North Africa – Mediterranean Opportunities F. Allegra – Enel 10 th African Oil & Gas Trade and Finance Conference &

1. NOT AN OFFICIAL UNCTAD RECORD North Africa – Mediterranean Opportunities F. Allegra – Enel 10th African Oil & Gas Trade and Finance Conference & Exhibition Algiers, 2006 April 4th

2. Agenda • Enel profile • Mediterranean gas market and future development • Potential constrains • NOCs and utilities role

3. Enel is the third largest listed utility Market cap of worldwide utilities1 (€bn) Shareholders Profile2 (% of shareholders’ equity) 21,9% 38,4% 10,2% 29,5% Geographical split of institutional investors3 24,4% 22,8% 5,2% 8,3% 2,4% 10,7% 24,7% Source: Bloomberg, Company’s data • As of March 9th, 2006 • As of September 2005 • Percentages on the institutional investors’ share

4. DISTRIBUTION 82% of the total electricity distributed in Italy SUPPLY nearly 30 million customers. Enel in the Italian electricity sector GENERATION 42,047 MW • 26,837 MW Thermal • 14,318 MW Hydroelectric • 642 MW Geothermal • 250 MW Wind and other renewable Data as of December 31st 2004

5. International assets Spain • Viesgo: 2.366 MW coal, oil, hydro; more than 600.000 customers • Enel Uniòn Fenosa Renovables: 445 MW (80% Enel) • Escatron CCGT: realization started 800 MW Enel North America • 410 MW Hydro, wind and other renewable in US (and Canada) Russia • Operation of the NW Power Plant, 450 MW CCGT in S. Petersburg SE FI Slovakia NO • 66% of Slovenské Elektrárne 6.881 MW EE RU LV DK LT UK Romania BY NL PL • 51% distribution company Banat & Dobrogea • 1,4 mn customers for total 7.7 TWh distributed BE DE UA CK SK FR AT CH Enel Latin America • More than 200 MW hydro, geo and wind in central America and Chile • El Salvador [Geo]: 12,5% (growing) participation in LAGEO HU MO SI HR RO BA IT PT YU Bulgaria ES BG MK • 60% di Maritsa East III Power Holding BV company that owns the lignite power plant of Maritsa East III 840 MW AL(1) TR GR France • 1000 MW contracted with EdF • Participation to the development of the new generation nuclear power plant (EPR) • Trading activity on Powernext OTC and large account direct sales

6. Agenda • Enel profile • Mediterranean gas market and future development • Potential constrains • NOCs and utilities role

7. 169 160 129 CAGR 116 95 Consumption 6,0% 75 Import 7,9% 145 CAGR 111 Production 8,1% 71 66 Consumption 50 30 9,1% Mediterranean gas market overview bcm Reserves: 7.844 bcm Sources: CERA; Italian Ministry of Industry; Egas; Argus Global LNG; estimates

8. CAGR 3,5% 18,6% 48 42 34 1,9% Power generation CAGR Industry 85 3,7% 5,0% France Residential 68 10,8% 52 0,6% 3,4% Italy CAGR 14,5% 33 41,1% 3 2 0 18 8 Greece 7,0% Spain 11,6% Med-European gas demand bcm Sources: CERA; Italian Ministry of Industry

9. CAGR 2,2% 212 192 169 2,4% Power generation demand Other uses demand 2,3% 248 206 145 CAGR 101 5,5% 85 71 Production 3,6% Consumption Mediterranean gas market outlook bcm Sources: CERA; Italian Ministry of Industry; IEA World Energy Outlook 2005; estimates

10. Algeria 137 116 90 Egypt 74 63 37 31 28 45 39 39 31 CAGR CAGR CAGR Production 6,5% 4,3% 10,4% Consumption 3,8% 2,8% 5,2% North African gas market outlook bcm Libya 33 24 13 12 10 8 Sources: CERA; IEA World Energy Outlook 2005; estimates

11. CAGR CAGR CAGR 3,8% 1,8% 2,2% 1,1% 9,2% 3,3% 60 53 48 Power generation Other uses 102 95 4,2% 1,4% 2,3% 85 France Italy 48 42 33 6 4 3 Greece Spain Med-European gas demand outlook bcm Sources: CERA; Italian Ministry of Industry

12. Import Existing gas pipelines Existing LNG liquefation plants 140 21 Existing LNG regassification plants 3 41 18 18 Projected gas pipelines 70 72 Projected LNG liquefation plants 35 35 78 6 Projected LNG regassification plants 33 32 70 70 46 46 existing planned total under construction Export 40 151 22 20 18 81 91 14 LNG 6 pipe 45 70 46 existing planned total under construction Mediterranean import-export infrastructures bcm/y Sources: CERA; Petroleum Economist; others

13. Existing gas pipelines Existing LNG terminals Projected gas pipelines Projected LNG terminals 79 188 59 78 29 20 LNG 16 80 13 pipe 110 77 existing total under construction planned & speculative Italian import capacity Netherlands and Norway Russia bcm/y TAG (26 bcm) Expansion (6,5) Transitgas (17) Trieste LNG (8) Panigaglia LNG (3,5) Monfalcone LNG (8) Livorno LNG (3) Rovigo LNG (8) Rosignano LNG (8) Brindisi LNG (8) Igi (10) Greece Gioia Tauro LNG (8) Taranto LNG (8) “Galsi” (10) Priolo LNG (8) 3 Nuove Energie LNG (8) Algeria Transmed (26) Expansion (6,5) Greenstream (8) Algeria Libya

14. Demand (bcm) 201 175 2,9% 159 CAGR SE 2,4% FI NO Import 2005 2,2% EE RU 133 bcm LV DK LT UK BY NL PL BE DE UA CK SK FR AT CH HU MO SI Power generation HR RO BA IT PT YU Other uses ES BG MK AL(1) TR GR Central & Eastern Europe natural gas demand Source: CERA

15. Agenda • Enel profile • The Mediterranean gas market and future development • Potential constrains • NOCs and utilities role

16. Key features Main constrains Traditional structure of the gas sector in Europe • Player • Infrastructure • Contracts • Mostly vertically integrated incumbents: importer(/ producer) and transporter • Developed and controlled by the vertically integrated incumbents • Long term ToP • Gas pricing formulas indexed on oil products • Unfavorable and not transparent access terms for gas transport and storage • Lack of flexibility (long term commitment) • Exposure to oil price volatility

17. Deregulation policies and new infrastructure development Main guidelines • TPA exemption • Unbundling of the vertically integrated incumbents • Harmonization and improvement of grid access rules • Transparency • Non-discriminatory TPA • Efficiency However, new complex and expensive projects generally require... • Long term firm commitment

18. UK Western Europe Eastern Europe Crude oil Other 0,7% Coal price 2,1% 4,6% Fixed 2,6% 5,2% 7,0% Electricity price 0,8% 0,6% 14,6% Heavy fuel oil 48,1% 30,0% 16,2% Light fuel oil and gasoil General inflation 16,5% 50,1% 40,1% 47,2% Gas price 2,0% 4,9% 1,1% Gas pricing schemes Source: “Sector Inquiry on the gas and electricity markets”, European Commission, DG Competition, Feb. 2006

19. Implication Possible solution Security of supply • High oil (and gas) price • Geopolitical instability • Demand from fast growing economies • Utilities fuel diversification strategy • Government policies • Fuel mix restriction • Taxation • Import caps • Diversification of supply • Build “security margins” • Back-ups/ recoveries in case of crisis • Additional flexibility

20. Agenda • Enel profile • The Mediterranean gas market and future development • Potential constrains • NOCs and utilities role

21. Gas players evolving role NOCs going to market • Regassification terminal participation • Pipeline development • Marketing & trading Utilities going up- and midstream • LNG plants participation • Natural gas fields development COOPERATION NOT COMPETITION!

22. Cooperative approach Benefits NOCs Utilities • Final markets access • Support in the development of the domestic market • Gas & electricity distribution • Power generation • National system and grid • Security of gas supply • Long term competitiveness Mutually beneficial partnership based on complementary competences

23. GALSI: a new opportunity in the Mediterranean area • Capacity • Start-up • Capex estimate • Total length • Partners • Benefits • Enel • Sonatrach • 10 bmc/year • 2H 2009 • 2 bn USD • 910 km from Algeria • to Tuscany • Sonatrach and Enel • (+ others) • Direct supply with own import infrastructure • Direct access to the Italian and European market

24. Conclusion NOCs + Utilities A balanced partnership offers a unique opportunity for an effective development of the markets both in Europe and in North Africa