Gas

BG Group signs deal on Tunisian on Barca Power Project

27 May 2003 – BG Group plc announced today that a Memorandum of Undertaking has been signed with the Government of Tunisia in relation to the development of the $250m Barca Power Project in Sfax, Tunisia.

The proposed 500 MW combined-cycle gas turbine (CCGT) Barca power plant would be built adjacent to BG’s Hannibal processing site, 21 kilometres south of Sfax. The plant would use up to 120 million standard cubic feet per day of unprocessed gas reserves from BG’s offshore interests in the Miskar Concession and, potentially, the Hasdrubal gas/condensate discovery allowing BG to increase its annual gas sales.

Subject to agreeing commercial arrangements and obtaining all necessary authorisations from the Tunisian Government, construction of the power plant is scheduled to begin in the second quarter of 2004 with full commercial operation
expected in late 2006.

Development of the Barca power plant would facilitate the acceleration of BG’s existing Miskar field, where reserves have significantly increased following successful in-fill drilling and reappraisal in 2002. BG is working on a development plan for these reserves which would result in further investments in the Miskar field.

In addition, BG has confirmed its intention to install a Liquefied Petroleum Gas (LPG) plant at the Hannibal site to supply the Tunisian market. LPG would be bottled and distributed by a local Tunisian company. BG also confirmed its intention to construct a 67 kilometres condensate pipeline from Hannibal to La Skhira to transport increased condensate from additional gas production from the Hasdrubal field. Engineering work is continuing to define these downstream projects, which are anticipated for commissioning in 2006.

BG has also reached agreement with the Tunisian Government on the renewal of its Ulysse permit, which may contain a southerly extension of the Miskar field as well as other gas prospects which require further definition. The renewal of
the Ulysse permit includes an extension of 900 square kilometres in an area to the east of the Hasdrubal field. A programme of seismic and drilling work has been agreed.

Martin Houston, Executive Vice President, BG Group plc, said: “An important milestone has been reached with the Government of Tunisia as BG Group seeks to participate in the country’s power generation sector. The Barca power project builds on our strategy in Tunisia to create integrated projects between our upstream interests and downstream operations. Our proposed investment in this project confirms our long-term confidence in Tunisia and its energy industry.”


There are matters discussed in this media information that are forward looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors, which could cause actual results to differ from the forward-looking statements, refer to the Company’s annual report and accounts for the year ended 31 December 2002.