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BG Fourth-Quarter Earnings Climb 42% on Higher Asian LNG Demand

BG Group Plc (BG/), the U.K.’s third- largest natural-gas producer, reported a 42 percent increase in earnings on higher liquefied natural-gas demand in Asia.

Net income in the fourth quarter rose to $1.3 billion from $940 million in the year-earlier period, the Reading, England- based company said today in a statement.

LNG shipments to Asia soared last year after Japan, the world’s largest importer of the fuel, boosted output at gas- fired power plants to compensate for nuclear reactors idled after the March earthquake and tsunami.

“LNG imports continued to show a clear shift to Asia in the fourth quarter,” Oswald Clint, an analyst at Sanford C. Bernstein & Co. in London, said before the earnings release. “This will allow BG to capture these higher margins.”

At the same time, BG’s gas output and sales in Europe were curbed by a milder winter. U.K. front-month natural gas prices are down about 12 percent since reaching a 2011 high of 67.80 pence per therm on Nov. 7.

Excluding disposals and one-time items, earnings were $1.5 billion. That beat the $1.1 billion mean estimate from a survey of 14 analysts.

BG expected to earn $2.4 billion from its LNG operations last year after raising its outlook from a February forecast of as much as $2.2 billion.

“2011 will likely be seen as a disappointing and frustrating year with year-on-year production essentially flat,” Lucas Herrmann, a London-based analyst at Deutsche Bank AG, said before the report was released. In “2012 we expect that production should start to show much better growth” with about a 10 percent gain.

Production last year was reduced by field maintenance in the North Sea, civil unrest in North Africa and flooding in Australia. BG expected “modest production growth,” Chief Executive Officer Frank Chapman said in May, as the producer focused on projects in Brazil, Australia and the U.S.

In Kazakhstan, BG and partners plan to further expand the Karachaganak oil and gas field project after KazMunaiGaz National Corp., the state energy company, secured a 10 percent stake in the venture.

Royal Dutch Shell Plc and BP Plc are the U.K.’s biggest gas producers.

BG will host a webcast presentation at 2 p.m.

To contact the reporter on this story: Eduard Gismatullin in London at

To contact the editor responsible for this story: Will Kennedy at

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