Global Gas Market Saad Rahim Chief Market Economist

Legal notice Certain statements included in this presentation contain forward-looking information 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 are within BG Group plc’s control or can be predicted by BG Group plc. Although BG Group plc 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 “Principal risks and uncertainties” included in the BG Group plc Annual Report & Accounts 2010. 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. 2

History Demerger and development 1986 1997 BG Plc 1999 2000 2002 2005 BG Group Plc Lattice British Gas www. bg-group. com National Grid Transco National Grid www. nationalgrid. com Centrica www. centrica. com 3

About BG Group • Market leader: – FTSE top ten company – Listed on London Stock Exchange – Market capitalisation • Circa [insert market cap on delivery date] • Gas and oil: – Production circa 70% gas; 30% oil • Global gas major: – Over 6 000 employees; around 65% outside UK. 4

Who we are Distinctive capabilities • Market knowledge and commercial agility • Exploration performance • Fast track development of economic projects • Ten years of industry leading exploration 5

Global portfolio Countries of current operation Norway UK Kazakhstan Italy USA Areas of PA Tunisia Algeria Thailand Trinidad & Tobago Bolivia Chile Argentina India Philippines Egypt Nigeria Brazil Uruguay China Kenya Tanzania Singapore Australia Madagascar BG Group countries BG Group is active in more than 25 countries around the world 6

Strategy Clear, effective and resilient strategy Global Gas Major Connect gas to high-value markets • Build & access markets • Serve customers Secure competitively priced resources • Equity reserves • Contracted resources Skills to succeed across the gas chain Strategy delivering value 7

Introduction & Key Messages • Gas will be the fastest growing hydrocarbon fuel over the next decade • Gas demand in Non-OECD economies is set to grow particularly quickly • China represents the fastest major global growth in gas • Structural trends in Emerging Markets will drive global energy demand • Supply challenges • But potential for new supply? 8

Global Macroeconomic Outlook Real annual GDP growth rate ) 8% Global Emerging markets US EU 6% 4% 2% 0% 2012 2013 Long-term -2% Sources: BG Group interpretation of Credit Suisse, Morgan Stanley, Deutsche Bank, JP Morgan Cazenove 99

Non-OECD Demand Growth 6 000 5 000 4 000 Other renewables Biomass and waste Hydro Nuclear Gas Oil Coal Gas: 6. 0% CAGR Mtoe Oil: 3. 1% CAGR 3 000 2 000 Coal: 3. 7% CAGR 1 000 Source: IEA WEO 2011 2009 2020 Gas will be the fastest growing hydrocarbon in Non-OECD countries 10

China Energy Demand Growth 4 000 3 500 3 000 Mtoe 2 500 Other renewables Biomass and waste Hydro Nuclear Gas Oil Coal Gas: 11. 1% CAGR Oil: 4. 1% CAGR 2 000 1 500 Coal: 3. 2% CAGR 1 000 500 Source: IEA WEO 2011 2009 2020 Gas demand in China will grow 3 x faster than coal and 2 x faster than oil 11

Strong gas demand growth World gas demand (bcma) ) 5000 CAGR 2010 -2020 4000 China 11. 2% Asia (excluding China) 3000 Russia and Central Asia 0. 8% 2000 1000 0 2005 Sources: IEA, BG Group 3. 3% 2010 2015 2020 Middle East & Africa 4. 4% South America 2. 9% North America 2. 1% Europe 0. 1% TOTAL 2. 6% 12

China: Gas Demand Elasticity 3. 5 GDP/Gas Elasticity 3. 0 2008 -18 Average Elasticity: 1. 8 2. 5 2. 0 1. 5 1. 0 0. 5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0. 0 Readings >1. 0 indicate gas demand growing faster than GDP Source: Wood Mackenzie Energy Markets Service; BG Group Chinese gas demand will grow faster than GDP until 2018 13

Development Trajectories 14% Per-capita GDP Growth 12% Korea Japan Thailand USA Turkey China 10% 8% 6% 4% 2% 0% -2% - 10, 000 20, 000 30, 000 40, 000 Per Capita GDP: 2005 USD China’s GDP growth trajectory mirrors those sustained in the past 14

Fuel mix and development Coal Natural Gas 50% 100% 80% Italy/UK 40% South Africa China 30% 60% India 20% Japan/Germany 20% Korea Indonesia USA UK Brazil 20 Thousands India Korea Taiwan Brazil China 10% France 0% - USA Australia Taiwan 40% Indonesia 40 60 Germany France 0% - 10 20 Thousands 30 40 50 Source: BP 2010, Haver Analytics As countries develop, they tend to switch from coal to natural gas 15

Urbanization 1000 905 Million Urban Residents 900 India China 800 700 635 590 600 500 400 365 300 200 100 0 2015 2020 2025 2030 Source: UN Population Division By 2030, 500 million more people will be living in cities in China and India 16

China Vehicle Fleet 300 269 246 Million Highway Vehicles 250 200 150 130 100 50 52 0 2010 2020 2030 US 2010 Source: Argonne National Laboratory China’s vehicle fleet expected to grow 5 x to 2030, by more than current US fleet 17

China & India: Vehicle Growth 500 Million Highway Vehicles 450 400 350 300 China India 250 200 150 100 50 0 2000 2010 2020 2030 2040 Source: Argonne National Laboratory By 2030, China and India alone will have added ~500 million vehicles to the road 18

Residential Gas Penetration 90% 70% Urban Gas Penetration 59% 60% 70% 50% % of population 60% 50% 40% 30% 10% 40% 30% Japan Korea China 0% 10% 0% 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 2024 20% 46% 20% 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 % of homes using gas 80% China Urbanization Source: CEIC, IEA , UN Population Division and BG Analysis Rising urbanization and development levels drive gas usage rates 19

Residential Gas Affordability Comparison 3. 0% 2. 0% 1. 0% 0. 0% China 2005 UK China 2010 Korea China 2025 USA Japan Source: CEIC, EIA, National Sources. Non-China data for 2009 Gas costs are expected to lag income 20

Global gas supply challenge (2010 -2020) (bcma) 5000 4000 900 2. 6% pa 3000 2400 9. 5% pa 1500 2000 3125 1000 0 2010 demand Production decline Sources: BG Group, BG Group interpretation of Wood Mackenzie Demand increase New supply required by 2020 21

Growing LNG demand in 2025 (mtpa) 100 2009 forecast 2011 forecast 75 50 25 0 Japan China Source: BG Group interpretation of Wood Mackenzie 2009 and 2011 forecast India South Korea 2222

Long-term supply challenges Supply prospects for 2020 (mtpa) 600 -17% Speculative Possible 400 Probable Under Construction Onstream 200 0 2007 Source: Wood Mackenzie - LNG Service and Tool 2011 23

Conclusions • Gas and oil demand will continue to grow over the foreseeable future • Structural drivers in Emerging Economies will be critical • Supply challenges potentially exist in both oil and gas • What resources and capabilities does the industry need to cope with these challenges? • Q&A 24