Liquefied Natural Gas : RECOMMENDED TAKEOVER OFFER FOR LNGL

Liquefied Natural Gas Limited (ASX: LNG, OTC ADR: LNGLY) (LNGL or the Company) is pleased to announce that it has entered into a Bid Implementation Agreement (BIA)1 with LNG9 PTE LTD (LNG9), a Singapore-based private company, pursuant to which LNG9 will make an offer to acquire all of the issued ordinary shares of LNGL under the terms of an off-market takeover bid (Offer).

LNGL has over the last year evaluated many potential corporate and asset transactions to provide liquidity and value for shareholders and considers that the LNG9 offer is the most attractive offer currently available for LNGL shareholders.

The Directors of LNGL will therefore unanimously recommend that LNGL shareholders accept the Offer in the absence of a superior proposal being received. 2

Proposal highlights

LNG9 desires to acquire 100% of the outstanding LNGL shares, which includes all shares underlying the outstanding LNGL sponsored ADRs (LNGLY), and to potentially take the Company private.

Under the terms of the Offer, LNGL shareholders will receive US$0.13 in cash per share (or the Australian dollar equivalent), valuing the share capital of LNGL at approximately US$75 million.

The Offer price approximates A$0.198 per LNGL share, applying an A$ / US$ exchange rate of approximately 0.66 / 1 as at 27 February 2020, the trading day prior to the date of this announcement.

The Offer represents a 72% premium to the closing price of LNGL's shares on the ASX of A$0.115 on the trading day prior to the date of this announcement, valuing the share capital of LNGL at approximately A$114 million, and a 48% premium to LNGL's 30-day volumeweighted average price (VWAP) on ASX of A$0.133 over the 30 trading days prior to the date of this announcement.

The Offer is subject to LNG9 receiving acceptances in respect of at least 90% of ordinary shares and to other conditions summarized below.

Additionally, First Wall Street Capital Corp. (Lender) has agreed to provide bridge financing to LNGL in the form of a non-revocable Senior Secured Convertible Note financing facility for the purposes of facilitating ongoing marketing and development of LNGL's projects, and to meet LNGL's working capital requirements, including its transaction costs. Further details of this facility are set out below.

Further details of the Offer, and of LNG9's intentions, will be set out in LNG9's Bidder's Statement.

Important points for LNGL shareholder consideration

The Offer is all cash.

The Offer represents a compelling premium to LNGL's current trading price.

At the current burn rate, LNGL's existing available liquidity is insufficient to sustain operations beyond the current quarter based on existing funds, or beyond the third quarter of 2020 inclusive of the bridge financing facility.

If the Offer conditions are satisfied or waived, shareholders who accept the Offer avoid the risk of LNGL entering administration or liquidation, which event would introduce risk of significant value loss resulting from, among other things, insolvency clauses existing in key Magnolia LNG contracts, such as the EPC contract, equity commitment agreement, and the site port lease, which clauses provide counterparties with rights including contract termination.

If the Offer conditions are satisfied or waived, shareholders who accept the Offer avoid the risk of substantial dilution associated with future LNGL fundraising(s).

If the Offer conditions are satisfied or waived, shareholders who accept the Offer avoid other inherent risks including satisfaction of all other milestones required to be achieved to allow Magnolia LNG to reach a Final Investment Decision and financial close.

LNG industry competition remainsintense; current LNG markets are oversupplied and future increases in share value are not guaranteed, particularly in the short to medium term. While LNGL is excited by the LNG supply opportunity in Vietnam initially announced on September 16, 2019 and the expectation that the MOU will become binding, we cannot assure additional binding offtake contracts necessary to support a Final Investment Decision and financial close given current LNG market conditions.

Bid Implementation Agreement

The BIA includes 'no shop', 'no talk' and 'no due diligence' restrictions on LNGL as well as notification and matching rights in the event of a competing proposal.

Bridge financing transaction details

LNGL has entered into a Senior Secured Convertible Note (Note) financing facility with the Lender.

The maximum face value of the Note facility is US$6 million, with US$1.0m to be drawn down at closing and five further drawdowns of US$1.0m at 30-day intervals at LNGL's option; the interest rate is 12% per annum payable-in-kind (by adding accrued interest to the outstanding principal amount of the notes) and the term (to Maturity Date) is 6-months from close.

LNGL may pre-pay amounts outstanding underthe bridge financing facility at any time subject to a make-good payment of the interest which would have accrued had such prepaid amount remained outstanding until the Maturity Date.

The Note facility is secured by a first priority, fully perfected security interest over a 49% limited partnership interest in Magnolia LNG Investment LP, the indirect owner of 100% of Magnolia LNG LLC (the Magnolia LNG project company) and a guaranty by Magnolia LNG Investment LP.

Drawdown under the Note facility is conditional on these security documents, and the Bid Implementation Agreement, being executed.

The Notes are convertible in whole or in part at Lender's option from the Closing Date until the Maturity Date.

If the Lender exercises its conversion right to convert in whole, LNGL will issue the Lender the maximum 86,500,072 shares available for issue under LNGL's ASX Listing Rule 7.1 capacity and, the lender must: pay LNGL the unfunded balance of US$6 million (minus the sum of the Subscription Amounts already drawn down and received by LNGL up to the date of the conversion notice) which will be converted at a price per share equal to the volume weighted average price of LNGL shares over the 15 trading days before the Lender gives the notice; plus pay the Company the same conversion price on the balance of the 86,500,072 Shares, with such payments due to the Company within 5 Business Days of the date of the Conversion Notice.

If the Lender exercises its conversion right of the then outstanding principal and accrued but unpaid interest (convert in part) at a date prior to funding the final drawdown and chooses to only convert that balance into new ordinary shares of LNGL, the Lender shall receive a number of shares based on various agreed and defined conversion prices between approximately US$0.1387 and US$0.1394 (depending on the month of conversion) as set out in the Secured Convertible Note Subscription Deed.

Upon exercise of the 'convert in part' conversion option by Lender, if the full number of 86,500,072 new ordinary shares are issued by LNGL in satisfaction of the conversion feature, then to the extent any balance remains owing under the Note facility, LNGL will repay such amount in cash.

If any issue of shares upon conversion of Notes is limited by section 606 of the Corporations Act, LNGL will convene a meeting of its shareholders to seek approval for the purposes of item 7 of section 611 of the Corporations Act.

Should a Termination Event pursuant to clause 8 of the BIA occur upon lapse or withdrawal of LNG9's bid, Lender may nominate a director to the board of LNGL while amounts are owing under the Note facility.

Additional details of the terms of the Senior Secured Convertible Note facility are contained in a binding Secured Convertible Note Subscription Deed between Lender and LNGL, a copy of which is attached to this release.

Contact:

Mr Micah Hirschfield

Tel: [phone]

Email: [e-mail]

ABOUT LIQUEFIED NATURAL GAS LIMITED

LNGL is an ASX listed company (Code: LNG and OTC ADR: LNGLY) whose portfolio consists of 100% ownership of the following companies: Magnolia LNG LLC (Magnolia LNG), a US-based subsidiary, which is developing an 8 million tonnes per annum (mtpa) or greater LNG export terminal, in the Port of Lake Charles, Louisiana, USA; Bear Head LNG Corporation Inc. (Bear Head LNG), a Canadian-based subsidiary, which is developing an 8 - 12 mtpa LNG export terminal in Richmond County, Nova Scotia, Canada with potential for further expansion; Bear Paw Pipeline Corporation Inc. (Bear Paw), which is proposing to construct and operate a 62.5 km gas pipeline lateral to connect gas supply to Bear Head LNG and LNG Technology LLC, a subsidiary which owns and develops the Company's OSMR LNG liquefaction process, a midscale LNG business model that plans to deliver lower capital and operating costs, faster construction, and improved efficiency, relative to larger traditional LNG projects.

Disclaimer

Forward-looking statements may be set out within this correspondence. Such statements are only predictions, and actual events or results may differ materially. Please refer to our forward-looking statement disclosure contained on our website at www.LNGLimited.com.au and to the Company's Annual Report and Accounts for a discussion of important factors that could cause actual results to differ from these forward-looking statements. The Company does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

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