BG intends to acquire a 50 percent equity stake in Dragon LNG Limited, a special purpose project company established to develop the project. In addition to this equity position, BG intends initially to contract for the use of 2.2 million tons per annum (mtpa) of capacity at the facility. This represents half of the initial planned throughput capacity. The process for the sale of the remaining capacity is continuing.
Martin Houston, Executive Vice President and Managing Director, North America, Caribbean and Global LNG, said: "BG is already a major supplier of gas to the UK and is committed to continuing to seek new ways to serve this growing market. The development of this facility with our partner, Petroplus, will allow us to deliver competitively priced natural gas to meet expected market requirements. This project will extend our position in the UK and strengthen our LNG leadership position in the Atlantic Basin."
Paul van Poecke, Chief Executive Officer, Petroplus Logistics, said: "We are very pleased to announce the successful conclusion of an MoU with BG. The transaction is a significant step forward in Petroplus' strategy of rebalancing activities and is consistent with our broader strategic agenda."
The new facility, which is expected to be operational in 2007, has received planning permission and would deliver natural gas into the UK market via the national transmission system. With the UK set to become a net importer of gas in the later half of this decade, it would provide increased security of supply through access to a range of international gas supply sources.
The existing Milford Haven site includes marine docking and unloading facilities at three berths. The development proposal provides for the adaptation of these facilities for use as an LNG tanker berth, with pipelines and other facilities as necessary for unloading LNG and transporting it to storage tanks onshore within the existing site.
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