CHINA LNG GROUP LIMITED * (incorporated in the Cayman Islands with limited liability) (Stock Code: 931)

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement appears for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company. CHINA LNG GROUP LIMITED * (incorporated in the Cayman Islands with limited liability) (Stock Code: 931) DISCLOSEABLE TRANSACTION AND VOLUNTARY ANNOUNCEMENT SHARE TRANSFER AGREEMENTS DISCLOSEABLE TRANSACTION On 23 November 2015 (after the trading hours of the Stock Exchange), having received the approval from CNOOC Gas & Power Group, CLNG Investment (Shanghai) Co., Limited*, a wholly owned subsidiary of the Company (defined CLNG Investment ) and Heyin Ltd entered into the First Share Transfer Agreement, pursuant to which, CLNG Investment has conditionally agreed to purchase and Heyin Ltd has conditionally agreed to sell, 40% equity interests in CNOOC Shanghai Ltd for a total consideration of RMB3,600,000. The First Consideration will be settled by CLNG Investment in full in cash. VOLUNTARY ANNOUNCEMENT On 23 November 2015 (after the trading hours of the Stock Exchange), having received the approval from CNOOC Gas & Power Group, CLNG Investment and Zhonghao Ltd entered into the Second Share Transfer Agreement, pursuant to which, CLNG Investment has conditionally agreed to purchase and Zhonghao Ltd has conditionally agreed to sell, 40% equity interests in CNOOC Bengbu Ltd for a total consideration of RMB3,600,000. The Second Consideration will be settled by CLNG Investment in full in cash. CNOOC Shanghai Ltd and CNOOC Bengbu Ltd are principally engaged in the sales and distribution of LNG diesel and oil products. 1

2 Upon Completion, each of CNOOC Shanghai Ltd and CNOOC Bengbu Ltd will become a 40%-owned associate company of CLNG Investment. As one of the applicable percentage ratios set out in Rule of the Listing Rules in respect of the First Acquisition exceed 5% but are less than 25%, the First Acquisition constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to reporting and announcement requirements. The First Acquisition is not subject to shareholders approval of the Company under the Listing Rules. THE FIRST ACQUISITION The Board is pleased to announce that on 23 November 2015 (after the trading hours of the Stock Exchange), having received the approval from CNOOC Gas & Power Groups, CLNG Investment (Shanghai) Co., Limited*, a wholly-owned subsidiary of the Company (defined CLNG Investment ) and Heyin Ltd entered into the First Share Transfer Agreement, pursuant to which, CLNG Investment has conditionally agreed to purchase and Heyin Ltd has conditionally agreed to sell, 40% equity interests in CNOOC Shanghai Ltd for a total consideration of RMB3,600,000. The First Consideration will be settled by CLNG Investment in full in cash. THE FIRST SHARE TRANSFER AGREEMENT Set out below are the salient terms of the First Share Transfer Agreement: Date 23 November 2015 Parties Purchaser: Vendor: CLNG Investment, a wholly-owned subsidiary of the Company Heyin Ltd Assets to be acquired To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, Heyin Ltd and its ultimate beneficial owner are independent third parties not connected with (within the meaning of the Listing Rules) the Directors, the chief executives and the substantial shareholders of the Company and its subsidiaries and their respective associates. CLNG Investment conditionally agreed to purchase, and Heyin Ltd conditionally agreed to sell, 40% equity interests in CNOOC Shanghai Ltd, free from any restrictions or encumbrances. 2

3 The First Consideration The First Consideration for the First Acquisition is RMB3,600,000 (equivalent to approximately HK$4,374,000) and will be payable by CLNG Investment to Heyin Ltd in full in cash when an acceptance notice has been received from the relevant governmental authorities in relation to the registration of the share transfer of CNOOC Shanghai Ltd. The Group intends to finance the First Consideration solely by means of internal resources. THE SECOND ACQUISITION The Board is pleased to announce that on 23 November 2015 (after the trading hours of the Stock Exchange), having received the approval from CNOOC Gas & Power Groups, CLNG Investment and Zhonghao Ltd entered into the Second Share Transfer Agreement, pursuant to which, CLNG Investment has conditionally agreed to purchase and Zhonghao Ltd has conditionally agreed to sell, 40% equity interests in CNOOC Bengbu Ltd for a total consideration of RMB3,600,000. The Second Consideration will be settled by CLNG Investment in full in cash. THE SECOND SHARE TRANSFER AGREEMENT Set out below are the salient terms of the Second Share Transfer Agreement: Date 23 November 2015 Parties Purchaser: Vendor: CLNG Investment, a wholly-owned subsidiary of the Company Zhonghao Ltd Assets to be acquired To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, and its ultimate beneficial owner are independent third parties not connected with (within the meaning of the Listing Rules) the Directors, the chief executives and the substantial shareholders of the Company and its subsidiaries and their respective associates. CLNG Investment conditionally agreed to purchase, and Zhonghao Ltd conditionally agreed to sell, 40% equity interests in CNOOC Bengbu Ltd, free from any restrictions or encumbrances. 3

4 The Second Consideration The Second Consideration for the Second Acquisition is RMB3,600,000 (equivalent to approximately HK$4,374,000) and will be payable by CLNG Investment to Zhonghao Ltd in full in cash when an acceptance notice has been received from the relevant governmental authorities in relation to the registration of the share transfer of CNOOC Bengbu Ltd. The Group intends to finance the Second Consideration solely by means of internal resources. Basis of determination of the First and Second Consideration The First Consideration was determined after arm s length negotiation between CLNG Investment and Heyin Ltd with reference to the combination of the net asset value of CNOOC Shanghai Ltd as at 31 August 2015 of approximately RMB3,906,000 with the accumulated loss incurred from the preparatory and construction works of CNOOC Shanghai Ltd of approximately RMB5,095,000, valuing the net worth of CNOOC Shanghai Ltd at approximately RMB9,000,000. The purchase price in the acquisition of 40% of CNOOC Shanghai Ltd valued at RMB9,000,000 amounted to RMB3,600,000, which is at a 130.4% premium over the net asset value. The Second Consideration was determined after arm s length negotiation between CLNG Investment and Zhonghao Ltd with reference to the combination of the net asset value of CNOOC Bengbu Ltd as at 31 August 2015 of approximately RMB5,219,000 with the accumulated loss incurred from the preparatory and construction works of CNOOC Bengbu Ltd of approximately RMB3,781,000, valuing the net worth of CNOOC Bengbu Ltd at approximately RMB9,000,000. The purchase price in the acquisition of 40% of CNOOC Bengbu Ltd valued at RMB9,000,000 amounted to RMB3,600,000, which is at a 72.4% premium over the net asset value. Due to the Group s ability to grow the number of LNG heavy vehicle users through our financing business, the Group has received many discussions from LNG refueling station operators to assist in or to form partnership relationships with a view to rapidly increase the gas sales at their LNG refueling stations. In the aforementioned two acquisitions, the Group is confident that the LNG refueling stations of CNOOC Shanghai Ltd and CNOOC Bengbu Ltd will be profitable in the foreseeable future, based on the Group s ability to grow the number of LNG heavy vehicle users prompting an increase in LNG sales at the refilling stations. Taking into consideration of the above future profitable factor and together with the goodwill of CNOOC being the major LNG upstream supplier in the PRC, the Directors are of the view that the First Consideration and the Second Consideration are fair and reasonable. 4

5 Conditions Precedent Completion will be conditional upon the satisfaction or waiver (as the case may be) of the following conditions: (a) all necessary consents, licences, authorizations and approvals required to be obtained on the part of Heyin Ltd and Zhonghao Ltd in respect of the First Share Transfer Agreement and the Second Share Transfer Agreement and the transactions contemplated hereby having been obtained and remained in full force and effect; and (b) CNOOC Gas & Power Group having approved the First Share Transfer Agreement and the Second Share Transfer Agreement and the transactions contemplated, which these approvals have been received by the Group on 23 November Completion Completion shall take place after all the conditions to the First Share Transfer Agreement and the Second Share Transfer Agreement having been fulfilled. Upon Completion, each of CNOOC Shanghai Ltd and CNOOC Bengbu Ltd will become a 40%-owned associate company of CLNG Investment. INFORMATION ON CNOOC SHANGHAI LTD Background CNOOC Shanghai Ltd is principally engaged in the sales and distribution of LNG and oil products. CNOOC Shanghai Ltd was established in the PRC on 27 August 2013 with the registered capital of RMB9,000,000. As at the date of this announcement, Heyin Ltd holds 40% equity interests in CNOOC Shanghai Ltd, and CNOOC Gas & Power Group holds 60% equity interests in CNOOC Shanghai Ltd. Recently, the following projects of CNOOC Shanghai Ltd are in progress: (1) Qingxi LNG refueling station* ( LNG ) In May 2014, CNOOC Shanghai Ltd submitted the application for reconstruction of an existing gas station at Qingxi, Qingpu district, Shanghai into a LNG refueling demonstration station to Shanghai Municipal Development and Reform Commission* ( ). In June 2014, CNOOC Shanghai Ltd received the approval for the commencement of the preliminary reconstruction of the LNG refueling demonstration station at Qingxi from Shanghai Municipal Development and Reform Commission. Currently, CNOOC Shanghai Ltd has completed the project design, the preparation works of fireproof and environmental impact assessment. The refueling station is expected to start operation in January

6 (2) Qingpu Public Transportation Terminal LNG refueling project* ( LNG ) In June 2014, CNOOC Shanghai Ltd submitted the application for provision of LNG refueling services to the public vehicles in Qingpu district, Shanghai Municipal Qingpu District Development and Reform Commission* ( ) and the Shanghai Municipal Qinggpu Transportation Authority* ( ). In September 2014, CNOOC Shanghai Ltd and the Shanghai Municipal Qingpu Transportation Authority entered into a framework agreement in relation to provision of LNG refueling service and construction of a LNG refueling station in Qingpu Public Transportation Terminal. At present, CNOOC Shanghai Ltd is undergoing several discussions with a number of public transportation companies in Qingpu in relation to transformation of their public vehicles from using diesel fuel to LNG. (3) Gucun LNG refueling station* ( LNG ) In May 2015, CNOOC Shanghai Ltd submitted the application for the construction of a LNG refueling demonstration station in Gucun town, Baoshan district, Shanghai to Shanghai Municipal Development and Reform Commission. CNOOC Shanghai Ltd is awaiting the approval from Shanghai Municipal Development and Reform Commission for commencement of the respective preliminary construction work in Gucun town. Financial information on CNOOC Shanghai Ltd Set out below is the financial information of CNOOC Shanghai Ltd prepared under the China Accounting Standards for Business Enterprises for the four months ended 31 December 2013, year ended 31 December 2014 and the eight months ended 31 August For the For the For the four months ended year ended eight months ended 31 December December August 2015 (Audited) (Audited) (Unaudited) (RMB 000) (RMB 000) (RMB 000) Revenue 16,015 59, Loss before and after taxation 1,653 2,118 1,324 As at 31 August 2015, CNOOC Shanghai Ltd had a net asset value of approximately RMB3,906,000. 6

7 INFORMATION ON CNOOC BENGBU LTD Background CNOOC Bengbu Ltd is principally engaged in the sales and distribution of LNG and oil products. CNOOC Bengbu Ltd was established in the PRC on 8 May 2014 with the registered capital of RMB9,000,000. As at the date of this announcement, Zhonghao Ltd holds 40% equity interests in CNOOC Bengbu Ltd, and CNOOC Gas & Power Group holds 60% equity interests in CNOOC Bengbu Ltd. Bengbu is a prefecture-level city in northern Anhui province and is located 135 km north of Nanjing, on the Huai River. Bengbu has always been a hub of water and land communications in Anhui province, and a major distribution centre for the Huai basin. The highways of Bengbu radiate in all directions. Bengbu is at the crossing of Beijing Fuzhou Expressway and Xian Luoyang Shanghai Expressway and has the entrance and exit roads of high standards to connect to expressways, national roads and provincial roads. Recently, the following projects of CNOOC Bengbu Ltd are in progress: (1) Renhecun LNG refueling station* ( ) CNOOC Bengbu Ltd owns a LNG refueling station in Renhecun, Bengbu which has been completed and is ready for final inspection and acceptance by the relevant governmental authorities before coming into operation. The refueling station mainly provides refueling services to the public buses. It is expected that the station will cater to 30 public buses in (2) Vehicle Administrative Office of Bengbu City LNG refueling station* ( ) In February 2015, CNOOC Bengbu Ltd has entered into an agreement for the construction of a LNG refueling station in the Vehicle Administrative Office of Bengbu City* ( ) and has submitted application for the approval to the governmental authorities. 7

8 Financial information on CNOOC Bengbu Ltd Set out below is the financial information of CNOOC Bengbu Ltd prepared under the China Accounting Standards for Business Enterprises for the eight months ended 31 December 2014 and the eight months ended 31 August For the eight For the eight months ended months ended 31 December August 2015 (Audited) (Unaudited) (RMB 000) (RMB 000) Revenue 292 Loss before and after taxation 2,553 1,228 As at 31 August 2015, CNOOC Bengbu Ltd had a net asset value of approximately RMB5,219,000. INFORMATION ON CNOOC GAS AND POWER GROUP CNOOC Gas and Power Group is a wholly-owned subsidiary of China National Offshore Oil Corporation ( CNOOC ), the largest offshore oil and gas producer in PRC and a mega stated owned enterprise operating directly under the State-owned Assets Supervision and Administration Commission of the State Council of the PRC, unified manages CNOOC s gas and power business. CNOOC Gas and Power Group s business covers technology development, technology services and consulting services for oil and natural gas (including LNG) development and petrochemical engineering; contracting services for engineering design, development, management, maintenance and operation of oil and natural gas (including LNG) development; construction, management and operation of oil and gas pipeline networks; in addition it covers power development, production, supply and other relevant contracting and technology services. Its core business is LNG project development, base on existing terminals and pipeline network. REASONS FOR AND BENEFITS OF THE FIRST ACQUISITION AND THE SECOND ACQUISITION The Company is an investment holding company and its subsidiaries are principally engaged in development of the LNG businesses, trading of securities and property investment. The Board constantly reviews the Company s business strategy in maximising the value of the Company and continues to explore attractive business opportunities. The existing LNG business of the Group is provision of finance leasing business of LNG heavy vehicles in the PRC. On 27 July 2015, the Company entered into the joint venture agreement with Huaqiang Natural Gas Development Group Limited* ( ) to principally engage in the development and operation of oil-to-gas conversion and LNG refueling facilities on floating barges, development of LNG related technologies, operation of LNG refueling stations, trading of gas ignition equipment, and the development and utilisation of new energy sources. In addition, the Group

9 is expanding its LNG business into, including but not limited to, sales and distribution of LNG and acquisition or construction of LNG refueling stations. As at the date of this announcement, 32 strategic cooperation framework agreements entered into by the Group remain active, which ongoing research and negotiations are being conducted on their development timeframe. Based on the above, the Directors consider that the First Acquisition and the Second Acquisition are in the interest of the Company and the Shareholders as a whole and that the terms of the First Share Transfer Agreement and the Second Transfer Agreement are fair and reasonable. LISTING RULES IMPLICATIONS As one of the applicable percentage ratios set out in Rule of the Listing Rules in respect of the First Acquisition exceed 5% but are less than 25%, the First Acquisition constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to reporting and announcement requirements. The First Acquisition is not subject to shareholders approval of the Company under the Listing Rules. WARNING: Completion is subject to the fulfilment or waiver (as the case may be) of the conditions precedent as set out in the First Share Transfer Agreement and the Second Share Transfer Agreement. DEFINITION In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: associate Board Business Days CLNG Investment CNOOC Bengbu Ltd CNOOC Gas & Power Group has the meaning ascribed to it under the Listing Rules the board of Directors a day (other than a Saturday or Sunday) on which licensed banks in Hong Kong and the PRC are generally open for business (CLNG Investment (Shanghai) Co., Limited*), a company established under the laws of PRC with limited liability and a wholly owned subsidiary of the Company (CNOOC (Bengbu) Traffic New Energy Co., Limited*), a company established under the laws of PRC with limited liability (CNOOC Gas & Power Group Co., Limited*), a company established under the laws of PRC with limited liability and holds 60% equity interests in both of the CNOOC Shanghai Ltd and CNOOC Bengbu Ltd as at the date of this announcement 9

10 CNOOC Shanghai Ltd Company Completion Completion Date Director(s) First Acquisition First Consideration First Share Transfer Agreement Group Heyin Ltd HK$ Hong Kong Listing Rules LNG PRC RMB Second Acquisition (CNOOC (Shanghai) Traffic New Energy Co., Limited*), a company established under the laws of PRC with limited liability China LNG Group Limited, a company incorporated in the Cayman Islands with limited liability whose Shares are listed and traded on the main board of the Stock Exchange the completion of the First Acquisition and the Second Acquisition the date on which the Completion takes place director(s) of the Company the acquisition of 40% equity interests in CNOOC Shanghai Ltd pursuant to the terms and conditions of the First Share Transfer Agreement RMB3,600,000, the consideration for the First Acquisition the equity transfer agreement dated 23 November 2015 entered into between CLNG Investment and Heyin Ltd in relation to the sale and purchase of 40% equity interests in CNOOC Shanghai Ltd the Company and its subsidiaries (Shanghai Heyin Energy Investment Co., Limited*), a company established under the laws of PRC with limited liability Hong Kong dollars, the lawful currency of Hong Kong The Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited liquefied natural gas the People s Republic of China, which for the purpose of this announcement excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Renminbi, the lawful currency of the PRC the acquisition of 40% equity interests in CNOOC Bengbu Ltd pursuant to the terms and conditions of the Second Share Transfer Agreement 10

11 Second Consideration Second Share Transfer Agreement Shares Shareholders Stock Exchange Zhonghao Ltd RMB3,600,000, the consideration for the Second Acquisition the equity transfer agreement dated 23 November 2015 entered into between CLNG Investment and Zhonghao Ltd in relation to the sale and purchase of 40% equity interests in CNOOC Bengbu Ltd share(s) of HK$0.01 each in the share capital of the Company holders of the Shares The Stock Exchange of Hong Kong Limited (Fengyang Zhonghao New Energy Investment Co., Limited*), a company established under the laws of PRC with limited liability % per cent. By order of the Board China LNG Group Limited Kan Che Kin, Billy Albert Chairman Hong Kong, 23 November 2015 As at the date of this announcement, the executive Directors are Mr. Kan Che Kin, Billy Albert, Mr. Chen Li Bo, Ms. Li Shu Han, Eleanor Stella and Mr. Li Kai Yien, Arthur Albert; the non-executive Directors are Mr. Simon Murray and Dr. Lam, Lee G.; the independent non-executive Directors are Mr. Li Siu Yui, Mr. Ip Woon Lai and Mr. Lam Lum Lee. * For identification purposes only 11