BG Group plc has announced today that it has entered into a long-term charter agreement for a new liquefied natural gas (LNG) ship from Golar LNG Limited.

The 138,000 cubic metres capacity ship will be constructed by Daewoo of Korea and is due to be delivered in March 2003. The charter is for a fixed 20-year period with options to extend this term.

As part of this transaction the existing contractual arrangements between BG Group and Golar LNG will be simplified. These contractual arrangements, which began in 1999, secured charters over four 125,000 cubic metres vessels - Golar Freeze, Khannur, Hilli and Gimi. Under the new arrangement, charter rates will be readjusted benefiting BG Group by reductions in the long-term and providing Golar LNG with improved cash flow in the near-term.

Martin Houston, Executive Vice President, BG Group plc, said: "This agreement secures capacity for BG Group to meet its projected liquefied natural gas shipping requirements in 2003 and beyond. BG Group is developing several proposed LNG import and export projects around the world and our shipping fleet is central to this strategy. Today's development strengthens our alliance with Golar LNG and we look forward to the long-term benefits that the deal will bring to both parties."

Tor Olav Trøim, Chief Executive Officer, Golar LNG Limited, said: "Golar LNG is delighted to have been able to conclude another long-term deal. We see BG Group as a pivotal player in the LNG industry and one of our key clients in the future. The new building charter secures a stable long-term cash flow for Golar LNG and creates a good financial fundament to develop the company further."

In July 2001, BG Group entered into an agreement with Samsung Heavy Industries Company Limited of Korea for the purchase of two LNG ships for delivery in 2004, together with options for the construction of six additional vessels. In order to achieve the earlier delivery Golar LNG can provide, BG Group has elected to be released, without penalty, from its commitment in respect of one of these two ships scheduled for delivery in 2004, while retaining all of the ship options.

Notes to Editors

BG Group currently controls a fleet of six ships, which includes the four Golar LNG vessels and two 73,000 cubic metres LNG ships that it owns. These are the Methane Arctic and the Methane Polar which are both on long-term charter to Enagas of Spain.

In Trinidad & Tobago, along with partners, BG Group has established itself as one of the world's lowest cost LNG manufacturers in the Atlantic LNG plant.

BG Group 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 USA. A further two trains are under construction to triple production to over nine million tonnes a year. In addition, the partners have commissioned front-end engineering design (FEED) work for a fourth train.

In May this year, BG Group announced that it had signed an agreement with CMS Energy of the USA 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.

In Egypt, BG Group has signed an agreement with the Egyptian General Petroleum Corporation and Edison of Italy for a proposed 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 USA is being targeted as a potential market for this export scheme.

In Indonesia, BG Group'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 Group is also developing a proposed importation and re-gasification project in the port of Pipavav, Gujarat State on the west coast of India.