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By: <Author Name>, <Organization> <Date>

17th INTERNATIONAL CONFERENCE & EXHIBITION ON LIQUEFIED NATURAL GAS (LNG 17)

Sin ingapore: Emergence of

• f a

a new ew LNG mar arket

By: Dr. Anthony Barker, BG Group 16 April 2013 17 17th

th INT

INTERNATIONAL CO CONFERENCE & EXH XHIBITION ON ON LI LIQUEFIED NA NATURAL GAS GAS (LN (LNG 17 17)

Legal notice

The following presentation contains forward-looking statements concerning BG Group plc’s strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which BG Group plc operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which can be controlled or predicted. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been

• correct. Actual results could differ materially from the guidance given in this presentation for a

number of reasons. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the “Principal risks and uncertainties” included in the BG Group plc Annual Report & Accounts 2011. Nothing in this presentation should be construed as a profit forecast and no part of this presentation constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. BG Group plc undertakes no obligation to update any forward-looking statements. No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this presentation and no responsibility or liability is or will be accepted by BG Group plc or any of its respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) in relation to it.

Singapore’s challenges

Source: Wood Mackenzie, November 2012 & EMA Singapore Energy Statistics Report 2012

75.7% 20.3% 4.0% 2011 gas demand Power Industry Other 84.1% 15.9% 2011 gas supply Indonesia Malaysia 78.0% 18.4% 3.6% 2011 fuel mix for electricity generation Natural Gas Petroleum Products Others Power Industry Other Indonesia Malaysia Natural gas Petroleum products Others

Consolidating demand

• Marketing multiple gas sales

contracts

• Inventory management and

24/7 commercial operations

• Market development

Sources: BG Group estimates 2012,Schlumberger Business Consulting, 2009

Singapore LNG demand 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2013 2014 2015 2016

mtpa

Meeting Singapore’s challenges

Source: BG Group, 2012

Aggregator (BG Group) Terminal owner (Singapore LNG) Energy Market Authority of Singapore Gas buyers LNG supplier (BG Group)

BG Group’s LNG marketing

Henry Hub mtpa Singapore

Source: BG Group Strategy Presentation, February 2012

Global assets, supply and markets

* Exclusive right to supply Potential liquefaction Existing long term supply source Liquefaction under construction Equity position Existing import capacity Long term customer UK USA Nigeria Egypt Trinidad & Tobago EG Chile Singapore* Australia Tanzania Canada China Japan Brazil India

• Pipeline gas moratorium
• Vesting contracts
• SLNG step-in and

underwriting

Policy and regulatory support

EMA initiatives and policies 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 MW Incremental gas generation capacity

Source: Tri-Zen Consulting, BG Group estimates, May 2012

Long-term sales

• 3 mtpa exclusive franchise

to supply Singapore

• Approx 2.6 mtpa

contracted with 10 – 20 year supply periods

• 10 gas buyers and ~15

GSAs

Long-term sales projection

Source: BG Group, November 2012

1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 Q1 2010 Q4 2010 Q3 2011 Q2 2012 Q1 2013 Q4 2013 Q3 2014 Q2 2015 mtpa

Singapore franchise state of play

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Remaining Sales (3mtpa Franchise Forecast) Contracted Long-term Sales mtpa

Source: BG Group, November 2012

Contracted long-term sales Remaining sales (3 mtpa franchise forecast)

Long-term sales

• BG Group has contracted at

three long-term price tranches

• Singapore’s power market

is now well supplied with long-term volumes

• Buying interest seen from

2018 onwards

– Replacement of expiring pipeline

gas import contracts

– Demand growth driven by

industry 0.0 2.0 4.0 6.0 8.0 10.0 12.0 2013 2015 2017 2019 2021 2023 2025 mtpa

Incremental demand Sumatra pipeline gas replacement Natuna pipeline gas replacement Malaysia pipeline gas replacement BG Group franchise

Short-term supply security

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2013 2014 2015 mtpa

Source: BG Group, December 2012

Available volumes for short-term sales BG Group committed volumes Potential for short-term sales

Short-term sales

79% 21% 2013 volumes

• Through 2012, BG Group worked

closely with the regulator (EMA) to develop:

– Standardised master short-term GSAs – ‘Stand alone’ short-term GSAs

• Short-term interest driven by:

– Ramp up and commissioning

requirements

– Operational concerns – Commercial opportunities to access

spot LNG

– Pipeline gas displacement – Power market opportunities

Long-term sales Short-term sales

0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 0.2 GSA1 GSA2 GSA3 GSA4 GSA5 Cargoes mt

Consolidating demand

Aggregator's short-term and spot GSAs

1 cargo 2 cargoes 3 cargoes

Market development

Source: BG Group, November 2012

Singapore

LNG inventory Term LNG Fuel oil &

• il products

Indonesia piped gas Malaysia piped gas Spot LNG Electricity procurement

100 150 200 250 300 2005 2006 2007 2008 2009 2010 2011 2012 2005 = 100 Relative pricing of fuel oil & Brent Brent Fuel oil

Singapore market overview

• 2

4 6 8 10 12 14 16 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 mtpa

Sources: BG Group estimates, November 2012 & EMA procurement framework consultation paper, March 2012

Aggregator franchise – long-term contracted supply Long-term supply opportunities (EMA consultation paper) Aggregator franchise – 3 mtpa Short-term supply opportunities Gas demand (EMA consultation paper) Terminal max throughput – facilities under construction

Pipeline gas displacement

• LNG is competitive against

pipeline gas in Singapore

• Spot LNG prices regularly

support short-term displacement of pipeline gas with LNG

Pipeline gas prices Spot LNG prices

Pipeline gas displacement

Market development LNG reloads

• Physical reload capability

enables break bulk trans-shipment

• Demand side interest in LNG

reloads for various regional markets

• Early stage assessment of

LNG bunkering under way

SLNG full development Source: EMA.gov.sg

Conclusions

• Close cooperation among

BG Group, SLNG and EMA

• Aggregator model tailor made

to meet Singapore’s gas market challenges. It could be adapted to introduce LNG to new markets

• BG Group is committed to
• ngoing development of

Singapore gas market