Dragon LNG Terminal Presentation 11 Feb 2009 Agenda

Dragon LNG Terminal Presentation 11 Feb 2009

Agenda Introduction Development Overview Anti Hoarding Mechanism 2

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) − 4 Gas, Netherlands (20%owner) § Primary Shippers − BG (50%) − Petronas (50%) 3

Agenda Introduction Development Overview Anti Hoarding Mechanism 4

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 5

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Agenda Introduction Development Overview Anti Hoarding Mechanism 7

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 8

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 9

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 10

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 Auction Code Agreement Qualified Auction announced on Dragon website and e-mail sent to Qualified Bidders with indicative reserve price D -12 days Deadline for Qualified Bidders to send final bids including signed deal sheet and hard copy of short term LC D -9 days 11 D -8 days Scheduled Day of Arrival and unloading of Third Party Shipper’s vessel Primary Shipper empties tanks at Dragon in order to accommodate winning bidder LNG cargo Delivery of gas to the third party Customer at the NBP D 0 days D +10 days