Sin ingapore: <Title of Presentation> Emergence of of a a - PowerPoint PPT Presentation

17 th 17 th INT INTERNATIONAL CO CONFERENCE & EXH XHIBITION ON ON 17 th INTERNATIONAL CONFERENCE & EXHIBITION LI LIQUEFIED NA NATURAL GAS GAS (LN (LNG 17 17) ON LIQUEFIED NATURAL GAS (LNG 17) Sin ingapore: <Title of Presentation> Emergence of of a a new ew LNG mar arket <Title of Presentation> By: <Author Name>, <Organization> By: <Author Name>, <Organization> By: Dr. Anthony Barker, BG Group <Date> <Date> 16 April 2013

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 2011 fuel mix for 2011 gas demand 2011 gas supply electricity generation 4.0% 3.6% 15.9% 18.4% 20.3% 84.1% 75.7% 78.0% Power Indonesia Natural gas Power Indonesia Natural Gas Industry Malaysia Petroleum products Industry Malaysia Petroleum Products Other Others Other Others Source: Wood Mackenzie, November 2012 & EMA Singapore Energy Statistics Report 2012

Consolidating demand • Marketing multiple gas sales Singapore LNG demand contracts 3.5 • Inventory management and 3.0 24/7 commercial operations 2.5 • Market development 2.0 mtpa 1.5 1.0 0.5 0.0 2013 2014 2015 2016 Sources: BG Group estimates 2012,Schlumberger Business Consulting, 2009

Meeting Singapore’s challenges Energy Market Authority of Singapore Terminal owner (Singapore LNG) LNG supplier Aggregator Gas buyers (BG Group) (BG Group) Source: BG Group, 2012

BG Group’s LNG marketing mtpa Singapore Henry Hub Source: BG Group Strategy Presentation, February 2012

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

Policy and regulatory support Incremental gas generation EMA initiatives and policies capacity 4,000 3,500 3,000 2,500 MW 2,000 1,500 1,000 • Pipeline gas moratorium 500 • Vesting contracts 0 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 • SLNG step-in and underwriting Source: Tri-Zen Consulting, BG Group estimates, May 2012

Long-term sales • 3 mtpa exclusive franchise Long-term sales projection 3.2 to supply Singapore 3.0 • Approx 2.6 mtpa 2.8 contracted with 10 – 20 2.6 mtpa year supply periods 2.4 • 10 gas buyers and ~15 2.2 GSAs 2.0 1.8 1.6 Q1 2010 Q4 2010 Q3 2011 Q2 2012 Q1 2013 Q4 2013 Q3 2014 Q2 2015 Source: BG Group, November 2012

Singapore franchise state of play 3.50 3.00 2.50 mtpa 2.00 1.50 1.00 0.50 0.00 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 Contracted Long-term Sales Remaining sales (3 mtpa franchise forecast) Source: BG Group, November 2012

Long-term sales • BG Group has contracted at 12.0 three long-term price tranches 10.0 • Singapore’s power market 8.0 mtpa is now well supplied with 6.0 long-term volumes 4.0 • Buying interest seen from 2.0 2018 onwards 0.0 2013 2015 2017 2019 2021 2023 2025 – Replacement of expiring pipeline gas import contracts Incremental demand – Demand growth driven by Sumatra pipeline gas replacement Natuna pipeline gas replacement industry Malaysia pipeline gas replacement BG Group franchise

Short-term supply security Available volumes for short-term sales 3.5 3.0 2.5 2.0 mtpa 1.5 1.0 0.5 0.0 2013 2014 2015 BG Group committed volumes Potential for short-term sales Source: BG Group, December 2012

Short-term sales • Through 2012, BG Group worked 2013 volumes closely with the regulator (EMA) to develop: 21% – Standardised master short-term GSAs – ‘Stand alone’ short -term GSAs • Short-term interest driven by: 79% – Ramp up and commissioning requirements – Operational concerns Long-term sales – Commercial opportunities to access Short-term sales spot LNG – Pipeline gas displacement – Power market opportunities

Consolidating demand Aggregator's short-term and spot GSAs 0.2 0.18 2 cargoes 3 cargoes 0.16 0.14 0.12 mt 0.1 0.08 0.06 1 cargo 0.04 0.02 0 GSA1 GSA2 GSA3 GSA4 GSA5 Cargoes

Market development Relative pricing of Spot LNG fuel oil & Brent 300 Electricity Malaysia procurement piped gas 250 2005 = 100 200 Singapore Term Fuel oil & LNG 150 oil products 100 2005 2006 2007 2008 2009 2010 2011 2012 LNG Indonesia inventory piped gas Fuel oil Brent Source: BG Group, November 2012

Singapore market overview 16 14 12 10 mtpa 8 6 4 2 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Aggregator franchise – long-term contracted supply Aggregator franchise – 3 mtpa Long-term supply opportunities (EMA consultation paper) Short-term supply opportunities Terminal max throughput – facilities under construction Gas demand (EMA consultation paper) Sources: BG Group estimates, November 2012 & EMA procurement framework consultation paper, March 2012

Pipeline gas displacement • LNG is competitive against pipeline gas in Singapore • Spot LNG prices regularly Spot LNG prices support short-term displacement of pipeline gas with LNG Pipeline gas displacement Pipeline gas prices

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 ongoing development of Singapore gas market