LIQUEFIED NATURAL GAS LIMITED A.B.N

LIQUEFIED NATURAL GAS LIMITED A.B.N 19 101 676 779 QUARTERLY REPORT FOR THE PERIOD ENDED 31 DECEMBER 2006 QUARTER HIGHLIGHTS Execution of a Cooperation Agreement with the National Iranian Oil Company for the proposed supply of up to 530 million standard cubic feet of gas per day for the proposed 3.45 million tonnes per annum (mtpa) LNG Plant on Qeshm Island, Iran. First supply of LNG is planned for first quarter 2010. Further progress to access gas within the Australasian region in order to supply Kitimat LNG with 1.8 mtpa, pursuant to the Heads of Agreement signed in the September 2006 quarter. Continued development of a 1.8 mtpa LNG project with Golar LNG, being one of the five prospective projects nominated in the joint Collaboration Agreement. Evaluation of several new LNG project opportunities and farm in opportunities for the Company s wholly owned subsidiary Gas Link Global Limited. Newspaper reports that PT Pertamina (Persero) had selected Mitsubishi Corporation to join them in a proposed 2 mtpa LNG plant using gas from the Senoro and Matindok gasfields in Central Sulawesi, Indonesia. The Company has issued a letter of concern in relation to the newspaper reports referring to commitments given by all parties under, and subsequent to, the Exclusivity Agreement signed in May 2005. 1

1. LNG PROJECTS 1.1 The Company is pleased that as foreshadowed during the September quarter, a Co Operational Agreement was signed with the National Iranian Oil Company (NOIC) for gas supply to the proposed Qeshm LNG Project. In addition, further progress was made on a 1.8 mtpa LNG project being one of five prospective projects identified in the Collaboration Agreement executed with Golar LNG. Development planning is continuing with the other four prospects. All these prospective targets are located in different countries and have LNG production capacity in excess of 1 mtpa. Evaluation studies are also underway on a further five onshore LNG opportunities. The Company is continuing to monitor the progress by Pertamina and Medco in relation to the preferred partner to develop the Padang LNG Project in Central Sulawesi, Indonesia; following reports that Mitsubishi Corporation has been selected as the LNG partner. Any final decision by the gas suppliers will require Government of Indonesia approval and the Company has been actively representing its concerns in relation to the selection process, prior commitments pursuant to the Exclusivity Agreement signed in May 2005 and given subsequently, on the basis of which the Company expended considerable funds in good faith, and the significant loss of revenue to the Government of Indonesia due to the continuing project delays. 1.2 Qeshm LNG Project, Iran During the quarter, the Company signed a Cooperation Agreement with the NIOC for the supply of up to 530 million standard cubic feet of gas per day for the proposed 3.45 mtpa LNG plant. The gas will be supplied from the 5 trillion cubic feet (tcf) Gashu gas resource, located on shore mainland Iran and ~ 40 kilometers from the proposed LNG plant site on Qeshm Island. A second gasfield, the 1.5 tcf Salakh gasfield located on Qeshm Island, is also available to be developed to supply gas feedstock for a 1.15 mtpa LNG train. Qeshm Island is located in the Straits of Hormuz, at the mouth of the Persian Gulf, providing easy shipping access to the SubContinent, Europe, East Africa and West Asian regions. LNG produced by the Qeshm LNG Project is designated for sale to Southern India, East Africa, Europe and North Asia. During the quarter the Company actively pursued development discussions for an LNG receiving and regasification facility with the Indian regulatory authorities. The template being developed for the Indian port of Mangalore can be used in other locations such as Tuticorin and Nagapattinum (India) and Mombassa (Kenya). The proposed markets in Europe and North Asia either have existing LNG receiving terminals, or terminals are under construction. The Company s proposed 35% partner in the Qeshm LNG Project is the Civil Pension Fund Investment Company (CPFIC), which was established in June 1988, with a very specific mandate to engage in investing activities both on and off the Tehran Stock Exchange, including direct investment in downstream oil and gas projects such as the Qeshm LNG Project. 2

The Company is currently: Reviewing all relevant information on the Gashu and Salakh gasfields; Preparing a Master Development Plan for the gasfields; Reviewing the proposed Buy Back Agreement in relation to the Master Development Plan and Gas Sales Agreement for supply of gas to the LNG Plant; Finalizing selection of a suitable LNG plant site within the preferred location on Qeshm Island, either at or close to the existing under utilized Kaveh jetty that is suitable for LNG ships; and Progressing the securing of LNG offtake agreement. For details on the Qeshm Island gasfields and location, refer to the Company s website: http://www.lnglimited.com.au/qeshm.htm 1.3 Padang LNG Project, Central Sulawesi, Indonesia As advised to shareholders on the 12 December 2006, reports in industry newspapers stated that PT Pertamina (Persero) had selected Mitsubishi Corporation to join them in a proposed 2 mtpa LNG plant in Central Sulawesi. The plant is to be supplied gas from the Matindok gasfield, wholly owned by PT Pertamina and the nearby Senoro gasfields jointly owned by PT Pertamina and PT Medco E&P. As at the date of this report, no formal announcement has been made in relation to the proposed partner, LNG project capital cost and schedule for first LNG supply. The Company is maintaining an active presence in Jakarta in relation to the LNG project and will continue to monitor developments and progress its concerns, with PT Pertamina, PT Medco E&P and the Government of Indonesia, as to the nature of the selection process; significant funds and time expended by the Company in good faith, based on commitments given under and subsequent to the May 2005 Exclusivity Agreement (in relation to the Senoro gasfields) and the apparently significantly higher capital cost and longer development schedule (relative to the Company s proposal) as communicated in media reports. During this holding period, the Company has also been reviewing other opportunities within Indonesia using the substantial development and engineering work undertaken for the Padang LNG Project, which can readily be applied to these and other onshore based LNG projects; resulting in the fast track monetization of existing proven gas resources. For further details on the SenoroToili and Matindok gasfield and location, refer to the Company s web site: http://www.lnglimited.com.au/s_project_o.htm 3

1.4 Other LNG Projects and Markets. The Company continues to progress a total of ten LNG project opportunities and plans to commence feasibility studies on several of these during the March quarter. Specific project opportunities will be advised once approved by the Board for development. 2 GAS RESOURCE ACCESS During the quarter the Company evaluated a number of new gas feedstock sources within the Australasian region to support the potential development of LNG projects to supply the proposed Kitimat LNG terminal in Canada and markets within Asia. 3 GAS LINK GLOBAL LIMITED Gas Link Global Limited has increased its activities towards direct investment in proven gas discoveries and exploration opportunities where such investments are considered appropriate, to assist bring the gas discovery into production and provide gas feedstock for the proposed development of LNG production plants by the Company. Gas Link Global Limited is currently owned 100% by the Company. Planning is continuing to undertake an Initial Public Offering for Gas Link Global Limited during 2007. 4 LNG TECHNOLOGY The Company will provide further details on it s technology selection for each project when final contracts have been signed. However, in relation to the Qeshm LNG Project the Company plans to use its own technology incorporating the use of ammonia absorption technology and/or lithium bromide technology in the precooling phase of LNG production. 5 EXPLORATION EXPENDITURE No exploration expenditure was incurred by the Company during the quarter. 4

6 CORPORATE 6.1 Golar LNG Limited The Company continues to work closely with its major shareholder, Golar LNG Limited in all its activities. Golar LNG Limited (www.golarlng.com) is the world s largest independent owner of LNG ships with over 30 years experience in the global LNG industry. They are the only shipping company dedicated exclusively to LNG transportation and are recognized market leaders. Golar LNG Limited is listed on the OSLO and NASDAQ Stock Exchanges. The Company considers that the financial strength of Golar LNG Limited, with total assets exceeding US $2.3 billion, and its associated companies, adds significant value to the Company s midscale LNG strategy and greatly enhances the Company s ability to successfully conclude development opportunities. 6.2 Unlisted Options: As at 31 December 2006 the Company had issued 11,300,000 unlisted options under its Option Plan Rules, which permit the Company to issue options in aggregate (in number) up to 15% of the Company s total issued fully paid (representing maximum permitted options of 17,604,015 as at 31 December 2006). 7 CAPITAL STRUCTURE (as at 31 December 2006) Class of Security Issued Quoted Escrowed Fully Paid Ordinary Shares 117,360,100 117,360,100 B Class 12 Redeemable Preference Shares (refer Note) Options Issued 11,300,000 Note: Each B Class Redeemable Preference Share (B Pref) is convertible into 1,000,000 fully paid ordinary shares on the Company s achievement of the prescribed milestones. Pending conversion each B Pref confers on its holder one vote which has the same rights as a fully paid ordinary share in the circumstances set out in ASX Listing Rule 6.3 and no voting rights in any other circumstances. 8 APPENDIX 5B (Cash Flow, Securities and Compliance Statement) Attached to this quarterly report. 5

9 CORPORATE INFORMATION AS AT 31 DECEMBER 2006 ASX Code: LNG Directors: Phillip John Harvey Fletcher Maurice Brand Richard Jonathan Beresford William Thomas Hornaday Gary Malcolm Smith Paul William Bridgwood Norman Marshall Nonexecutive Chairman Managing Director/Chief Executive Officer Nonexecutive Director Nonexecutive Director Nonexecutive Director Director/Chief Technical Officer Director/Chief Financial Officer Company Secretary: Norman Marshall Registered Office: Ground Floor, 5 Ord Street, West Perth 6005, Western Australia Telephone: (08) 9366 3700 Facsimile: (08) 9366 3799 Email: LNG@LNGlimited.com.au Website: www.lnglimited.com.au Substantial Shareholders (as at 31 December 2006): Golar LNG Limited Sasigas Nominees Pty Ltd <Fletcher M Brand Family A/C> Paul William Bridgwood 6

Appendix 5B Mining exploration entity quarterly report Name of entity LIQUEFIED NATURAL GAS LIMITED ABN Quarter ended ( current quarter ) 19 101 676 779 31 DECEMBER 2006 Consolidated statement of cash flows Current quarter Year to date Cash flows related to operating activities (6months) 1.1 Receipts from customers 1.2 Payments to suppliers and employees (a) project development (b) administration and others (819) (340) (1,588) (648) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 178 365 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other R&D tax concession rebate 315 Net operating cash flows (981) (1,556) Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other : fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets (12) 1.10 Other (provide details if material) (48) Net investing cash flows (12) (48) 1.11 Total operating and investing cash flows (carried forward) (993) (1,604) 7

1.11 Total operating and investing cash flows (brought forward) (993) (1,604) Cash flows related to financing activities 1.12 Proceeds from exercise of share options 117 155 Less : Share issue costs 1.13 Proceeds from sale of forfeited shares 1.14 Proceeds from borrowings 1.15 Repayment of borrowings 1.16 Dividends paid 1.17 Repayment of finance lease principal & interest (2) (4) 1.18 Loans to other entities 1.19 Loans repaid by other entities Net financing cash flows 115 151 Net increase (decrease) in cash held (878) (1,453) 1.20 Cash at beginning of quarter/year 12,352 12,927 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter 11,474 11,474 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter 1.23 Aggregate amount of payments to the parties included in item 1.2 215 1.24 Aggregate amount of loans to the parties included in item 1.18 1.25 Explanation necessary for an understanding of the transactions Payments pursuant to 1.23 comprise: NonExecutive Directors Fees $ 12,450 (excl.gst); and Executive Directors Remuneration $ 202,816 (excl.gst) Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows None 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest None 8

Financing facilities available Amount available Amount used 3.1 Loan facilities 3.2 Credit standby arrangements Estimated cash outflows for next quarter 4.1 Exploration and evaluation 4.2 Project development 800 Total 800 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter Previous quarter 5.1 Cash on hand and at bank 244 452 5.2 Term Deposit 5.3 Bank overdraft 5.4 Other (provide details) Total: cash at end of quarter (item 1.22) 11,230 11,900 11,474 12,352 Changes in interests in mining tenements Tenement reference Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased 9

Issued and quoted securities at end of current quarter Total number Number quoted Issue price per security (see note 3) () Amount paid up per security (see note 3) () 7.1 Preference + securities B Class 12 100 100 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions (c) Conversion to fully paid ordinary shares 7.3 + Ordinary securities 117,360,100 117,360,100 7.4 Changes during quarter (a) Increases through issues 460,000 460,000 100,000 @37.80 360,000 @ 22 100,000 @37.80 360,000 @ 22 (b) Increases through conversion Preference Share (c) Decreases through returns of capital, buybacks 7.5 + Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 10

7.7 Options Exercise price Expiry date (a) Options over exercisable at 22 1,880,000 22 19 September 2009 (b) Options over exercisable at 25 1,200,000 1,050,000 @ 25 150,000 @ 25 1 June 2009 9 July 2009 (c) Options over exercisable at 30 1,200,000 1,050,000 @ 30 150,000 @ 30 1 June 2009 9 July 2009 (d) Options over exercisable at 35 1,200,000 1,050,000 @ 35 150,000 @ 35 1 June 2009 9 July 2009 (e) Options over exercisable at 31.80 40,000 31.80 17 October 2009 (f) Options over exercisable at 37.80 680,000 37.80 28 November 2009 (g) Options over exercisable at 37.90 1,840,000 37.90 31 December 2009 (h) Options over exercisable at 40 500,000 350,000 @ 40 150,000 @ 40 28 April 2010 30 May 2010 (i) Options over exercisable at 40 670,000 40 28 April 2010 (j) Options over exercisable at 37.80 920,000 37.80 21 November 2010 (k) Options over exercisable at 38 1,170,000 38 16 February 2011 TOTAL OPTIONS ISSUED 7.8 Issued during quarter : 11,300,000 11

7.9 Exercised during quarter 100,000 360,000 37.80 22 28 August 2010 19 September 2009 7.10 Expired during quarter 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX. 2 This statement does give a true and fair view of the matters disclosed. Sign here: ( Director & Company Secretary) Norman Marshall 30 January 2007 12