BG Group and KazMunayGas announce signing of downstream co-operation agreement

BG Group plc (“BG Group” - LSE: BG.L) and the Kazakh national oil and gas company, JSC National Company KazMunayGas (“NC KMG”), today announced the signing of an agreement to co-operate on a joint analysis of the Kazakh natural gas market, intended to explore a range of opportunities in natural gas utilisation and downstream development in the Republic.


The agreement follows the completion of BG Group’s Natural Gas Study for Kazakhstan, which was submitted to NC KMG in January 2008. The study was carried out by BG Group as a result of an arrangement reached during the meeting between the Republic of Kazakhstan President Nazarbayev and BG Group Chief Executive Frank Chapman in March 2006.


The BG Group Natural Gas Study focused on a number of key aspects integral to the expansion of natural gas usage in Kazakhstan, including: energy policy and regulation; connecting supply to markets; gas-fired power generation; and the development of markets to supply natural gas-powered vehicles and trains.


The agreement was concluded today with a formal signing ceremony at the annual Kazakhstan International Oil & Gas Exhibition (KIOGE) in Almaty, Kazakhstan. It proposes a range of measures to increase energy supply diversity and achieve greater environmental efficiency. Enhancements in domestic energy efficiency would also enable an increase in the Republic’s petroleum exports.


NC KMG President Mr. Kairgeldy Kabyldin said: “Working jointly to develop gas markets in Kazakhstan offers the prospect of environmental, economic and social benefits for the Republic. The study provides the partners with a positive blueprint for the future.”


BG Group Executive Vice President and Managing Director, Europe and Central Asia, Mark Carne, said: “As a long-term investor in Kazakhstan, BG Group looks forward to working with KMG to examine the potential for greater domestic gas utilisation to drive the country’s future growth.”