BG North America

Energy Conference 2008Energy Information AdministrationElizabeth Spomer • Washington D.C. • 7 April 2008

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Legal notice

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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 “Risk Factors”included in the BG Group plc Annual Report & Accounts 2007. 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.

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The Future of LNG: Growth Spurts or Growing Pains?

• Industry background

• BG’s US experience (2002 – present)

• Key issues

• The future

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US LNG imports – the story so far ....

Trinidad & Tobago imports signalled a new era

0

20

40

60

80

100

120

Jan-

73

Jan-

75

Jan-

77

Jan-

79

Jan-

81

Jan-

83

Jan-

85

Jan-

87

Jan-

89

Jan-

91

Jan-

93

Jan-

95

Jan-

97

Jan-

99

Jan-

01

Jan-

03

Jan-

05

Jan-

07

Other (includes Qatar, Egypt, EG, Nigeria)

Trinidad

Algeria

US LNG imports by source

Bcf

/ m

onth

Source: DOE 2007

5

0

50

100

150

200

250

300

350

40019

65

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

North America

Europe

Asia Pacific

mtp

a Industry inflection point

(LNG growth 2005 – 2012 CAGR 12% with NA)

(LNG growth 1980 – 2004 CAGR 7%)

US market uplifted industry growth

Source: CEDIGAZ World Outlook (1999), BP Statistical Review (1999-2006) and Wood Mackenzie (Sept 2007) demand outlook

(LNG growth 2005 – 2012 CAGR 9% w/o NA)

LNG trade growth

6

Operational & planned

US LNG market – engine of growth 2002+

Total LNG = 96.5 mtpa

Tangguh 3.3

mtpa Skikda 1.2

ALNG t 4 5.2NLNG t 6,7 12.0

ELNG t 2 3.6

Snohvit t 1 1.8

RasGas t 6,7 15.6

EG t 1 3.7

Qatargas t 6,7 15.6

Brass LNG t 1, 2 10.0OK LNG t 1, 2 11.0

Gassi Touil 4.0

Yemen t 1,2 4.5Angola t 1 5.0

Supply projects

KeyOperational Planned

Underconstruction

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US

Atlantic Basin Pacific Basin

US LNG market – a global sink/source

US emerging as global LNG balancing market

USN.E. Asia

India

Europe

UK

China

• Strong seasonal pull• Spot at premium prices

• Deep, liquid market• Spot sink/source

• Strong seasonal pull• Spot at premium prices

• Deep, liquid market• Spot sink/source

US as balancing marketat present near future

?

Brazil

Chile

Traded markets

Bilateral markets

Other markets

8

Exogenous factors

High oil / gas prices

Supply tightness

Globalization of trade

All driving arbitrage opportunities

Natural Gas prices – various markets

Market price overlap – global arbitrage opportunities emerging

0

2

4

6

8

10

12

14

16

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

$/m

mB

tu

UK (NBP)US (HH) Japan Ex Regas Japan (JCC)

Limited arbitrage

opportunity

Arbitrage opportunities

Data: JCC (Bloomberg), Japan EX Regas (BG est.), NBP (IPE), HH (NYMEX)

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Lake Charles import terminal

Flexible center of an evolving industry

10

0

10

20

30

40

50

60

70

80

90

100

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

tO

ctN

ovD

ec Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

tO

ctN

ovD

ec Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

tO

ctN

ovD

ec Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

tO

ctN

ovD

ec Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

tO

ctN

ovD

ec Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

tO

ctN

ovD

ec Jan

Feb

Mar

2002 2003 2004 2005 2006 2007 2008

Bcf

Lake CharlesElba Island, GACove Pt + Everett + Energy Bridge

Source: US Department of Energy (2002 to Jan 2008), Waterborne (Feb & Mar 2008)

US LNG imports 2002 – 2008

US as the balancing market in action

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US as part of the global marketplace

Algeria

Australia

Egypt

Equatorial Guinea

MalaysiaNigeria

Trinidad & Tobago

OmanQatar

Belgium

Japan

FranceItaly

Mexico

Norway*

South KoreaSpain

Taiwan

TurkeyUAE

US

UK

India

Puerto Rico

BG’s US imports BG’s sales

*Commissioning cargo

Evidence of US emergence in global marketplace

2002 – Present

10 Suppliers

14 Markets

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Issues – FERC agenda Nov. 2007

• LNG’s role in US gas supply

• How does the US currently obtain the LNG it needs?

• Is there a need to change LNG procurement in the US?

• If so, what is needed to encourage contractual arrangements for LNG supply that will meet expected US demand for natural gas?

• Is imported LNG a dependable supply source?

• How is the U.S.’s role in the world LNG market changing?

Is the glass is half empty ?

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Where will all the LNG go?

2006 seasonality superimposed on 2010 demand

2010 view of the global LNG balance

Source: Wood Mackenzie (2006), BG

0

Jan

Mar

May Ju

l

Sep Nov

Other

Mexico (east)

UK

EU Main

China

India

Taiwan

S Korea

Japan

Supply

10

20

30

40

bcf/d

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US is the world’s LNG balancing market

NA inflow (spot)/outflow (divert) by month

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2

4

6

8

10

Jan

Feb

Mar Apr

May Jun

Jul

Aug

Sep Oct

Nov

Dec

NA contracted* (3.0 tcf)

NA imports (2.6 tcf)

2010 estimated North American LNG volumes by month

*Excludes Altamira Source: Wood Mackenzie (2006), BG

Spot inflows observed during the summer

bcf/d

15

N America – LNG contracted*

Japan (LNG imports)

Can/Mex

US LNG imports

N America – LNG imports

US gas via

Can/Mex

0

2

4

6

8

10

12

14

16

1820

00

2005

2010

2015

2020

bcf/d

US LNG imports

Source: Wood Mackenzie (2007), BG

…Worlds largest LNG consumer by middle of next decade ?

*Includes existing and likely HoAs

BG North America

Thank you