BG and partners sign Sale and Purchase Agreements for ELNG Train 2

BG Group plc and its Egyptian LNG (ELNG) Train 2 partners have signed the full Sale and Purchase Agreements (SPAs) for the sale of the entire 3.6 million tonnes per annum (mtpa) output of ELNG Train 2 to BG Gas Marketing Limited, a subsidiary of BG Group. Signature of the final agreements follows the agreement of principal terms on 2 July 2003.

The US$550 million ELNG Train 2 is scheduled to start commercial operations in 2006. The LNG to be purchased by BG Gas Marketing is intended to be supplied to BG LNG Services for the Lake Charles LNG import terminal in Louisiana, USA. This SPA will initially cover the entire output of ELNG Train 2 but provides for volumes to be switched to the proposed LNG import terminal at Brindisi in Italy, which is being developed by BG Group and ENEL

Supply of LNG to the Brindisi Terminal will be governed by a separate SPA which was also signed today. This supply arrangement is expected to begin approximately one year after Train 2 commercial operations start.

Jon Wormley, Executive Vice President and Managing Director, Europe and Mediterranean Region, said:

"Finalisation of the Sale and Purchase Agreements marks the completion of the commercial framework for ELNG Train 2. This has occurred in parallel with actual construction work on Train 2 and the development of the upstream facilities that will supply the gas. The result is that ELNG Train 2 maintains its aggressive schedule."

The Sapphire field in the BG-operated West Delta Deep Marine (WDDM) Concession, offshore the Nile Delta, is being developed to supply the gas for Train 2. Award of the engineering, procurement, installation and commissioning (EPIC) contract for the development of the Sapphire field was made in July 2003 to Technip Offshore UK.