1st Feb 2008 07:59
BG GROUP plc01 February 2008 News Release 1 February 2008 BG Group announces alliance with leading Australian coal seam gas company to co-operate in upstream and development of domestic and export markets BG Group plc today announced an agreement to establish an alliance withQueensland Gas Company Limited (QGC), a leading coal seam gas exploration andproduction company supplying the Queensland market. Under the terms of theagreement, the two companies will co-operate in the exploration and developmentof onshore coal seam gas acreage as well as in the development of domesticmarket opportunities and a new LNG production and export facility on theQueensland coast. BG Group will acquire: a 20% interest in QGC's coal seam gas assets in the SuratBasin, South West Queensland and in certain other related QGC assets; and a 9.9%stake in QGC, for a total consideration of £299m. The Group will also acquire a further 10% interest in QGC's coal seam gas andother assets on the earlier of: either the certification of proven and probable(2P) reserves of 7,000 petajoules (approximately 6.6 tcf); or the finalinvestment decision approving the budget for the construction of a LNG facilityto process and export jointly-marketed coal seam gas. BG Group will hold a 70%interest in the LNG facility and will offtake 100% of its initial plannedproduction. The agreement is conditional upon necessary governmental andregulatory approvals. The alliance will leverage the expertise of both companies. BG Group is a globalenergy company and QGC has extensive expertise in the exploration and productionof coal seam gas - an established hydrocarbon source in Australia and othercountries. The agreement marks BG Group's first investment in Australia. QGC and BG Grouphave also agreed to cooperate in the evaluation of further coal seam gasopportunities in India, where BG Group already has established upstream anddownstream business interests. BG Group Chief Executive Frank Chapman said: "Our focus is on connectingcompetitively-priced gas to high-value markets. This alliance with QGC willsecure access to new and commercially-proven sources of gas, with significantreserves potential within reach of Australian and Asia-Pacific markets. We lookforward to working with QGC to create value for both parties." Notes for Editors BG Group plc is a global natural gas business. Active on five continents in 25countries, it operates four business segments - Exploration and Production, LNG,Transmission and Distribution and Power. For further details regarding Queensland Gas Company, please visit http://www.qgc.com.au/ Background: Natural gas in coals (coal seam gas) occurs when the coal is formed deepunderground by a process of heating and compressing plant matter. The gas istrapped in coal seams (typically 300-600 metres underground) by water pressure. The coal seam gas is extracted via wells which are drilled down through the coalseams. The water is pumped out, and the natural gas is released from the coal.The gas is then processed to remove water and piped to a compression plant forinjection into gas transmission pipelines. The produced water is usually conveyed to an evaporation pond, although QGC isconducting trials to use it for agricultural irrigation and as potable water,after treatment. Coal seam gas in the Surat Basin of Queensland contains more than 98 % methane,with very small amounts of nitrogen and carbon dioxide. Website: www.bg-group.com There are matters discussed in this media information that are forward lookingstatements. Such statements are only predictions and actual events or resultsmay differ materially. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to theCompany's annual report and accounts for the year ended 31 December 2006. TheCompany does not undertake any obligation to update publicly, or revise, forwardlooking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Notes to Editors: BG Group plc is a global natural gas business. Active on five continents in 25countries, it operates four business segments - Exploration and Production, LNG,Transmission and Distribution and Power. Enquiries: BG Group Communications: +44 (0) 118 929 2462 Out of hours media mobile: +44 (0) 791 718 5707 Investor Relations: +44 (0) 118 929 3025 Queensland Gas Company Ruth Mathewson +61 7 3020 907 Mobile +61 0403 852 691 Website: http://www.qgc.com.au/ - ends - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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