BG Group receives approval for LNG terminal in Italy

By OGJ editors

HOUSTON, Nov. 26 -- BG Group PLC earlier this month received approval to construct and operate a 330 million euro LNG terminal in Brindisi Port, on the southeast coast of Italy. BG said it expects to sanction the project by yearend 2003.

The Brindisi terminal, which will be constructed in two phases and operated by BG, is expected to be operational by yearend 2006, BG said. Phase I will be designed with throughput of 3 million tonnes/year of LNG. Phase II will double this capacity to 6 million tonnes/year.

The terminal's location on the Mediterranean Sea is in close proximity to areas of high power generation demand in the Puglia region, BG said, and is within 5 km of Snam Rete Gas's 29,600 km natural gas pipeline system.

"Approval for the Brindisi project gives BG Group the go-ahead to make one of the largest ever investments in Italy by a UK-listed company," said Martin Houston, executive vice-president, BG Group. Italy's energy demand continues to rise with forecasts for 2010 expected to reach levels 25-30% higher than current demand, BG said. Currently, the country is a net importer of natural gas and has one LNG receiving terminal in operation on the its northwest coast.

Preliminary front-end engineering design work has been conducted on the terminal and work to finalize the plant's design is under way, BG said.

"Negotiations for LNG supply to the terminal and for onward sale to gas users are being progressed," the company said.

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