Pipeline Completion Allows Argentine Gas to Flow to Uruguay

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18 November 2002

BG Group has announced that, on 8 November 2002, first gas flowed beneath the River Plate from Argentina to Montevideo, Uruguay, through the $160 million Gasoducto Cruz del Sur (Southern Cross Pipeline or GCDS). The pipeline will be inaugurated by President Jorge Batlle of Uruguay later in November.

The BG-operated Southern Cross pipeline operates under a 30-year Concession Agreement awarded by the Government of Uruguay in March 1999. BG is a 40% shareholder, and the other partners are Pan American Energy (30%), ANCAP - the Uruguayan state hydrocarbon company - (20%) and Wintershall (10%).

Speaking today, BG Executive Vice President for South America Rick Waddell said:

"The completion of the Southern Cross pipeline marks an important achievement for BG and its partners in South America. As well as fulfilling a key economic need for the markets of Montevideo, the pipeline is a new example of regional integration between Mercosur countries."

The main customer for Argentine natural gas in Uruguay will be UTE (the state electricity utility), which will burn gas in its Montevideo-based power plant. Gazeba, the capital's local distribution company, and CONECTA, the distribution company for the rest of the country, are also expected to become customers, thereby reducing their current dependence on manufactured gas and LPG. UTE has entered into a long term gas sales agreement with Pan American/Wintershall for gas to be supplied from their Argentine reserves.

The Southern Cross pipeline Concession covers a possible extension from Uruguay to the Brazilian border, in order to supply possible markets in Southern Brazil. A number of marketing and technical studies have been completed, but are on hold pending greater marketing definition and development.

Notes to Editors

The Gasoducto Cruz del Sur (GCDS) pipeline comprises 193 kilometres of 24/18-inch high pressure trunk line, with a capacity of approximately 5 million cubic metres a day. 55 kilometres crosses the River Plate, with the remaining length resting onshore in Uruguay. The facilities also include approximately 200 kilometres of low pressure laterals, of varying diameters, and 28 Above Ground Installations.

A separate, 40 kilometre, 18-inch pipeline - known as the " Link" - was completed in April 2002 at a cost of $US 18 million, and connects the start of the GCDS pipeline in Argentina with the Argentine national grid, operated by Transportadora de Gas del Sur ("TGS"). The "Link" pipeline is operated by GasLINK, which is 51% owned by Dinarel and 49% owned by TGS. BG has an indirect 25.50% participation in the Link pipeline by reason of its 50% ownership of Dinarel.

BG Group plc -The Integrated Gas Major - works across the spectrum of the gas chain. Active on five continents in some 20 countries, BG operates four business segments - Exploration & Production, LNG, Transmission & Distribution and Power. BG is a significant holder of hydrocarbon reserves on the UK Continental Shelf, where it operates the Blake, Armada and Easington Catchment Area fields. Internationally, BG's operational strategy is to develop gas markets and construct infrastructure in tandem with its exploration interests. BG's core geographical areas are the UK, Egypt, Kazakhstan, South America, India and Trinidad & Tobago.


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