lng ltd a/r (and wcl)

I have not seen the 85TJ/d figure before?!

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As previously communicated to shareholders, the Company has, since 2011, been actively working with its major
shareholder, China Huanqiu Contracting & Engineering Corporation (HQC), in trying to secure gas to allow the LNG
project to recommence construction.

During the year, these efforts were partially successful when PetroChina Australia, acquired 100% of Molopo Energy
Limited’s gas assets in Queensland. The PetroChina Group is 86% owned by China National Petroleum Corporation
(CNPC), who also wholly owns HQC. The Molopo gas permit areas (owned ~67% by Molopo and 33% by Mitsui) are
located only 150 km from Gladstone, with Molopo’s share of 3P reserves being 812 PJ. Based on a number of
independent assessments, the Molopo permit areas have the capacity, subject to agreement with Mitsui, to produce and
deliver up to 65 TJ/d of gas.

It had also been planned that further gas supply, potentially up to 85TJ/d, would be sourced from Westside Corporation Limited, whose main gas asset is adjacent to the Molopo gas permit areas. However, in May 2013, PetroChina Australia elected not to proceed with the acquisition of Westside due to changed market conditions on the east coast of Australia.

The Company’s relationship with PetroChina Australia is governed by a Letter of Intent, stating the parties’ intent to negotiate a Tolling Agreement (similar to the business model being used for the Magnolia LNG Project) pursuant to
which PetroChina Australia would deliver gas, including the Molopo gas (subject to agreement with Mitsui), and other
gas reserves acquired, such as Westside, to the Gladstone LNG Project for liquefaction, storage and loading onto LNG
ships arranged by PetroChina Australia. The Letter of Intent remains valid and HQC has continued to work with the
Company and the CNPC group to find a gas supply solution that will allow the Gladstone LNG Project to proceed.
The Company had also been discussing with Metgasco Limited, the potential supply of gas from Metgasco’s gas permit
areas in Northern NSW. Unfortunately, major changes to the NSW Government’s policies and regulations in relation to
coal seam gas, have added additional costs and timing uncertainty in relation to the significant gas permit development required by Metgasco to meet the proposed level of gas supply to the Gladstone LNG Project. The Company has
concluded that Metgasco is no longer a viable option for gas supply to the Gladstone LNG Project.

Whilst the Company has signed an extension of the lease with Gladstone Ports Corporation Limited until the 30 June
2014, pending the securing of gas supply, the Gladstone LNG Project is effectively on a care and maintenance budget.