BG Group and partners in Dragon LNG sign agreements to trigger go-ahead for Milford Haven importation terminal

abarrelfullabarrelfull wrote on 17 May 2012 10:42

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1 December 2004

BG Group and its partners in Dragon LNG – Petroplus and Petronas – have today announced the signing of the shareholders and other related agreements confirming their commitment to develop a £250 million LNG importation terminal at Milford Haven in Wales, which is scheduled to be operational in the fourth quarter of 2007.

The agreements confirm the ownership of the terminal (BG Group 50%, Petronas 30% and Petroplus 20%), as well as the 20 year arrangements governing the use of capacity rights (BG Group 50%, Petronas 50%) allowing BG Group and Petronas to each throughput 3 billion cubic metres (106 billion cubic feet) of gas per year, from around 2.2 million tonnes of LNG per year.

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.

Speaking today, Jon Wormley, BG Executive Vice President and Managing Director,
North West Europe, said: "Today's signing represents a major milestone in the Dragon LNG project. It gives tangible substance to the aims of BG and its partners to contribute to security of supply in the UK, by helping address the increasing demand for competitively priced natural gas. It forms a significant component in the continuing development of BG’s leading position as a major LNG player in the Atlantic Basin, as well as bringing positive economic benefits to the people of West Wales."

Notes to Editors:

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 tonnes 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 metres 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. From here, natural gas will be delivered into the National Transmission System.

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