The 1,000 Megawatt (MW) Santa Rita power station in the Philippines, which switched to natural gas following the opening of the Shell/Texaco Malampaya gas field in October 2001, entered full commercial operations on gas on 1 January 2002.

The power station, in which BG Group holds a 40% interest, exported full output of 1,002 MW to the national power grid for the first time on 14 November 2001 by burning natural gas instead of the imported liquid fuels, including condensate, it had been using since it became operational in August 2000.

The US$4.5 billion "Malampaya Gas to Power" project, bringing electricity to homes and businesses in the Philippines capital of Manila, was inaugurated in October by President Gloria Macapagal Arroyo. In addition to Santa Rita, BG's participation in the project involves the construction of the 500 MW San Lorenzo power station, which is scheduled to begin operation using natural gas in the second quarter of 2002.

BG Executive Vice-President David McManus said:

"The Malampaya project is the largest industrial investment in the history of the Philippines, and will help the economy by greatly reducing the dependence on imported fuels. With Santa Rita running well, it won't be long now before San Lorenzo starts full commercial operation and completes BG's 1500 MW commitment. Together, they represent a cornerstone in the overall project and a major step towards the creation of an economic natural gas industry in the Philippines."

BG has a 40% stake in the Santa Rita combined cycle plant, the largest of its kind in the Philippines. It is located near Batangas on the island of Luzon (which includes Manila) and is capable of providing approximately 20 per cent of the island's electricity. The plant is owned by First Gas Holdings Corporation - a joint venture between BG Group and First Generation Holding Corporation (60%). The operator is Siemens Power Operations, which was also the main engineering, procurement and construction contractor.

Power from Santa Rita is sold to the Manila Electric Company (Meralco) under a 25-year power purchase agreement.

The 500 MW San Lorenzo power plant project, located adjacent to Santa Rita, is owned by FGP Corp, a joint venture between BG and First Generation Holdings Corporation. Construction of the plant began in June 2000, and the shareholdings and sales arrangements are the same as for Santa Rita.

Notes to Editors

BG Group plc, The Integrated Gas Major, works across the spectrum of the gas chain. Active on four continents in some twenty countries, BG operates four business segments - Exploration & Production, Liquefied Natural Gas, 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 and Trinidad & Tobago.