LNG Outlook

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Definitions & Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves.

cautionary note
Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources are consistent with the Society of
Petroleum Engineers (SPE) 2P + 2C definitions.
Discovered and prospective resources: Our use of the term “discovered and prospective resources” are consistent with SPE 2P + 2C + 2U definitions.
Organic: Our use of the term Organic includes SEC proved oil and gas reserves excluding changes resulting from acquisitions, divestments and year-average pricing impact.
Shales: Our use of the term ‘shales’ refers to tight, shale and coal bed methane oil and gas acreage.
Underlying operating cost is defined as operating cost less identified items. A reconciliation can be found in the quarterly results announcement.

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Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

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Gas playing a prominent role in meeting growing energy demand
GLOBAL GAS DEMAND GROWTH BY REGION (BCM)

Global energy demand growth by fuel (bcm) Global gas demand growth by sector (bcm) Global gas demand growth by region (bcm)
20000 5000 5000

13% 2% 7% 22% 7% 21%

15%
45% 18% 26% 15%
4000 4000 25%
45% 39%
15000

3000 3000

10000

2000 2000

5000
1000 1000

0 0 0

Source: Shell interpretation of Wood Mackenzie Q4 2016 data

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Gas provides competitive, flexible, cleaner power supply

Gas plants are cheaper to build & operate Addressing local air quality concerns
Capital Cost Of Power Plants KW/yr lb/MWh gross
$400 0.8
$8,000 Negligible Negligible
$300 0.6 emissions from emissions from
$6,000
gas gas
$200 0.4
$4,000

$2,000 $100 0.2

$0 $0 0
Biomass CC Geothermal Offshore Dual Solar Photovoltaic Coal Single Hydro Onshore CCGT
Wind Nuclear Thermal Unit Wind SO2 NOx PM2.5
Overnight Capital Cost ($/kW) Fixed Operation & Maintenance Cost ($/kW-yr) RHS Coal Emissions, Supercritical Pulverized Coal Boiler Natural Gas CCGT

Supporting renewable generation growth Facilitating climate change objectives

Average Time Required To Come Online, Minutes kg CO2e/MWh,100-year Global Warming Potential

1,200
Gas Large OCGT 22 1,000 61% lower 58% lower
800 than coal than coal
Gas CCGT 15 80 600
400
Coal 300 85 200
-
0 50 100 150 200 250 300 350 400 Average fleet natural gas Average fleet coal Most efficient natural gas Supercritical coal
Time to synchronise with grid Time to reach full load

Copyright of Royal Dutch Shell plc Source: IEA, NETL 2013-Cost & Performance baseline for Fossil Energy Plants, NETL; Life Cycle Greenhouse Gas, DECC 21 June 2017 5
Policymakers increasingly choose gas

Leaders’ Communique pledged to ‘enhance collaboration on solutions that promote natural gas’ as ‘a less emission-
intensive fossil fuel’

170+ members agreed sulphur limit in shipping fuel of 0.5% from 2020
LNG as a fuel contains virtually zero sulphur vs. 3.5% specification for global marine fuel today

13th Five Year Plan targets 45 bcm of incremental gas consumption by 2020. China has suspended more than 100
coal-fired plants either approved or under construction

“We have given priority to move towards a gas based economy. Effort must be made to increase
natural gas production while also creating import infrastructure to meet the growing domestic demand.’’
Prime Minister Modi

EU Liquefied Natural Gas Strategy acknowledged critical role of gas in support of energy security, increasing
competitiveness and greenhouse gas emissions targets

France and Canada announced plans to phase out coal fired generation by 2023 and 2030 respectively. They join
Austria, Belgium, Britain, Denmark and Portugal in pledging to close coal fired generation by the end of the next
decade
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Emission reduction policies drive increased gas demand

UK: Lower CO2 emissions Germany: Static CO2 emissions Beijing: Improving air quality
Gas to Coal
TWh MtCO2e TWh MtCO2e ratio PM 2.5
UK Power Dynamics German Power Dynamics
12 12 30 30 2 120

1.8
10 10 25 25 100
1.6

1.4
8 8 20 20 80
1.2 Action Plan for
Air Pollution
Prevention
6 6 15 15 1 60

0.8 Beijing Closure

Olympic of coal
4 4 10 10 40
0.6 Games boilers

0.4 WHO PM 2.5

£18/t CO2e floor guidance
2 2 5 5 20
kicked in
0.2

- 0 - 0 0 0

2008

2009

2010

2011

2012

2013

2014

2015

2016
Jun-15

Jul-15

Jan-16

Mar-16
Sep-15
Apr-15

May-15

Aug-15

Oct-15

Nov-15

Apr-16

May-16
Dec-15

Feb-16

Apr-15

Jun-15

Aug-15

Apr-16
May-15

Nov-15
Dec-15
Jan-16

May-16
Feb-16
Jul-15

Sep-15
Oct-15
Mar-15

Mar-16
Power CO2 Emissions Coal generation Power CO2 Emissions Coal generation PM 2.5 Gas vs. coal consumption ratio
Gas generation Gas generation

Copyright of Royal Dutch Shell plc Source: Aurora Energy Research; Embassy of the USA – Beijing, China; National Bureau of Statistics of China 21 June 2017 7
One-third of new LNG supply growth already online
LNG volume set to expand 50% from 2014 to 2020

Delivered volume Capacity additions

MTPA MTPA
400 50 100%
Annualized capacity additions

350 Share online

40 80%

300
265 30 60%
250
20 40%
200

10 20%
150

100 0 0%
2006 2008 2010 2012 2014 2016 2018 2020 2015 2016 2017 2018 2019 2020

Source: Shell interpretation of IHS (LNG Waterborne Trade, Liquefaction Projects Database) and Note: only includes projects online by 2016 or currently under construction
Wood Mackenzie Q4 2016 data

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 2016 import growth dominated by China, India & new entrants

Million tonnes
8 Existing demand
New entrants
Net imports vs 2015 = +17.0 million tonnes

0
United Kingdom

United Arab Emirates

France

India

China
Israel
Mexico

Singapore

Jordan
Turkey
Japan

Belgium

Argentina

Netherlands

Malaysia

Canada

Thailand

Jamaica

Puerto Rico

Italy

Egypt
United States

Greece

Lithuania

Taiwan

Indonesia

Pakistan
Colombia

Portugal

Chile

South Korea

Poland

Kuwait

Spain
Brazil

Dominican Republic

-2

-4

Source: Shell interpretation of IHS (LNG Waterborne Trade) data, delivered volumes; red denotes new entrants (2015-2016)

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Growth in LNG demand absorbed increase in supply

Net exports: 2016 YoY Net imports: 2016 YoY

Million tonnes Million tonnes
20 20

15 15

10 10

5 5

0 0

Total exports Australia US Rest of World Total imports Other markets Balancing markets
-5 -5

Source: Shell interpretation of IHS data, delivered volumes

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Robust spot prices reflect the market’s ability to absorb new supply

Global LNG prices ($/MMBTU) Asia spot (JKM as % Brent)

25%
25

20%
20

15 15%

10 10%

5 5%

0 0%
2000 2002 2004 2006 2008 2010 2012 2014 2016 J F M A M J J A S O N D

Energy price range Henry Hub Brent Range 2010-2014 2015 2016
NBP JKM (Platts) Japan LNG Import
Coal (ARA)
Source: Japanese customs data (Japan LNG import), Platts (JKM), ICE (NBP, Brent, ARA coal), NYMEX (Henry Hub)

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Trend to shorter and smaller contracts with emerging buyers

Average contract length, years Average contract volume, MTPA LNG buyer credit ratings
20 2.5 100%

16 2.0 80%

12 1.5 60%

8 40%
1.0

20%
4 0.5

0%
0 0.0

2008

2009

2010

2011

2012

2013

2014

2015

2016
2008

2009

2010

2011

2012

2013

2014

2015

2016

2008

2009

2010

2011

2012

2013

2014

2015

2016
A-rated B-rated Non-investment grade
Source: Shell interpretation of IHS (Energy LNG Sales Contracts
Database), Moody’s and Fitch data Investment grade

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FSRUs reducing the time required to open new LNG markets

FSRU deliveries FSRU capacity Global regas capacity

MTPA FSRU share MTPA
40 12% 80
Existing capacity 10%
35 70 779 mtpa FSRU
10%
30 60
8%
25 50
Under construction &
20 6% 40 40%
under development
FSRU
30 113 mtpa
15
4%
10 20
2%
5 10
Proposed by 2020 45%
0 0% 0 184 mtpa FSRU
2008

2009

2010

2011

2012

2013

2014

2015

2016
2008
2009
2010
2011
2012
2013
2014
2015
2016

North America Europe North America Europe

South America Middle East & Africa South America Middle East & Africa
Asia Asia
Source: Shell interpretation of IHS data
Copyright of Royal Dutch Shell plc 21 June 2017 13
New FIDs required to meet demand growth after 2020

LNG market balance Overview of LNG FIDs

MTPA MTPA
500 50

400 40

300 30

200 20

100 10

0 0
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
2000 2005 2010 2015 2020 2025 2030

In operation Under construction Demand forecasts

Copyright of Royal Dutch Shell plc 21 June 2017 14

Changing drivers of LNG demand growth

LNG imports by role in domestic market (MTPA)

500 Gas market type Countries/regions

Bunker fuel  Atlantic  Middle East  Pacific

Balances LNG market  Northwest Europe
400
LNG replaces  India  Egypt*  Bangladesh*
declining domestic  Thailand  Kuwait  Bahrain*
production into  Indonesia  UAE  Philippines*
300 existing demand  Malaysia  Colombia*  Vietnam*
 Pakistan*
LNG complements  Southern Cone  China  Morocco*
domestic and pipeline  Eastern Europe  Singapore  Jordan*
200
supply  Southern Europe  Israel
 North America

Solely dependent on  Japan  Puerto Rico  Jamaica*

100 LNG  Korea  Dominican  Panama*
 Taiwan Republic

0 Source: Shell interpretation of Wood Mackenzie Q4 2016 data

2000 2005 2010 2015 2020 2025 2030 * Denotes new or emerging LNG importing countries

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 Mismatch between producer needs and buyer needs

SUPPLY PROJECTS TRADITIONALLY BUYERS LOOKING TO REDUCE RISK

UNDERPINNED BY LONG-TERM SALES THROUGH SMALLER PURCHASE COMMITMENTS
What Producers Want What Buyers Want

 Long-term contracts  Mid or short-term contracts

 Larger volume sales  Smaller volume purchases
 Oil or Henry Hub indexed pricing  Transparent prices, linked to downstream exposure
 Offtake certainty  Increased volume flexibility
 Credit worthy buyers  Flexible credit terms

Rationale Rationale

 Uncertainty over future gas demand – total demand

 Financing requirements and buyer’s share
 Large capex commitment with long payback  Uncertainty over future competitiveness of long-term
contracts

Copyright of Royal Dutch Shell plc 21 June 2017 16

LNG to take larger share of European gas demand

European gas supply (bcm)

600
2035 demand forecast range:
540-575 bcm
500

400
LNG
300 Russia pipe

Other pipe
200
Algeria
100
Norway pipe

0 Indigenous production
2010 2015 2020 2025 2030 2035

Source: Shell interpretation of Wood Mackenzie Q4 2016, IHS, and Eurogas data

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Policy and macroeconomics driving gas demand growth in China

China total primary energy demand Gas supply by source 2030, bcm
5% Conventional
11%
Other unconventional
2015 2030 Shale
Russia pipeline imports
Other pipeline imports
LNG imports
Gas Renewables Nuclear Oil Coal
0 50 100 150 200

China’s share of global LNG demand Gas demand potential 2030, bcm
4% Demand forecast
16% 15% gas in energy mix
2015 2030 +1% gas in energy mix
+1% gas demand CAGR
+1% GDP growth rate
//
Source: Shell interpretation of Wood Mackenzie Q4 2016 data 0
400 450 500 550 600 650

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Macroeconomics, urbanization and gas infrastructure build-out underpin demand
growth in India

India gas supply

bcma

140

120

100

80

60

40

20

0
2010 2015 2020 2025 2030
Production LNG imports

Source: Shell interpretation of Wood Mackenzie Q4 2016 data

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21 June 2017 19
Potential demand upside from transport sector

MTPA equivalent, 2025

1400  LNG contributes virtually zero
Heavy duty Marine
sulphur emissions and has reduced
1200
particulates and NOx emissions,
1000
compared to heavy fuel oil.

800  LNG can help reduce the well-to-

wheel emissions compared to
600
conventional fuels.
400

200

0
Heavy duty and marine transport LNG industry LNG for transport -
Forecast range
Source: Shell interpretation of Wood Mackenzie and IHS

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Summary

 Strong growth in LNG supply in 2016, one-third of new supply online

 LNG demand growth from China, India and new entrants absorbed supply growth in 2016
 Continued LNG supply growth to 2020
 Global demand for gas is expected to increase by 2% a year between 2015 and 2030; LNG
is set to rise at twice that rate at 4 to 5%
 Future LNG demand growth will be driven by: policy, floating storage regasification units,
replacing declining domestic gas production, small scale LNG and transport
 LNG and Russian gas imports required to balance European gas demand
 New investments required to meet growing LNG demand after 2020
 LNG trade is changing to meet the evolving needs of buyers, including shorter-term and lower-
volume contracts

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