Dragon LNG Terminal Presentation

11 Feb 2009

2

Agenda

Introduction

Development Overview

Anti Hoarding Mechanism

3

Dragon LNG – Shareholders

Dragon LNG Limited is a single purpose joint venture company

Dragon LNG Limited will build, own and operate the LNG Import Terminal

Shareholders:− BG Group, UK (50% owner)− Petronas, Malaysia (30% owner)− 4Gas,Netherlands (20%owner)

Primary Shippers− BG (50%)− Petronas (50%)

4

Agenda

Introduction

Development Overview

Anti Hoarding Mechanism

5

Development Overview

Development Phase

Initial studies 2001

BG and Petronas joined the JV 2004

Planning Consent and Hazardous Substances consent granted 2004

Implementation Phase EPC Contract awarded 2004

Construction started 2005

Commissioning 2009

6

7

Agenda

Introduction

Development Overview

Anti Hoarding Mechanism

8

Anti hoarding mechanism: Background

Dragon granted exemption from regulated TPA February 2005− Ofgem granted exemption on understanding that Dragon would be “providing facilities for

secondary trading and anti-hoarding mechanisms”

BG and Petronas as Primary Shippers have right to sell capacity to third parties (secondary trading)

A “last resort” product - only needed if Primary Shippers not using capacity or bilateral secondary trading negotiations not concluded

Primary Shippers involvement is critical given need to empty storage tanks

Dragon and the Primary Shippers have developed an effective anti hoarding mechanism− Worked with regulatory consultants to ensure best practice

9

Anti hoarding mechanism: Product Design

FIRM PRODUCT: Consisting of berth slot with equivalent storage and send out− Each Primary Shipper (BG or Petronas) responsible for managing and auctioning their own berth

slots

BILATERAL CONTRACT: Agreement between relevant Primary Shipper (BG or Petronas) and third party, avoids 3 way agreement with Dragon.

SPACE: Primary Shipper will ensure there is sufficient space in the tank to accept a cargo

DELIVERY: Primary Shipper will take delivery of LNG at the import terminal

REDELIVERY: Gas will be redelivered to the third party customer at the NBP on a flat basis over a 10 day period after the vessel has completed offloading− Third party does not need to book UK entry capacity − Simple pass through of transport related charges

10

Anti hoarding mechanism: Main Documentation

“Plain English” Guide to the Dragon anti hoarding mechanism− Will be available on the website− Explains first steps to become qualified

Confidentiality Agreement / Customer Information Form− Available on the website− Required to proceed to qualification

Auction Code− Details qualification procedures and auction processes− Includes Form of Letter of Credit, Form of Final Offer (bid) etc.

LNG and Gas Delivery Terms and Conditions− Contract between winning bidder and providing Primary Shipper

11

Anti hoarding mechanism: Sales Mechanism PRE-QUALIFICATION: Only Qualified Bidders can participate in auctions

− Third Party applicants can become qualified bidders with a Primary Shipper at any time subject to meeting the Primary Shipper’s criteria (e.g. credit, vessel vetting)

− Information to start qualification process will be available on website

AUCTION: Qualified Bidders will be notified of an auction at least 12 days before the slot− Timetable varies according to business days− Auction specific details including timetable, reserve price, etc. notified to Qualified Bidders− Each Primary Shipper sets the reserve price for its slots; this takes into account the market value

of the slot and the cost of emptying tanks

BIDDING: Bidders for a slot will need to specify volumes, quality, vessel, source etc.

NOTIFICATION: Winner notified at least 8 days before relevant berth slot

“Plain English Guide”

Confidentiality Agreement

D -12 days

Auction Code

Qualified

D -9 days

D -8 days

D 0 days D +1 days

D +10 days

Deadline for Qualified Bidders to send final bids including signed deal sheet and hard

copy of short term LC Primary Shipper empties tanks at Dragon in order to

accommodate winning bidder LNG cargo

Scheduled Day of Arrival and unloading

of Third Party Shipper’s vessel

Delivery of gas to the third party Customer at the NBP

Auction announced on Dragon website and e-mail sent to Qualified

Bidders with indicative reserve price