BG plc, Agip of Italy and Deminex of Germany have signed a production sharing contract with the Government of Trinidad & Tobago to open up a new hydrocarbon province, off Trinidad's northern coast.

The North Coast Marine Area contains the undeveloped Hibiscus, Orchid, Iris and Poinsettia gas fields, which have potential reserves of more than three trillion cubic feet of gas.

The consortium, with BG plc as operator, will immediately carry out further exploration activity in the area, which is 40 kilometres offshore and covers 230,000 acres. Two exploration wells will be drilled in the next six months. The consortium acquired extensive 3D seismic data at the end of last year.

The primary market for North Coast gas is the potential expansion of the Atlantic LNG Company of Trinidad & Tobago's plant at Point Fortin. BG plc is a major shareholder in the company, with a 26 per cent shareholding. The $1 billion export plant, currently under construction, is scheduled to come on stream in winter 1998/9.

Frank Chapman, Managing Director of BG plc's Exploration & Production division, signed the contract in Port of Spain yesterday, with the Minister of Energy, Senator Finbar Gangar and senior representatives of Agip and Deminex.

Mr Chapman said: "This agreement marks an important step forward for the development of Trinidad's offshore gas industry. It opens up a new hydrocarbon province for the country, and will help the economy to develop further.

"For BG plc, it enables us to prove up further reserves of gas, for use in the proposed second phase of the Atlantic LNG project, and to build on the success of our Dolphin field."

The production sharing contract will have an exploration period of six years, beginning on signing, and an option to move into a development phase for the following 25 years. The areas formerly known as DAB East and West have been redesignated North Coast Marine Area 1.

BG plc is already a major supplier of gas to Trinidad & Tobago. It is the operator, and 50 per cent partner with Texaco, of the offshore Dolphin field, currently supplying 164 mmcfd to the National Gas Company under a 20-year supply agreement. The field came on stream last year.

Notes for editors

North Coast

The newly-designated North Coast Marine Area 1 comprises two former licence areas:

• the DAB West licence, in which BG plc holds a 60 per cent interest, with 20 per cent each being held by partners Agip and Deminex.

• the DAB East licence, in which BG plc, Agip and Deminex each hold a one-third share.

BG assumed operatorship of the two licences in 1989, following the purchase of Tenneco's assets in Trinidad and Tobago.

The DAB East and DAB West licences were originally negotiated in 1970, with the primary objective of discovering and producing oil. Following gas discoveries in the 1970s and early 1980s, no further development work was undertaken. The wells to be drilled by the BG consortium will be the first in the area for more than 16 years.

A drill ship is already contracted to begin drilling off the North Coast, and is en route to Trinidad from Singapore. The first well will begin drilling in May.

Dolphin Field

The Dolphin gas field, operated by BG plc on behalf of a 50/50 BG plc/Texaco partnership, entered production in March 1996.

The field, off Trinidad's east coast, will supply up to 275 million cubic feet of gas per day to the National Gas Company of Trinidad and Tobago under a 20 year supply contract. Reserves are estimated at more than one trillion cubic feet.

BG plc and Texaco each have 50 per cent interests in Blocks E and 6d, in the offshore eastern region of Trinidad, giving the consortium a total of 200,000 acres in the area.

Natural gas export project

The Atlantic LNG Company of Trinidad and Tobago - in which BG plc is a 26 per cent shareholder - is building a US$1 billion liquified natural gas plant at Point Fortin, Trinidad.

Sales agreements for the three million tonnes of LNG annual output have been signed with Cabot for markets in north-eastern United States (60 per cent), and Enagas for sales in Spain (40 per cent). First supplies are due for the 1998/99 winter season.

Participants in Atlantic LNG are BG plc (26 per cent); Amoco Trinidad LNG (34 per cent); Repsol (20 per cent); Cabot LNG Limited (10 per cent); and NGC Trinidad and Tobago LNG Limited (10 per cent).