BG Group plc announced today a significant gas discovery in the Sicily Channel, offshore Italy. The well was drilled and tested by Eni S.p.A., on behalf of partners in the consortium.

The Panda exploration prospect, located 20 kilometres off southern Sicily, was drilled in 460 metres of water and encountered a gross gas interval of 300 metres. During testing, the well flowed an aggregate 19 million cubic feet per day of natural gas from two intervals. These rates were constrained by the limits of the testing equipment. Initial estimates of reserves are in the range of 300-400 billion cubic feet of gas.

Martin Houston, Executive Vice President, BG Group plc, said: "This is an encouraging result from the first well drilled in BG's refocused exploration portfolio in Italy, centred on the Sicily Channel and the Po Valley. It is expected to provide a building block for our upstream and downstream activities in the country."

The discovery, the first to be drilled by the consortium, lies in the Eni-operated licence G.R14.AG. In 2000, BG Group took a 37.5 per cent interest in the licence. Eni holds 37.5 per cent equity and Edison 25 per cent. The consortium has rights to acreage totaling 2,400 square kilometres in this area.

Notes to Editors

BG Group plc has been active in Italy since 1992. It has a portfolio of 12 exploration permits, six of which are operated. With partners Eni, Edison and Petrorep, it is also involved in exploration activities in the Po Valley.
BG Group is a 32 per cent shareholder in Serene S.p.A., a joint venture company, which owns and operates 400 megawatts of co-generation units located in five sites adjacent to Fiat Auto factories.

BG Group is promoting a US$300 million liquefied natural gas (LNG) importation terminal in Brindisi on the south east coast of Italy. It is envisaged that a first train, of four billion cubic metres of gas, could be imported into the Italian market from as early as 2006. A decision on approval of the project is expected in due course.