Transactions completed with CNOOC

11 November 2013

Transactions completed with CNOOC for QCLNG stake and LNG supply

BG Group today announced it has completed transactions with China National Offshore Oil Corporation (CNOOC) for the sale of additional interests in the Queensland Curtis LNG (QCLNG) project in Australia for US$1.93 billion. Under a separate agreement, BG Group will also supply CNOOC with an additional 5 million tonnes per annum of liquefied natural gas (LNG).

CNOOC has also reimbursed BG Group for QCLNG project expenditure commensurate with its increased interests incurred from 1 January 2012 to 30 September 2013. From 1 October 2013 CNOOC will fund project expenditure commensurate with its new equity holding.

Completion of the deal followed approvals from government, regulatory and other relevant authorities, and execution of related documents.

At the completion ceremony in Brisbane, BG Group Chief Executive Chris Finlayson said: "While today marks the completion of the agreements with CNOOC, it also signals the start of a new chapter in our partnership as we begin commissioning of the world's first coal seam gas to LNG project ahead of first commercial cargo in 2014.

"Our relationship with CNOOC has grown as they increase their investment in our QCLNG project and BG Group becomes the largest supplier of LNG to the world's fastest growing energy market.

"Today's agreements exemplify our strategy to manage our portfolio more actively, monetise assets at different stages in their lifecycle and bring in key partners to accelerate value delivery.

"I would also note that, importantly, the total funds received from the transaction improve our gearing by five percentage points."

The key terms of the transactions are unchanged from those set out in the heads of agreement announced on 31 October 20121, and reiterated at the signing of binding agreements on 6 May 20132;

· 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;

· 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.

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:

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

2 http://www.bg-group.com/MediaCentre/Press/Pages/6May2013.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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