BP (BP)

New Market Development and LNG

        Our new market development and LNG activities are focused on developing worldwide opportunities to capture international natural gas sales for our upstream natural gas resources.

        BP Exploration and Production has interests in major existing LNG projects in Trinidad and Tobago, ADGAS in Abu Dhabi, the North West Shelf in Australia and we also supply gas (from Virginia Indonesia Co.) to the Bontang LNG project in Indonesia. Additional LNG supplies are being pursued through expansions of existing LNG plants in Trinidad and Tobago, the North West Shelf in Australia and greenfield developments such as Tangguh in Indonesia.

        During 2004, we have taken a number of important steps to access major growth markets for the Group's equity gas. In Asia Pacific, agreements for the supply of LNG from the Tangguh development (BP 37.16%) were signed with POSCO and K Power for supply to South Korea and with Sempra for supply to Mexico and US markets. Together with an earlier agreement to supply LNG to China, markets for more than 7 million tonnes a year (9.7 bcma) of Tangguh LNG have been secured. In March 2005, Tangguh received key Government approvals for the two train launch and is now executing the major construction contracts, with start-up planned in late 2008.

        During the year, BP ordered four new LNG carriers from Hyundai Heavy Industries of South Korea and agreed options for an additional four ships.

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        In the Atlantic and Mediterranean regions, significant progress was also made in creating opportunities to supply LNG to North American and European gas markets. In Egypt, we signed an agreement with Egyptian Natural Gas Holding Company (EGAS) to purchase 1.45 billion cubic metres per year of LNG (see Exploration and Production in this Item on page 38). Agreements were finalized with NGT Transco which will make BP and Sonatrach of Algeria the first companies for several decades to import LNG into the UK market from 2005.

        Plans for the development of new LNG import terminals on the US East and Gulf coasts continued. These new access points to market, together with existing capacity rights at Cove Point in Maryland, US, Bilbao in Spain and Isle of Grain, UK, should provide important opportunities to maximize the value of the Group's gas supplies from Trinidad, Egypt and elsewhere.

        In Southeast China, the construction of the Guangdong LNG Terminal and Trunkline Project (BP 30%) continued on track. First gas is scheduled for mid-2006 under the gas purchase agreement signed with Australia LNG in October 2002 that will involve deliveries from the North West Shelf project (BP 16.7%).

New Market Development and LNG

        Our new market development and LNG activities are focused on developing worldwide opportunities to capture international natural gas sales for our upstream natural gas resources.

        BP Exploration and Production has interests in major existing LNG projects in Trinidad and Tobago, ADGAS in Abu Dhabi, the North West Shelf in Australia and we also supply gas (from Virginia Indonesia Co.) to the Bontang LNG project in Indonesia. Additional LNG supplies are being pursued through expansions of existing LNG plants in Trinidad and Tobago, the North West Shelf in Australia and greenfield developments such as Tangguh in Indonesia.

        During 2004, we have taken a number of important steps to access major growth markets for the Group's equity gas. In Asia Pacific, agreements for the supply of LNG from the Tangguh development (BP 37.16%) were signed with POSCO and K Power for supply to South Korea and with Sempra for supply to Mexico and US markets. Together with an earlier agreement to supply LNG to China, markets for more than 7 million tonnes a year (9.7 bcma) of Tangguh LNG have been secured. In March 2005, Tangguh received key Government approvals for the two train launch and is now executing the major construction contracts, with start-up planned in late 2008.

        During the year, BP ordered four new LNG carriers from Hyundai Heavy Industries of South Korea and agreed options for an additional four ships.

        In the Atlantic and Mediterranean regions, significant progress was also made in creating opportunities to supply LNG to North American and European gas markets. In Egypt, we signed an agreement with Egyptian Natural Gas Holding Company (EGAS) to purchase 1.45 billion cubic metres per year of LNG (see Exploration and Production in this Item on page 37). Agreements were finalized with NGT Transco which will make BP and Sonatrach of Algeria the first companies for several decades to import LNG into the UK market from 2005.

        Plans for the development of new LNG import terminals on the US East and Gulf coasts continued. These new access points to market, together with existing capacity rights at Cove Point in Maryland, US, Bilbao in Spain and Isle of Grain, UK, should provide important opportunities to maximize the value of the Group's gas supplies from Trinidad, Egypt and elsewhere.

        In Southeast China, the construction of the Guangdong LNG Terminal and Trunkline Project (BP 30%) continued on track. First gas is scheduled for mid-2006 under the gas purchase agreement signed with Australia LNG in October 2002 that will involve deliveries from the North West Shelf project (BP 16.7%).