BG Group plc has today taken a major step forward in the US gas market. BG has signed an agreement to take all of the available capacity at CMS Energy's liquefied natural gas (LNG) importation terminal in Lake Charles, Louisiana, for a period of 22 years from January 1, 2002.

The agreement creates a significant opportunity for BG Group in a key area where there is a highly liquid market and gas demand is forecast to increase. The terminal, strategically positioned on the Gulf Coast of the US, gives BG the capability to supply growing markets throughout the USA.

The deal also offers attractive opportunities for the Group's LNG business including a potential outlet for its developing LNG export projects around the world.

Frank Chapman, Chief Executive, BG Group plc, said: "This agreement underpins BG's growing reputation as The Integrated Gas Major by providing significant long-term access to the world's largest gas market. The agreement reinforces our LNG portfolio and puts BG in a pivotal position to supply the US natural gas market from our LNG export projects. There are major opportunities in the US downstream gas market which is being targeted as a channel for LNG by a number of producers. Until today, the Lake Charles facility was the only terminal in the US with significant uncommitted capacity."

Christopher A. Helms, President of the CMS Panhandle Pipe Line Companies, said: " This long-term contract with BG solidifies CMS Trunkline LNG's position as the US leader in the LNG industry. The agreement fulfils two of our objectives - to maximise the value of the terminal for CMS Energy and to ensure long-term natural gas supply attachment to our pipelines. This contract also helps to enhance long-term natural gas supply availability for the US as LNG plays an increasingly important role in the security of the US' energy supply."

BG has been assigned about 80 per cent of the terminal capacity from January 1, 2002 to August 31, 2005 whilst the remaining 20 per cent is committed to a third party. From September 1, 2005 BG will take 100 per cent of the capacity. The terminal currently has the capability to receive, store, vaporise and deliver an average daily send-out of 630 million standard cubic feet of gas, and has access to 15 major inter-state natural gas pipelines.

BG has several options for utilising capacity at the Lake Charles terminal including physical trading of LNG cargoes, using its own shipping resources and in the medium term, selling its own equity LNG production into the US market.

The Lake Charles facility, North America's largest operating terminal, presently receives gas from Africa, Asia, Australasia, Europe and South America. Future gas imports could also come from developing or expanding LNG export schemes in Angola, Egypt, Nigeria, Norway, Trinidad and Venezuela.

Notes to Editors

The Lake Charles terminal is regulated by the Federal Energy Regulatory Commission (FERC). BG will not be subject to price regulation.

BG Group plc is an integrated gas company operating in some 20 countries. In Trinidad & Tobago, along with partners, it has established itself as one of the world's lowest cost LNG manufacturers in the Atlantic LNG plant.

It is a 26 per cent shareholder in the Atlantic LNG Company that produces three million tonnes of LNG per annum for export to markets in Spain, Puerto Rico and the US. A further two trains are under construction to triple production to over nine million tonnes a year. In addition, the partners have recently agreed and commissioned front-end engineering design (FEED) work for a fourth train.

In Egypt, BG has recently signed an agreement with the Egyptian General Petroleum Corporation (EGPC) and Edison of Italy for an integrated LNG export project. A new company, Egyptian LNG, is being established to build, own and operate a proposed liquefaction plant with the first train anticipated to come onstream in 2005. The US is being targeted as a potential market for this export scheme.

In Indonesia, BG's reserves from exploration interests are targeted for the proposed Tangguh LNG project for both the traditional markets in Japan, Korea and Taiwan and emerging markets in the region. In southern Italy, the Group is proposing to construct a US$300 million natural gas importation facility in Brindisi.

BG is also playing an important role in the proposed development of a LNG importation terminal in the port of Pipavav, Gujarat State, India.

CMS Energy Corporation has annual sales of more than $11 billion and assets of about $16 billion throughout the US and in selected foreign markets. Its businesses incorporate electric and natural gas utility operations; independent power production; natural gas pipelines, gathering, processing and storage; oil and gas exploration and production; and energy marketing, services and trading.

CMS Panhandle Pipe Line Companies, which include CMS Panhandle Eastern Pipe Line Company, CMS Trunkline Gas Company and CMS Trunkline LNG Company, operate about 10,900 miles of mainline natural gas pipelines extending from the Gulf of Mexico to the Midwest and Canada. These pipelines access the major natural gas supply regions of the Louisiana and Texas Gulf Coasts as well as the Midcontinent and Rocky Mountains. The pipelines have a combined peak day delivery capacity of 5.4 billion cubic feet per day, 88 billion cubic feet of underground storage facilities and 6.3 billion cubic feet of above ground liquid storage facilities.