Disposal

RNS Number:3346S
BG GROUP plc
21 November 2003


Media
Information


                                 21 November 2003


BG to sell Phoenix Natural Gas interest to East Surrey Holdings


BG Group today announced that it has signed a Sale and Purchase Agreement with
East Surrey Holdings for the sale of BG's 51% interest in Belfast-based gas
distributor Phoenix Natural Gas for a cash consideration of approximately #120
million.  The transaction is subject to the approval of East Surrey Holdings'
shareholders and admission of the new East Surrey Holdings shares to the London
Stock Exchange list. The sale is expected to be completed in mid December 2003.


East Surrey Holdings, which already own 24.5% of Phoenix Natural Gas, have also
agreed to purchase the 24.5% interest of the other shareholder, Keyspan Energy
Development Corporation.  The completion of both sales will occur
simultaneously, following which East Surrey Holdings will become 100% owner of
Phoenix Natural Gas.


Bill Adamson, BG Vice President and General Manager, UK Downstream, said:


"This transaction meets the objectives of both BG and East Surrey Holdings. BG
is continually reviewing its portfolio of assets with the objective of
maximising shareholder value. This deal realises the value of our investment in
Phoenix, which has taken it through a start-up phase and grown it into a
substantial infrastructure business with an established customer base. The
proceeds of the sale will be used for reinvestment elsewhere in our business.
For their part, East Surrey Holdings have been keen to increase their interest
in Phoenix Natural Gas as part of their UK utility growth strategy.


"In transferring ownership of Phoenix Natural Gas to an experienced UK utility
operator such as East Surrey Holdings, we are leaving behind a solid platform -
both in terms of people and infrastructure. BG will continue to play an active
role in the Northern Ireland energy market through its 100% ownership of Premier
Power and, with Keyspan, its operatorship of Premier Transmission."


Patt Barrett, Chairman of East Surrey Holdings, said:


"The addition of Phoenix Natural Gas is an important development for East Surrey
Holdings. It is a high quality regulated business with an excellent record of
operational and financial performance and customer service. Over the course of
the past two and a half years, since we first became involved with Phoenix, we
have been impressed with all aspects of the business."


 There are matters discussed in this media information that are forward looking
 statements. Such statements are only predictions and actual events or results
 may differ materially. For a discussion of important factors that could cause
   actual results to differ from the forward looking statements, refer to the
            Company's annual report and accounts for the year ended
                                31 December 2002.


Notes to Editors:


Phoenix Natural Gas Limited is developing a natural gas market and distribution
system in the Greater Belfast area pursuant to a licence awarded to it in
September 1996.  Phoenix has so far laid 2,340 kilometres of the distribution
system. Supplies to industrial and commercial customers began in December 1996,
with domestic customers starting to receive natural gas in 1997."


Premier Power Limited, a wholly owned subsidiary of BG Group, operates the
Ballylumford power station near Larne. The recent commissioning of a modern 600
MW combined cycle gas turbine (CCGT) plant will provide higher efficiency and
lower cost gas fuelled electricity generation. In July 2003, a three year cross
border electricity deal was signed to supply the Republic of Ireland with 180 MW
of capacity via the North South Power Interconnector.


Premier Transmission Limited (PTL), which is owned by BG (50%) and Keyspan
(50%), operates the Scotland to Northern Ireland natural gas pipeline (SNIP). In
1996, it was granted a licence for a minimum of 35 years to transport gas to
Northern Ireland, where it supplies the Ballylumford power station and feeds the
Phoenix Natural Gas transmission pipeline that takes gas to Belfast.


BG Group has one of the most significant exploration and production businesses
on the UK Continental Shelf. It operates the Blake field, Armada complex and
some of the Easington Catchment Area fields, as well as being a partner in some
10 other producing fields. BG has four business segments - Exploration &
Production, Liquefied Natural Gas, Transmission & Distribution and Power
Generation. Active in some 20 countries, its core geographical areas are the UK,
Kazakhstan, Egypt, Trinidad and Tobago, South America and India.



Enquiries:


Media                         Chris Carter               [phone]


Investor Relations            Chris Lloyd/Brian
                              McCleery/Helen Parris       [phone]


Out of hours pager:               07693 309543



Website: www.BG-Group.com



PR/10969





                      This information is provided by RNS
            The company news service from the London Stock Exchange

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