BG Group, NLNG Strike Supply Deal

BG Group plc has signed a Sale and Purchase Agreement with Nigeria LNG (NLNG) for the acquisition of 2.25 million tonnes per annum (mtpa) of LNG for a 20-year term from the planned Train 7 project in Finima, Bonny Island, Nigeria.

Cargoes will be delivered on an ex-ship basis to BG Group's North American marketing business at Lake Charles, La.

Martin Houston, BG Executive Vice President and Managing Director, North America, Caribbean and Global LNG, said:

"This agreement with NLNG adds to our existing supply arrangements through Trains 4 and 5 which came into effect last year. It enhances the profitable long-term growth of BG's LNG supply portfolio and reflects the strength of BG's competitive position in the Atlantic Basin."

BG Group plc is a global natural gas business. Active on five continents in 25 countries, it operates four business segments Exploration and Production, LNG, Transmission and Distribution and Power.

NLNG Train 7 is planned as an 8.4 mtpa facility. The shareholders in NLNG are Nigerian National Petroleum Corporation (NNPC) (49%), Shell Gas B.V., (25.6%) Total LNG Nigeria Limited (15%) and ENI International (N.A.) N.V. S.a'r.l. (10.4%).

In January 2006, BG entered into a Memorandum of Understanding (MoU) with Nigeria's Brass LNG for the acquisition of LNG with initial deliveries expected to start during 2011. Final volumes will be confirmed on completion of the Sale and Purchase Agreement that is expected in 2007.

In February 2006, BG signed a Joint Venture Project Development Agreement for a liquefaction plant at Olokola (OKLNG) on the southwestern coast of Nigeria. The proposed project will comprise four LNG trains of approximately 5.5 mtpa each, with the development envisaged in two phases of 11 mtpa capacity. BG Group has a 13.5% share in the project and the remaining partners are - NNPC (49.5%, Chevron OKLNG Holdings Limited (18.5%) and Shell Gas and Power developments B.V. (18.5%).

In January 2006, BG Group (along with our partners Sahara Energy and Seven Energy) signed a Production Sharing Contract with NNPC with respect to Block 332 offshore Nigeria. BG holds a 45% interest in and operatorship of this block. Block 332 is located in deep water (100 1,000m) offshore western Niger Delta, approximately 100km southeast of the commercial capital Lagos and lies between latitudes 5 50'N and 6 20'N.

In the USA, BG LNG Services LLC, (BGLS) holds, through 2028, 100% of the firm capacity rights at North America's largest operating LNG importation terminal, Lake Charles in Louisiana. This facility has storage capacity of 9 billion cubic feet (bcf) and sustained send out capacity of 1.8 billion cubic feet per day (bcf/d).

Additionally, BGLS holds, through 2027, firm regasification rights of 446 million standard cubic feet per day (mmscf/d) at the Elba Island LNG terminal near Savannah, Georgia. Expansion work is expected to increase its throughput capacity to 1.17 bcf/d from 2012.

BG has long-term purchase agreements in place with Equatorial Guinea LNG Train 1, S.A. for the supply of 3.4 mtpa for 17 years from 2007; with Nigeria LNG Ltd, for the supply of 2.3 mtpa for 20 years which began in January 2006; with Egyptian LNG Train 2 for the supply of 3.6 mtpa for 20 years and with Atlantic LNG Train 4 for the supply of BG Group's liquefaction capacity (28.89%) in the 5.2mtpa facility under long-term contract. BG is also a shareholder in Egyptian LNG Train 1 which has an output of 3.6 mtpa all pre-sold to Gaz de France. A third Egyptian LNG train is under consideration.

ALNG Train 1, which came into operation in April 1999, has 3.1 mpta capacity (BG Group 26% shareholder). Trains 2 and 3, which became operational in August 2002 and April 2003 respectively, each have 3.4 mtpa capacity (BG Group 32.5% shareholder). Train 4 (BG Group 28.89% shareholder), is a fully integrated project for BG Group, involving the production and liquefaction of gas in Trinidad & Tobago, the shipping of LNG to Lake Charles and the subsequent regasification for onward sale into the US market.

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