World s first LNG from Queensland, Australia A precursor to US LNG exports Jason Klein AGM, America American Petroleum Institute, Houston Chapter
Legal notice 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. 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 Principal risks and uncertainties included in the BG Group plc Annual Report & Accounts 2013. 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 forwardlooking statements. 2
Agenda BG Group overview LNG project overview Queensland Curtis LNG (QCLNG) Lake Charles LNG project 3
History demerger and development 1986 1997 1999 2000 2002 2005 BG Plc BG Group Plc British Gas Lattice National Grid Transco National Grid Centrica www.centrica.com 4
About BG Group Market leader: FTSE top 20 company Listed on London Stock Exchange Market capitalization Circa $48 billion Two highly distinctive capabilities: World class exploration Unique LNG model 5
QCLNG project overview
QCLNG a world-first project US$20.4 billion investment by BG Group Taps abundant source of unconventional gas in Australia as global demand for cleaner energy grows Adds volume and flexibility to BG Group s global LNG portfolio World s first LNG project to be supplied by natural gas from coal seams First of three projects in Australia 7
QCLNG phase one Expand upstream Build pipeline Deliver LNG plant ~2,800 sq mi area 2,000 wells (including in state forest, pastoral/agricultural land) 2,300 land access agreements ~2,100 mi gathering pipeline Gas processing infrastructure Water Treatment Plants ~335 mi pipeline from Surat Basin to Curtis Island Sold to APA Group, Australia s largest gas infrastructure business, in December 2014 for US$5 billion QGC to operate for first 12 months of agreement 2 trains Train 1 commenced LNG production December 2014 8 mtpa output at plateau production in 2016 Construction by Bechtel Conoco Phillips LNG technology One of Australia s largest capital infrastructure projects 8
Transition to operations Initial construction phase of QCLNG is almost complete First LNG cargo loaded in December 2014 Focus shifting from project deliverables to efficient operating performance Methane Rita Andrea, December 2014 9
Exports from Curtis Island Up to 120 shipments per year will leave the QCLNG plant at peak production CNOOC and Tokyo Gas foundation customers First cargo departed Curtis Island on January 5, 2015 10
Operating requirements Strong focus on sustaining social license to operate Importance of negotiating Indigenous Land Use Agreements with first people of Australia and protecting cultural heritage Effective co-existence of coal seam gas, pastoral and agricultural industries Regulatory requirements on social, hard infrastructure and environmental impact management Expectations for delivery of community benefits, employment and regional economic development 11
Project-related jobs in Queensland 16000 Contractors forecast 14000 Employees Forecast Contractors 12000 10000 Major upstream contractors demobilize Employees Steady state location Midstream, 7% 8000 6000 Major midstream contractors demobilize Brisbane, 15% 4000 Upstream, 78% 2000 0 Nov-11 Nov-12 Nov-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 12
Next steps Continue gas supply to domestic customers and LNG plant via new wells and infrastructure constructed in Phase One Train 2 scheduled for completion in Q3 2015 Exploration in Queensland s Bowen and Cooper Basins Continued investment in our host communities 13
Lake Charles project overview Cost-advantaged brownfield site identified and secured 15 mtpa plant to utilize existing facilities and pipelines Energy Transfer will own and finance construction BG Group to manage construction and operate Responsibility for offtake 14
Regulatory process and timeline FTA license NFTA license FERC pre-filing FERC application FEED EPC Expected FID Granted July 2011 Granted August 2013 Filed April 2012 Filed March 2014 Completed May 2014 2015 2016 Lake Charles has obtained FTA and non-fta export approval from DOE FEED verification by EPC bidders and bid process from Q2 2014 FERC approval (critical path) late 2015 Expected FID 2016 15