BG Group's BC LNG Export Project Names Spectra Pipeline, Asian Customers, NGI Reports

  BG Group's BC LNG Export Project Names Spectra Pipeline, Asian Customers,
  NGI Reports

Business Wire

DULLES, Va. -- June 21, 2013

BG Group has rearranged the natural gas pecking order in the Canadian
Northwest, filing with the National Energy Board (NEB) for a liquefied natural
gas (LNG) export license which reveals its choice of Spectra Energy's
(Westcoast) jumbo pipeline as its supply line over a TransCanada Corp. rival,
along with an expansive roster of Asian customers.

The Spectra pipeline project is virtually the same as one proposed by
TransCanada. Both would lay large diameter pipe across 500 miles of northern
Canadian wilderness to carry about 3 Bcf/d from the prolific Horn River and
Montney shale basins and others to the British Columbia (BC) coast, according
to a report in NGI’s Daily Gas Price Index.

And as for customers, it's no problem if you market to the world. "In terms of
LNG sales, BG Group has large-scale, long-term LNG sales contracts with major
buyers in the key LNG markets of Japan, China, India and Chile," BG's Prince
Rupert project description says.

"BG Group's contracts with China, at 8.6 million tonnes per year [mmt/y] in
total, will make it the largest supplier to this market. BG Group is also the
supply aggregator for the Singapore market with exclusivity over the first 3
mmt/y imported." BG describes the northern Canadian project as an addition to
its current supply and sales portfolio as one of the world's top LNG merchants
and transporters.

In the new export license application filed at the National Energy Board
(NEB), the United Kingdom-based BG Group confirms that its Pacific Coast
liquefaction plant and tanker dock construction project, called Prince Rupert
LNG, rely on the Spectra pipeline. A preliminary description of the pipeline
proposal has been deposited at the federal Canadian Environmental Assessment
Agency (CEAA) and its provincial BC counterpart.

The BG application arrived at the NEB less than three weeks after a
TransCanada subsidiary, Prince Rupert Gas Transmission LP, submitted a similar
preliminary BC pipeline project description to the CEAA. The TransCanada
proposal supports the Pacific Northwest LNG Project, an export scheme under
development by Calgary-based Progress Energy and its new owner, Malaysian
state gas and oil conglomerate Petronas.

The pipeline proposals do not mention each other and are not officially
competitors, just as the current nine entries in the BC LNG export project
lineup portray themselves as a budding industrial sector for harvesting vast
northern shale gas deposits instead of rivals for limited markets or supplies
(see Daily GPI, April 12). Plans to move gas across the Canadian Rockies and
signing up customers are essentials for financing of the billion dollar
projects and picking the winner(s).

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James Geanakos, 703-318-8848
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