9 October 2008

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."

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Notes to Editors:

About NC KMG

JSC National Company KazMunayGas (NC KMG) is a national oil and gas exploration, production, processing and transportation operator representing the Government of Kazakhstan's interests in the country's oil and gas industry. NC KMG is wholly owned by JSC Kazakhstan Holding for Management of State Assets Samruk. 

About BG Group

BG Group plc (LSE: BG.L) is a world leader in natural gas, with a strategy focused on connecting competitively-priced resources to specific, high-value markets. Active in 27 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves.

Contact:

KMG

Information Policy and Public Relations

+7 7172 976305

KMG EP

Public Relations

+7 7172 977600 or +7 7172 977908
Mr Mikhail Dorofeyev
e-mail: pr@kmgep.kz

Investor Relations

+7 7172 97 7971

Ms Asel Kalieva

e-mail: ir@kmgep.kz

Pelham PR

+44 203 178 44 18
Mrs Elena Dobson
e-mail: Elena.dobson@pelhampr.com

BG Group

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+44 (0) 118 929 3508/3110

Out of hours UK media mobile:  

+44 (0) 791 718 5707

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   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 which could cause actual results to differ from the forward looking statements, refer to BG Group's annual report and accounts for the year ended 31 December 2007.  BG Group does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

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