BG Group and Tokyo Gas announcement

March 31, 2010

BG Group and Tokyo Gas sign Heads of Agreement for LNG sale

BG Group today announced it had reached agreement with Tokyo Gas Co., Ltd. ("Tokyo Gas") for the supply of Liquefied Natural Gas (LNG) from the Queensland Curtis LNG ("QCLNG") facility to be developed by BG Group's wholly owned Australian subsidiary, QGC Pty Limited ("QGC").

The overall agreement sets out the basis upon which the parties will negotiate to conclude terms for: 

·; the purchase by Tokyo Gas of 1.2 million tonnes per annum (mtpa) of LNG for 20 years from 2015, to be supplied from the QCLNG facility and from BG Group's global LNG portfolio;

·; the acquisition by Tokyo Gas of a 1.25% interest in the reserves and resources of certain QGC tenements in the Walloons Fairway of the Surat Basin in Queensland; and

·; the purchase by Tokyo Gas of a 2.5% equity interest in QCLNG Train 2, the second of two liquefaction trains which will form the first phase of the QGC-operated QCLNG development.

BG Group and Tokyo Gas intend to complete negotiations and execute fully termed agreements by the end of 2010. The final agreements will be conditional on BG Group making a Final Investment Decision on QCLNG, expected later this year. QCLNG is expected to produce first LNG by 2014.

BG Group Chief Executive Frank Chapman said: "The agreements extend further our long and fruitful relationship with Tokyo Gas, bringing a new source of natural gas to Japan - the world's largest LNG market. Tokyo Gas will become one of our important foundation customers for Queensland Curtis LNG, as we progress rapidly towards project sanction later this year."

The two-train QCLNG development on Curtis Island, near Gladstone, Queensland is firmly underpinned by BG Group LNG agreements to deliver cargoes from both QCLNG and from the Group's global LNG portfolio to customers across the Pacific Basin. Those agreements include:

·; a 20-year 3.6 mtpa sales and purchase agreement with the China National Offshore Oil Corporation, ("CNOOC"), announced March 2010;

·; a 21-year sales and purchase agreement to supply 1.7 mtpa to Quintero LNG in Chile, announced June 2007; and

·; a 20-year agreement to supply up to 3 mtpa to customers in Singapore, announced April 2008.

-ends-

Notes to Editors

BG Group

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 25 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation business interests. 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

Tokyo Gas

Tokyo Gas is Japan's largest city gas supplier, with 10.51 million customers. Its service area encompasses the Tokyo metropolitan area and the surrounding Kanto region, a market with huge demand and high growth potential. As a city gas supplier, it does more than just deliver gas to customers. Its operations extend from participation in upstream LNG projects to transport by LNG tanker, conversion to gas at LNG terminals, gas supply through pipelines, sales of gas appliances, and safety at customer sites. Its establishment of an LNG value chain from upstream businesses to downstream businesses sets it apart from other gas suppliers around the world. (Source: Tokyo Gas)

QGC

QGC Pty Limited ("QGC" - ACN: 089 642 553) is a leading Australian coal seam gas explorer and producer focused on supplying gas to domestic and international markets. A BG Group business, QGC is establishing one of Australia's largest capital infrastructure projects to turn Queensland's world-class coal seam gas reserves into Liquefied Natural Gas (LNG). Queensland Curtis LNG (QCLNG) is a priority project for QGC which involves expanding exploration and development in southern and central Queensland and transporting gas through an underground pipeline network to Curtis Island near Gladstone, where it will be liquefied. For further information: www.qgc.com.au or www.qclng.com.au

Coal seam gas

Natural gas in coals (coal seam gas or CSG) occurs when the coal is formed deep underground by a process of heating and compressing plant matter. The gas is trapped in coal seams (typically 300-600 metres underground) by water pressure and is extracted via wells drilled through the coal seams. The water is pumped out, and the natural gas is released from the coal. The gas is then processed to remove water and piped to compression plants for injection into gas transmission pipelines. Coal seam gas in the Surat Basin of Queensland typically contains more than 98% methane, with very small amounts of nitrogen and carbon dioxide.

Picture Desks

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Contact

Australia 

Mark Todd +61 (0) 417 602 838 [email protected]

Paul Larter +61 (0) 400 776 937 [email protected]

UK

Jo Thethi: +44 (0) 118 929 3110 [email protected]

Investor Relations: +44 (0) 118 929 3025 [email protected]

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 to BG Group's Annual Report and Accounts for the year ended 31 December 2009. 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.