Domestic Gas Key Principles Summary confidential

1. “Back-to-Back” Aggregator Commercial Framework – ENH in its role as Aggregator by law, shall enter into one (or more) domestic gas sales and
purchase agreement(s) (SPAs) with each Upstream supplier, subject to the concurrent execution of one (or more) Downstream SPAs between ENH
and one (or more) designated domestic gas project(s), which shall be “back-to-back” with such Upstream SPA(s) on otherwise the terms and
conditions. The design and operation of this “Back-to-Back” Aggregator commercial model (“Model 3”) has been discussed in full detail in the JTF.

2. Cost-Plus Domestic Gas Pricing – The domestic cost-plus gas pricing methodology and process as elaborated on in detail in the JTF shall be applied
to the pricing of all domestic gas supplies.
a. The domestic gas price shall be a fixed number determined according to this cost-plus pricing methodology and shall not be indexed and/or
actualised.
b. The cost base to be used in this methodology shall be a reasonable estimate (based on the final EPC bid as submitted for Government
approval) of the total upstream unit capex and opex costs averaged over the total feedgas supply base (incl. LNG and domestic gas feedgas
supply capacity) up to the domestic gas delivery point.
c. Unit capex shall be calculated on the basis of facilities’ design capacities and unit opex on the basis of assumed total production.
d. A credit shall be included for condensate sales on the basis of an assumed condensate yield and basis a medium crude price scenario.
e. The return on investment to be used in this methodology shall be the upstream opportunity costs for stranded gas which is equal to the risk
adjusted cost of capital (WACC) taking into account the low domestic gas volumetric offtake risk (“take-or-pay”), low payment risk and the
absence of price risk.
f. The economic model shall be on an ungeared basis.
g. The domestic gas price shall be regulated, i.e. the domestic gas price shall finally be decided on by the Government on the basis of the cost-
plus pricing methodology which shall be embedded in Domestic Gas Regulations.

3. SPA Key Term Sheet – The terms and conditions of the domestic gas SPAs shall be reasonable, equitable and consistent with general industry
practice and shall be based on the latest standard domestic gas SPA Key Term Sheet that was jointly developed in the JTF, suitably tailored to
specific circumstances only.

4. Domestic Gas Regulations - The Government shall develop specific Domestic Gas Regulations, complementing relevant domestic gas provisions in
the current regulatory and contractual framework in Mozambique, with the aim to provide a domestic gas regulatory framework which is
transparent and clear, consistent, fair and impartial and easy to implement and supervise. The preliminary scope of such regulations has been
shared in the JTF, and, amongst others, is expected to include specifics on domestic gas master planning, the responsibilities of the various
Government institutions as regards domestic gas, the Aggregator’s roles and responsibilities, the Aggregator commercial model, the basis for gas
SPAs and the domestic gas pricing methodology and process. The Government will work in close collaboration with all stakeholders to ensure the
Domestic Gas Regulations are fit-for-purpose.