BG has entered into an agreement with Samsung Heavy Industries Co. Limited of Korea for the purchase of two new build liquefied natural gas (LNG) ships.

The two 138,000 cubic metres ships are due for delivery in the second and third quarters of 2004 respectively. BG has also secured options with Samsung for a further six new build ships - three for delivery in 2005 and the remaining three to follow in 2006. The price of the ships is commercially confidential but is less than three per cent of BG Group's current market capitalisation.

Martin Houston, Executive Vice President, BG Group plc said: "This latest development in BG's liquefied natural gas portfolio further consolidates our growing position in the marketplace. This, and the fleet of ships we already own or control, will underpin BG's developing LNG projects and our recently announced US Lake Charles LNG terminal capacity agreement. The options over other new build ships leverages our ability to transport LNG when our Trinidad and Egypt LNG projects come to fruition, and to carry other parties' LNG."

Samsung will build, equip, launch and deliver the ships using the Gaztransport & Technigaz (Mk III) membrane cargo containment system - the standard LNG ship specification. The vessels will utilise dual-fuel steam turbine propulsion enabling them to sail at an average speed of 20 knots and a cruising range of about 21,000 nautical miles.

It is envisaged that these two new build ships will be utilised as part of an existing Contract of Affreightment that BG has to transport its equity LNG from Trinidad to the USA. This LNG comes from the two-train expansion currently taking place at the Atlantic LNG plant in Point Fortin, Trinidad, which is scheduled to come onstream in 2002 and 2003. In the interim period, BG will use two 125,000 cubic metres ships to transport this LNG until these new ships are delivered in 2004. The 125,000 cubic metres ships will be used for other LNG trades thereafter.

Notes to Editors

BG currently controls a fleet of six ships. It owns two 73,000 cubic metre LNG ships, the Methane Arctic and the Methane Polar, which are both on long-term charter to Enagas of Spain.

BG also has charters over four 125,000 cubic metre vessels from Osprey Maritime Limited. They are contracted to both long-term and short-term trades.

In Trinidad & Tobago, along with partners, BG has established itself as one of the world's lowest cost LNG manufacturers in the Atlantic LNG plant.
BG 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 May this year, BG announced that it had signed an agreement with CMS Energy of the US to take all of the available capacity at CMS Energy's LNG importation terminal in Lake Charles, Louisiana, for a period of 22 years from January 1, 2002. (click here to view press release)

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.