price at $100/bbl is a must to

keep their governments running and avoid

unrests like the Arab Spring

Autogas Market: some challenges but huge potential

The automobile industry has not

embraced LPG fuel engine. There is only

limited models available to customers

The LPG industry has to encourage the

automobile industry to propose additional

LPG fueled models

The LPG industry has to invest more to push

the development of LPG injection into

diesel-engine trucksLPG-ONLY STATIONS

Proposing a multi-fuel station with a strong

promotion of LPG as a clean fuel is the way

forward for LPG distributors

Support from the European Parliament

is essential to maintain the current

taxation level

Growth potential for the residential/commercial

sector but not yet embraced

19% of EU households are off-grid

(40 million people)

LPG17%

Electricity15%

biomass34%

Heating oil/solid

fuels34%

Household energy demand in “off-grid Europe”

LPG

Provider

Energy

Provider

LNG SOLAR LPG BIOMASS ELECTRICITYNATURAL

GAS

70%

80%

90%

100%

110%

120%

130%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average ratio Propane CIFARAL vs Gasoil CIFNWE (Heating oil)

120

140

160

180

200

220

Coal Diesel fuel& heating

oil

Gasoline Propane

Pounds of C02 per MBtu

CO2 EMISSION

How to make the difference?

STABLE / FIXED / CEILING

PRICE

COMPETITIVENESS OF

LPG AGAINST OTHER

ENERGY SOURCES

WHAT DOES THE CUSTOMER WANT?

RISK MANAGEMENT

ENERGY

RISK MANAGEMENT, the important layer of SHV

Energy’s supply & sales strategies

SWAP

MINIMUM VOLUME

1,000 MT

S&RM

SWAP OPTIONSWAP &

OPTION

MINIMUM VOLUME

1 MT

GIVES DISTRIBUTORS

A COMPETITIVE

ADVANTAGE

DELIVERS CUSTOMER

SATISFACTION

RISK MANAGEMENT

Some glimmers of hope for the European market

From a demand-driven to

a supply-driven market

LPG is the first choice

versus heating oil

LPG distributors have an

opportunity to use Risk

Management in their

supply & sales strategies

The consolidation of the

distribution market has

only started

In a supply driven market close

cooperation between producers and

distributors will create the best value

for the LPG