Gujarat Gas Signs Gas Sales Agreement in India

Gujarat Gas Company Limited, in which BG Group plc is the majority shareholder, has agreed with Cairn Energy plc and partners to buy natural gas from the Lakshmi field, in the Gulf of Cambay, offshore west India.

The contract, for 1.27 million cubic meters a day (mcmd) for five years, is due to begin by July 1, 2002.

The CB-OS/2 block in the Lakshmi field, which will supply the gas, is ideally placed on the west coast of Gujarat State to feed Gujarat Gas's approximate 130,000 customer base. This gas supply will enable Gujarat Gas to extend its 1,500 kilometer pipeline system into the industrial cities of Ahmedabad and Vadodara in central Gujarat, subject to Government approval. Frank Chapman, Chief Executive, BG Group plc, said: "BG Group, through its investments in India, is developing integrated gas transmission and distribution systems in the west of the country. This agreement confirms BG's strong commitment to India and underpins Gujarat Gas's strategy for extending its network and for supplying growing markets in the region."

Gujarat Gas, India's largest privately owned gas distribution company, will also benefit financially from third party access in its 73 kilometer Hazira-Ankleshwar transmission pipeline, following a gas sales agreement signed between the Lakshmi field co-venturers and Gujarat Powergen Energy Corporation.

BG Group has a 65.13 per cent shareholding in Gujarat Gas. The remaining 34.87 percent is held by the Gujarat State Government, financial organizations and the public. It is a listed company in India.

The Lakshmi field was discovered in May 2000 and production is scheduled to begin by July 2002. Gas will be delivered to a new terminal being built by Cairn Energy and its partners at Suvali prior to entering Gujarat Gas's gas transmission system. The license consortium comprises operator Cairn Energy with a 50 per cent shareholding, TATA Petrodyne Limited which holds a 10 percent stake and ONGC, which holds the remaining 40 percent.