UK: LNG contract signed

BG Group and its partners in Dragon LNG – Petroplus and Petronas – have announced the signing of the shareholders and other related agreements confirming their commitment to develop a GBP 250 million LNG importation terminal at Milford Haven in Wales, which is scheduled to be operational in the fourth quarter of 2007. The agreements also trigger the award of the Engineering, Procurement and Construction (EPC) contract. Preparatory works commenced in October, and permanent work will start on site at the beginning of next year, with a view to completion in the fourth quarter of 2007. Details of the award are being announced separately today by Dragon LNG. The equity partners in Dragon LNG are BG Group (50%), Petronas (30%) and Petroplus (20%). BG Group and Petronas also each hold 50% capacity rights, allowing them each to throughput 2.2 million tons per annum. The shareholders agreement signed today replaces the existing Memorandum of Understanding between Petroplus and BG Group and the Heads of Agreement between Petroplus and Petronas. The Dragon LNG importation terminal is to be built on the site of the existing Petroplus facility in Milford Haven in West Wales. The complex, which was purchased from Chevron in 1998, comprises 1.55 million cubic meters of storage capacity, deepwater jetties and a mothballed refinery, including a cogeneration facility. Up until now, the site has been used as a commercial tank farm for petroleum products. The development proposal provides for the adaptation of these facilities for use as an LNG terminal, with pipelines and other facilities as necessary for unloading LNG and transporting it to storage tanks onshore within the existing site.

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