BG Secures Capacity in Bolivia-Brazil Pipeline

BG Group and Petrobras have signed an agreement to assign a proportion of Petrobras' 30 million cubic meters per day of firm capacity in the Brazilian pipeline Transportadora Brasiliera Gasoduto (TBG) to BG Brazil. This is the first time that such capacity in TBG has been assigned, and will allow BG to continue to supply the growing gas market in the Comgas area.

BG has also extended its existing Gas Sales Agreement with Comgas - the largest gas distribution company in the state of Sao Paulo, Brazil - in which BG holds a 60.5% interest. BG is contracted to supply 0.65 million cubic meters per day, produced from its 100% La Vertiente field in Bolivia, during the period 2003 to 2011. The gas will be sold to Comgas principally for use in the industrial and co-generation sectors.

BG Group works across the spectrum of the gas chain. Active on five continents in some 20 countries, BG operates four business segments - Exploration & Production, LNG, Transmission & Distribution and Power. BG is a significant holder of hydrocarbon reserves on the UK Continental Shelf, where it operates the Blake, Armada and Easington Catchment Area fields. Internationally, BG's operational strategy is to develop gas markets and construct infrastructure in tandem with its exploration interests. BG's core areas are the UK, Egypt, Kazakhstan, South America, India and Trinidad & Tobago.

In the Southern Cone, BG holds a significant position through the gas chain in the fast developing natural gas market. The group has exploration acreage in Brazil, and both exploration and production interests in Bolivia from where both the local and export markets are served. The Bolivia-Brazil pipeline, in which BG has an equity holding, opened up Brazil as a market for BG's Bolivian equity gas reserves. In April 2001, the Brazilian regulator awarded BG firm capacity rights in the Bolivia-Brazil pipeline until December 2002, allowing BG to deliver equity gas to Comgas from its wholly-owned properties in Bolivia, thus completing an integrated gas chain.

BG also has a stake in the Southern Cross and the Gas Link pipelines, which entered operation in November 2002, and take gas from the Argentine system to Montevideo in Uruguay. A Liquefied Natural Gas export scheme is under consideration to take gas from BG's Bolivian gas fields, where BG is the second largest holder of reserves, to a liquefaction facility on the Pacific coast and to then ship the gas to the North American market.