Agreement signed for QCLNG stake sale & LNG supply

7 May 2013

Binding agreements signed for QCLNG stake sale and LNG supply

BG Group today announced it has signed binding agreements with China National Offshore Oil Corporation (CNOOC) for the sale of certain additional interests in the Queensland Curtis LNG (QCLNG) project in Australia for $1.93 billion and for the supply of an additional 5 million tonnes per annum of liquefied natural gas (LNG). Additionally, CNOOC will reimburse BG Group for its share of QCLNG project expenditure incurred from 1 January 2012.

The terms of the documents were laid out in the heads of agreement announced on 31 October 2012*.

At a signing ceremony in Brisbane, BG Group Chief Executive Chris Finlayson said: "These agreements extend our strong relationship with CNOOC, which spans not only LNG but also exploration offshore China and production in the UK Continental Shelf through participation in the large Buzzard oil field.

"As a foundation partner in QCLNG, CNOOC was among the first to recognise the value and strategic importance of this world-first project - a vision that is now coming to fruition as we move towards first LNG in 2014.

"Combined with the 3.6 million tonnes per annum (mtpa) LNG sale agreement signed with CNOOC in 2010, BG Group now has total committed volumes to China of 8.6 mtpa which will make the Group the largest supplier of LNG to the world's fastest growing energy market.

"More broadly, the agreements expand our strong LNG position in the Asia-Pacific region, where we are on schedule with our LNG export project on Curtis Island in Queensland; where we have signed long-term LNG sales contracts with customers in China, Japan and India; and, where we will soon begin importing LNG into Singapore through our position as sole gas market aggregator," Mr Finlayson said.

Under the terms of the agreements:

·; BG Group will sell certain interests in upstream coal seam gas tenements in Australia and a further equity stake in the QCLNG project Train 1 liquefaction facility for $1.93 billion;

·; BG Group will supply CNOOC with a further 5 mtpa of LNG for 20 years beginning in 2015, sourced from the Group's global portfolio;

·; CNOOC will acquire a 40% equity interest in QCLNG Train 1, increasing its equity ownership from 10% to 50%;

·; CNOOC will acquire a 20% interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland, increasing its ownership from 5% to 25%;

·; CNOOC will acquire a 25% equity interest in certain other upstream tenements held by BG Group in the Surat and Bowen Basins, Queensland;

·; BG Group and CNOOC will jointly invest in the construction of two LNG ships in China, adding to the two ships already committed under the LNG agreements signed inMarch 2010; and

·; CNOOC will have the option to participate up to 25% in one of the potential expansion trains at QCLNG.

The agreements exclude any interest in the Train 2 liquefaction facility, transmission pipeline and QCLNG project common facilities.

Completion of the transaction is expected by the end of the year, subject to government, regulatory and other relevant approvals and to the finalising and execution of certain other related documentation.

BG Group's Australian business QGC Pty Limited remains operator and retains majority ownership of the QCLNG project. In particular, BG Group will have:

·; Around 74% of its original interest in the upstream resource and related infrastructure; and

·; 100% of the project's common facilities on Curtis Island (including LNG storage tanks and jetty) and the 540 kilometre natural gas pipeline network linking the gas fields to Curtis Island. Together, these items represent approximately 30% of the estimated 2011-2014 project spend.

-ends-

Notes to Editors:

* http://www.bg-group.com/MediaCentre/Press/Pages/31Oct2012.aspx

BG Group plc (LSE: BG.L) is a world leader in natural gas, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 20 countries on five continents, BG Group has a broad portfolio of business interests focused on exploration and production and liquefied natural gas. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves. For further information visit: www.bg-group.com

There are matters set out within this announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from these forward-looking statements, refer toBG Group's Annual Report and Accounts for the year ended 31 December 2012. BG Group does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

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