BG Group

BG in Egypt

Developing Egypt’s gas industry

2

Legal Notice

The following presentation includes "forward-looking information" within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended. Certain statements included in this presentation, including without limitation those concerning (i) BG Group's strategy, outlook and growth opportunities; (ii) the 2006 long term growth targets including certain financial targets; (iii) growth, and the sources of growth, to 2009 and beyond, including earnings growth; (iv) the projects and assets expected to contribute to BG Group’s growth; (v) commercialisation and project delivery activities; (vi) BG Group's positioning to deliver its future plans and to realise its potential for growth; (vii) plans for capital expenditure;(viii) demand for gas as a source of energy; (ix) dividends; (x) contribution of operating segments to earnings; and (xi) statements preceded by “believes”, “expects”, “anticipates”, “plans”, “intends” or similar expressions, contain certain forward-looking information concerning BG Group's operations, economic performance and financial performance. Although BG Group 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. Accordingly, results could differ materially from those set out in the forward looking statements, as a result of, among other factors (i) changes in economic, market and competitive conditions, including oil and gas prices; (ii) success in implementing business and operating initiatives; (iii) changes in the regulatory environment and other government actions, including UK and international corporation tax rates; (iv) the failure to ensure the safe operation of BG Group's assets worldwide; (v) implementation risk, being the challenges associated with delivering capital intensive projects on time and on budget, including the need to retain and motivate staff; (vi) commodity risk, being the risk of significant fluctuations in gas and/or oil prices from those assumed; (vii) a major recession or significant upheaval in the major markets in which BG Group operates; (viii) risks encountered in the gas and oil exploration and production sector in general; (ix) fluctuations in exchange rates; (x) business risk management; and (xi) the Risk Factors included in BG Group's Annual Report and Accounts 2003. BG Group undertakes no obligation to update any forward looking information.

This presentation does not constitute or contain, and shall not be taken to constitute or contain, an invitation or inducement to any person to underwrite, subscribe for, otherwise acquire, or dispose of or invest in BG Group plc or any other entity, nor does it advise any person to do any of the foregoing.

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BG in Egypt: Developing Egypt’s gas industry

BG in Egypt today20

00m

1000

m

20Km

200m 100m

50m

100m

50m

Development lease areasConcession areas

2000

m

1000

m

20Km

200m 100m

50m

100m

50m

Development lease areasConcession areas

WDDM

Equity: BG 50%Petronas 50%

JOC: BurullusOperator: BG

WDDMEquity: BG 50%

Petronas 50%JOC: BurullusOperator: BG

WDDM

Equity: BG 80% *Edison 20%

JOC: RashpetcoOperator: BG

RosettaEquity: BG 80% *

Edison 20%JOC: RashpetcoOperator: BG

Rosetta

Idku gas hub

Cairo

RED SEA

Beni Suef

Aswan

M E D I T E R R A N E A N SEA

Cairo

RED SEA

Beni Suef

Aswan

M E D I T E R R A N E A N SEA

DamiettaDamiettaDamietta

Equity: BG 100 % Operator: BG

El Manzala

Equity: BG 100 % Operator: BG

El ManzalaEquity: BG 70%

Petronas 30%Operator: BG

El BurgEquity: BG 70%

Petronas 30%Operator: BG

El Burg

Sapphire

Simian Sienna

Scarab Saffron

Delivering more than $4 billion of projects in Egypt

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The Egyptian gas market

Demand history and outlook

0

200

400

600

800

1,000

1,200

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Oil

Prod

uctio

n '0

00 b

pd

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Gas

Pro

duct

ion

mm

cfd

Export demand

LDC's & housing

Total Industry

Power generation

Oil Production*

*Actual production 1994-2004; Wood Mackenzie forecast of oil production beyond 2005

Focus on gas to replace oil and provide export revenue

5

The Egyptian gas market

Egypt’s emergence as a significant LNG player

Forecast LNG export volumes 2006

0

5

10

15

20

25

30

35

Prod

uctio

n (m

tpa)

Ala

ska

Liby

Vene

zuel

a

Ang

ola

Snoh

vit

Yem

en

Abu

Dha

bi

Bru

nei

Om

an

Aus

tral

ia

Egyp

t

Trin

id

Nig

eria

Alg

eria

Mal

ays

Qat

ar

Indo

nesi

a

Source : BG

iaa ad

Egypt – delivering over 12 mtpa of capacity by end of 2005

6

Exploration success

Nile Basin offshore geological model

Large reservoirs created by the Nile

7

Exploration success

1997-2002

Merlon

bp

Eni

RWE

Centurion

BG 92%

86%

75%

63%

60%

40%

Nile Basin exploration success ratios

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Building the Business

Rosetta

Asset configuration• Phase 1 on production 2001

• Unmanned platform in 60m water

• 24” pipeline to Idku terminal

Status today• DCQ 275 mmcfd

• Domestic sales

• 25 year contract

• Maximum delivery of 356 mmcfd

20Km

Idku gas hub

Rosetta Phase 2

Rosetta

Reliable supply for the domestic market

9

Building the business

Scarab Saffron

Asset configuration• On production Q1, 2003• Sub-sea development• 8 high rate gas producers• 2 pipelines (36”, 24”) to Idku terminal

Status today• DCQ 626 mmcfd• Debottlenecked to produce above

800 mmcfd• Domestic sales • Highly reliable• 25 year contract

20Km

Idku gas hub

Scarab Saffron

WDDM

Reliable supply for the domestic market

10

Building the business

Scarab Saffron and Damietta tolling

• 5 year contract starts in Q1 2005

• Minimum throughput up from 475 to 700 mmcfd

– 475 mmcfd - domestic

– 225 mmcfd - export

• BG secures 0.7 mtpa of LNG

• Pricing on ELNG Train 2 terms

• BG shipping & destination flexibility

20Km

Idku gas hub

Scarab Saffron

WDDM

Damietta

Leveraging the LNG portfolio

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Building the business

Simian Sienna and Sapphire

• Supply to ELNG Trains 1 and 2

• 16 sub-sea wells

• Onshore terminal expansion

• Onshore condensate pipeline

• Rate of ca 1,130 mmcfd into ELNG

• Cost ca $1.3 billion gross

20Km

Idku gas hub

SimianSienna

WDDM

Sapphire

Damietta

Integrated project

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Building the business

WDDM offshore

Domestic

SDA/UTA

PLEM

SDAM

M M

Scarab Saffron

8 wells500 m water depth

Simian Sienna

Glycol 4” Glycol 4”

650 m-1100 m water depth

24" 36"

20" 26"

8 wellsM

26"

8 wells

Sapphire650 m water depth

Electrical/hydraulic umbilical

-

M

PLEM PLEM

M

SDA

Idku Gas Hub

Electrical/hydraulic umbilicalShallow

Water Control Platform

PLEM = Pipeline End Manifold SDA = Sub-sea distribution assemblyUTA = Umbilical distribution assemblyM= Manifold

ELNG Trains 1 and 2

Integration adds value

13

Deepwater Manifold

14

Simian Controls Platform

Simian Sapphire on budget and ahead of schedule

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Building the Business

Egyptian LNG

Asset configuration• Two liquefaction trains 7.2 mtpa• ca 565 mmscfd gross input per train• 2 storage tanks

Status today• Train 1 output sold to Gaz de France• Train 2 output sold to BGGM

De-bottlenecking

• ALNG experience captured• Expect + 5% after 2006

ExpandableEGAS EGPC

World class project

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Building the Business

Egyptian LNG progress update

Excellent progress to meet accelerated schedule

17

Building the Business

Egyptian LNG marine facilities

Egypt’s second private port

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Building the Business

Egyptian LNG project finance

• $950 million secured from international institutions for Train 1

• Largest project financing ever in North Africa

• Demonstrates international confidence in Egypt

• A steep learning curve for Egypt, but….

• Banks lining up to finance Train 2 - $880m

Egypt firmly on the international project finance map

19

Building the Business

Egyptian LNG public consultation

• Meetings in Idku, Damanhur and Cairo

• World Bank standard

• Enhanced community’s understanding of the project

• Enhanced ELNG’s understanding of community’s concerns

High quality public consultation on major projects

20

Building the business

World beating project delivery

0

2

4

6

8

10

12

14

16

18

Nigeria Qatargas Oman RasGas ALNG ELNG

EPC award to first LNG

LNG project to EPC contract

Years

Source: BG-Group

Speed to market creates extra benefit for Egypt

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Building the business

World beating cost performance

0

50

100

150

200

250

300

350

400

450

Qatargas Nigeria RasGas ELNG T1 Oman ALNG T1 ALNG T1-3 ELNG T1-2

Cost* $/tpa

Source: BG-Group * Total project cost excl. financing. All non-BG projects are based on 2-train build

BG leads the competition

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Delivering the business

Improving safety performance

• Transfering safety best practice to Egypt

• Close co-operation with EGPC affiliate companies

• Excellent safety record in Egypt

• Road safety campaigns in the community

We will do it safely or we will not do it

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Delivering the business

BG’s gross operated volumes

Production performance exceeding expectations

Rosetta DCQ increase

Scarab increase due to Damietta LNG sales

ELNG T1 on target

ELNG T2 on target

2500 Debottlenecking of ELNG

2000

1500

1000

mm

cfd

500

02004 2005 2006 2007 2008 2009 2010

Rosetta Scarab Saffron domesticDamietta LNG Train 1 feedTrain 2 feed May 2002 est.

24

2002

bp8%Shell

9%

Eni22%

BG39%

Others1%

Merlon2%

Centurion2%

Apache10%

EGPC7%

2006 *

* BG Group estimates

BG10%

bp10%

Shell19%

Eni37%

EGPC16%

Others<1%

Apache8%

Leading supplier in growing market

Delivering the business

BG’s growth in Egypt

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Upstream operating structure

Rashpetco/Burullus

• Project Delivery

• Operations

• Exploration

• Contractor relations

The Government

• Policy

• Legislation

• Award concessions

• Approvals

• Human resources

• Customer

• Partner

BG

• Governance

• Technical support

• QA/QC support

• Strategic Planning

• Partner Relations

• Government Relations

• Business Development

Partners

• Provide capital

• Technical support

• QA/QC support

Egypt has a tried and tested upstream model

26

Delivering the business

Strong government relationship

• Aligned objectives– Focus on gas– Export framework delivered

• Delivering in partnership – Project financing

• Sustainable development– Technology transfer– Egyptian involvement

A sound business partnership

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Conclusion

• Understanding of the Egyptian market• Exploration success• Rapid commercialisation• Technical competence• Low cost gas to high value markets• Accelerated schedule for export projects• Safe and efficient operations

BG – the partner of choice