BG & Southern Natural Gas to Expand Elba Island LNG Terminal

BG Group's subsidiary, BG LNG Services, has entered into agreements with two wholly owned subsidiaries of El Paso Corporation to further expand the storage and throughput capacity at the Elba Island liquefied natural gas (LNG) terminal and to participate in a new interstate pipeline -- Elba Express. The expansion and new pipeline will benefit the southeastern U.S. by adding more LNG import capacity directly into the market area. Both projects will be filed with the U.S. Federal Energy Regulatory Commission (FERC) for approval in the third quarter of 2006.

The expansion of Elba Island will increase BG's storage capacity from 4.0 billion cubic feet (bcf) to 8.2 bcf and will increase BG's vaporization capacity from 675 million cubic feet per day (mmcfd) to 1.17 billion cubic feet per day. The expansion is expected to be completed before the end of 2012.

As part of the expansion project, BG also entered into an agreement with SNG for transportation capacity on the recently announced Elba Express Pipeline. This new 191-mile interstate natural gas pipeline will allow BG to deliver natural gas from Elba Island to additional markets in Georgia and, through interconnections with other pipelines, to the southeastern and eastern United States.

Martin Houston, BG executive vice president and managing director, North America, Caribbean and Global LNG, said, "The United States is one of our core markets and this agreement once again demonstrates BG's commitment to increasing LNG supply to the U.S. We have a clear market strategy which will continue to drive growth in our North American business."